A Major Capital Improvement rent increase in NYC is a temporary rent hike that landlords of rent-stabilized and rent-controlled apartments can collect after completing a qualifying building-wide upgrade, such as a new boiler, roof, or elevator. The Division of Housing and Community Renewal reviews each application and sets the dollar amount. Collection is capped at 2% of your current rent per year, and since 2019 the increase must come off your legal rent after 30 years.1New York State Homes and Community Renewal. Apartment (IAI) and Building (MCI) Improvements
What Work Actually Qualifies
An MCI has to improve the whole building, not a single apartment or a ground-floor storefront, and it must benefit all rent-regulated tenants. Typical qualifying projects are a full boiler replacement, a roof overhaul, building-wide window replacement, or an elevator upgrade.1New York State Homes and Community Renewal. Apartment (IAI) and Building (MCI) Improvements
Routine maintenance does not count. Patching a roof section or fixing a boiler valve is a repair the landlord already owes you. A full replacement that restores or upgrades a building-wide system is what DHCR looks for.
The equipment being replaced also has to have reached the end of its useful life under a schedule DHCR publishes. A cast iron boiler has a useful life of 35 years; a package or steel boiler, 25 years; burners, 20 years. Roofs vary by type: 20 years for 5-ply asphalt, 15 years for 3-4 ply asphalt, 10 years for 2-ply asphalt or single-ply modified bitumen, and 20 years for shingle, single-ply rubber, or quarry tile.2New York State Homes and Community Renewal. Fact Sheet 33 – Useful Life Schedule for Major Capital Improvements If the old equipment hasn’t reached that age, DHCR will deny the application unless the owner gets a waiver for extraordinary circumstances.
How Much the Increase Can Add to Your Rent
DHCR takes the approved project cost and spreads it across the building using an amortization formula tied to building size. Buildings with 35 or fewer units amortize over 12 years. Buildings with more than 35 units amortize over 12.5 years.3New York State Homes and Community Renewal. Fact Sheet 26 – Guide to Rent Increases for Rent Stabilized Apartments
Then comes the cap. No matter how large the approved increase is, your landlord can only collect up to 2% of your current rent per year. Anything above that 2% carries over and phases in during later years.3New York State Homes and Community Renewal. Fact Sheet 26 – Guide to Rent Increases for Rent Stabilized Apartments So a large approved increase on a modest rent is phased in over several years rather than hitting all at once.
DHCR also won’t rubber-stamp whatever the owner spent. The agency applies a reasonable cost schedule to cap the recoverable amount for each type of work. Costs above that ceiling don’t get passed on to tenants.4Cornell Law School Legal Information Institute. NY Comp Codes R and Regs Tit 9 2522.11 – Schedule
The 30-Year Sunset
MCI increases are no longer permanent. Under the Housing Stability and Tenant Protection Act of 2019, every MCI increase must be removed from the legal regulated rent 30 years after it took effect.1New York State Homes and Community Renewal. Apartment (IAI) and Building (MCI) Improvements The 30-year clock runs from the effective date on the DHCR order, which is why keeping a copy of that order matters.
How to Object to an MCI Application
Once your landlord files, DHCR sends a summary of the application to every rent-regulated tenant in the building. You then have 30 days to submit written objections.1New York State Homes and Community Renewal. Apartment (IAI) and Building (MCI) Improvements Individual tenants and tenant associations can both file objections.
Specific, documented problems carry more weight than general complaints. Some of the strongest grounds:
- Open building violations, especially Class C immediately hazardous ones such as lead paint or inadequate fire safety. DHCR can block the increase until those are corrected.
- Unfinished work or defective installation.
- An improvement that doesn’t actually serve all rent-regulated units in the building.
- Evidence the equipment being replaced hadn’t reached its useful life.
After reviewing both sides, DHCR issues a final order setting the exact monthly increase and the effective date for each unit. If you disagree with the order, you can file a Petition for Administrative Review within 35 days of the order’s issuance. That deadline has no extensions.5New York State Homes and Community Renewal. Appealing an Order
If You’re a Senior or Have a Disability
Two city programs can freeze your out-of-pocket rent so an MCI increase doesn’t reach you. The Senior Citizen Rent Increase Exemption (SCRIE) covers tenants 62 and older. The Disability Rent Increase Exemption (DRIE) covers tenants 18 and older who receive federal disability benefits such as SSI, SSDI, or a VA disability pension. Both programs require household income of $50,000 or less, and your rent must be more than one-third of your monthly income.6NYC.gov. Qualifications
If you’re enrolled in SCRIE or DRIE before the MCI increase takes effect, your out-of-pocket rent stays the same; the city reimburses the owner through a property tax credit. The programs only protect you from increases that take effect after your enrollment date, so if you think you qualify and your building has work underway, apply now rather than waiting for the DHCR order to land.