Tuesday, July 07, 2009

Rent Reductions in Submetered Buildings

When an owner of a master metered building obtains an order from the PSC waiving the general prohibition of retail resale of electricity, tenants in rent stabilized housing are entitled to a rent reduction when the landlord charges separately for a service (electricity) previously included in rent. Contrary to the myth that only electricity-squandering tenants will pay more when they are submetered, typically the amount of the rent reductions set in the DHCR rent reduction schedule are far exceeded by the new electric bills. See PULP's Top Ten Submetering Myths.

A document submitted by NYSERDA to the PSC in May indicates some rethinking on the topic of submetering:
In some low-income, electrically-heated buildings that are rent stabilized, rent controlled, or regulated by state or local agencies (where owners are required to pay the heat bill), and have separate circuits for heat and other electric needs (such as many Mitchell Lama buildings), two meters may be installed so that the tenant can be responsible for non-heat electric charges, and the owners will still pay for heat. NYSERDA is working with NYS DHCR to update the rent reduction formula, and determine the best implementation plans to accommodate Major Capital Improvement (MCI) issues that impact the potential for submetering projects.
The last time NYSERDA worked with DHCR on rent reduction formulas for submetering it was disastrous for many tenants. See PULP's Analysis of DHCR Rent Reductions for Conversion to Submetering, and PULP Analyzes DHCR Submetering Rent Adjustments.

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