The NYC Maximum Base Rent is a formula-driven ceiling that the New York State Division of Housing and Community Renewal sets on rent-controlled apartments in New York City, recalculated every two years based on a building’s real estate taxes, operating costs, and a return on capital value. Roughly 24,000 units still fall under the program, which was created by Local Law 30 of 1970 and codified at NYC Administrative Code § 26-405. The ceiling itself matters less than most tenants think, because a separate annual cap controls how much of any increase actually lands on the monthly bill.
The Two Numbers That Matter: MBR and MCR
The Maximum Base Rent is the theoretical ceiling. The Maximum Collectible Rent is what the tenant actually pays, and it is almost always lower.1New York State Homes and Community Renewal. Fact Sheet 22 – Maximum Base Rent Program
The MBR sets the destination. Strict annual caps on the MCR control how fast the rent can actually get there. In most cases the MCR never catches up, because the MBR keeps moving every two years as the underlying costs are recalculated. For many rent-controlled tenants the gap between the two numbers is permanent.
How Much Rent Can Go Up Each Year
The Housing Stability and Tenant Protection Act of 2019 tightened the annual MCR increase. The rent can rise each year by no more than 7.5 percent, or the average of the previous five years of one-year Rent Guidelines Board adjustments for rent-stabilized apartments, whichever is lower.1New York State Homes and Community Renewal. Fact Sheet 22 – Maximum Base Rent Program The RGB average has consistently come in well below 7.5 percent, so it is the binding figure in practice. For 2026, the MCR increase effective January 1 is capped at 2.55 percent.2New York State Homes and Community Renewal. 2026-27 MBR Binder
If the recalculated MBR for an apartment is lower than the current MCR plus the allowable increase, the lower number applies. The annual cap can never push the rent above the MBR itself.
Two older practices no longer apply. Fuel cost pass-alongs on top of the standard increase were eliminated as of June 14, 2019; any such increase is null and void and cannot be folded into the MBR or MCR for later percentage calculations.3Legal Information Institute. New York Codes Rules and Regulations Title 9 2202.13 – Fuel Cost Adjustments Major Capital Improvement increases for qualifying building-wide work such as a new boiler, roof, or elevator modernization still exist and sit outside the standard annual cap, but they carry their own regulatory limits.1New York State Homes and Community Renewal. Fact Sheet 22 – Maximum Base Rent Program
How DHCR Calculates the MBR Ceiling
The landlord does not pick the number. DHCR computes it using the formula in NYC Administrative Code § 26-405, which adds the building’s real estate taxes, water and sewer charges, an allowance for operating and maintenance expenses, a vacancy allowance capped at two percent, a collection loss allowance, and an 8.5 percent return on capital value.4Legal Information Institute. City of New York v New York State Division of Housing and Community Renewal The operating and maintenance piece covers fuel, utilities, payroll, repairs, replacement reserves, and miscellaneous charges. Mortgage payments are not included.
DHCR divides the building-wide total by the number of apartments to produce a per-unit MBR. The operating and maintenance allowance can vary by building type, construction era, elevator service, and average apartment size. Every two years, the MBR is updated by a Standardized Increase Factor reflecting changes in those underlying costs. For the 2026–27 cycle, that factor is 1.115.2New York State Homes and Community Renewal. 2026-27 MBR Binder
What Landlords Must Do Before Collecting an Increase
DHCR will not approve an MBR increase unless the building clears specific compliance checks. The two main ones are violations and services.
Violation Clearance
The landlord must certify that 100 percent of rent-impairing violations and at least 80 percent of all other violations recorded by the NYC Department of Housing Preservation and Development have been cleared, corrected, or abated. The violations that count are those on record as of January 1 of the year preceding the two-year MBR cycle. For the 2026–27 cycle, that baseline date is January 1, 2025. If the landlord files after June of the relevant year, violations on record six months before filing apply instead.5New York State Homes and Community Renewal. 2024-25 Maximum Base Rent Application
Rent-impairing violations include hazards like lack of heat, lack of hot water, or missing smoke detectors. All of them must be resolved; there is no 80 percent allowance for the serious category.
Service and Expense Certification
The landlord must also certify that essential services such as heat, hot water, and elevator operation are being maintained, and that at least 90 percent of the building’s operation and maintenance expense allowance has been spent or committed.5New York State Homes and Community Renewal. 2024-25 Maximum Base Rent Application A per-unit filing fee covers DHCR’s administrative costs.
Once DHCR confirms compliance, it issues an Order of Eligibility to the landlord and to every rent-controlled tenant in the building. That order authorizes the landlord to calculate the new MBR and MCR for each apartment and to serve the tenant with written notice of the specific dollar increase and effective date. If the landlord does not clear violations or file the required certifications, DHCR issues a denial order blocking any increase for that cycle.5New York State Homes and Community Renewal. 2024-25 Maximum Base Rent Application
How Tenants Can Challenge an Increase
When DHCR issues an Order of Eligibility, tenants can object by filing Form RA-94-MBR. Common grounds include unresolved building violations the landlord failed to disclose, essential services that are not actually being maintained, and expense figures that do not support the proposed increase.6New York State Homes and Community Renewal. Rent Control Landlords use the same form to appeal a denial. DHCR reviews either way.
Tenants who believe their building has serious maintenance problems should document conditions and file HPD complaints before the next MBR cycle opens. Those complaints can generate the official violation records that later block the landlord’s increase application.
Which Apartments the System Covers
MBR applies only to rent-controlled apartments in New York City, not to rent-stabilized units and not to market-rate housing. To fall under rent control, an apartment generally must be in a building constructed before February 1, 1947, and the tenant or a qualifying successor must have been in continuous occupancy since before July 1, 1971.6New York State Homes and Community Renewal. Rent Control Both dates are hard cutoffs. When the current tenant leaves without a qualifying successor, the apartment typically shifts to rent stabilization or market rate and exits the MBR system permanently.
A family member who lived in the apartment as a primary resident for at least two years before the tenant’s death or departure can succeed to the tenancy and remain within the MBR framework; the required period is one year for senior citizens and people with disabilities.7NYC Rent Guidelines Board. Succession Rights FAQs If you are not sure whether your apartment is rent-controlled, rent-stabilized, or unregulated, DHCR can confirm the status on request, and that answer determines whether the MBR rules in this article apply to you at all.