MBR Update
by Jenny Laurie

Although it’s that time of year again, the state Division of Housing & Community Renewal has not yet released its proposal for the 2000-01 Maximum Base Rent factor. After several calls to the agency, Met Council could only discover that the new bureau chief for rent control, David Cabrera, is “working on it” and that a hearing is very tentatively scheduled for Jan. 5.

Once every two years, the DHCR proposes an MBR factor using a complex formula, and then must hold a public hearing before the final number is set. The factor is used to determine rent increases for the approximately 50,000 rent-controlled tenants whose owners have applied for permission to increase rents effective January 1, 2000. Under this system, rent-controlled tenants pay a 7.5% increase every year until their Maximum Collectible Rent reaches the MBR, or ceiling rent.

The MBR factor is critically important to thousands of rent-controlled tenants, overwhelmingly seniors on low, fixed incomes, whose MCR is close to the MBR; a low factor means that they don’t get the full 7.5% increase every year. During the last two cycles, 1996-97 and 1998-99, the factors were below 4%, thanks to a reinterpretation of the rent-control formula required by a law passed by the City Council in 1997. That law forced the agency to reduce the factor from over 30% to close to 3%.

Three lawsuits filed by landlords challenging that law are still pending, and have been consolidated in front of State Supreme Court Justice Leland DeGrasse, according to Steve Dobkin, of Collins, Dobkin and Miller, a law firm representing Met Council and tenants in the lawsuits.

“The landlords are hoping for a quick decision declaring the city law in violation of the Urstadt law,” says Dobkin, citing a state law that prohibits the city from enacting rent regulations more stringent than the state’s. “That is unlikely. This lawsuit won’t end soon, and meanwhile the DHCR has agreed to follow the city law which has resulted in the lower MBR factors.”