MCI (Major Capital Improvements – Rent Increases)
As with J-51, many improvements performed on or at residential buildings are costly but contribute to a building’s ability to retain tenants and, consequently, help a building owner to maximize his profits. Building owners who fail to maintain their buildings lose tenants and, inevitably, wind up having to make large-scale improvements and face stiff fines and/or penalties from the Department of Buildings and/or the Environmental Control Board.
There is, then, no dispute as to whether it pays to maintain one’s property. However, with the MCI Program, as administered by the Division of Housing and Community Renewal, a building owner can not only maintain a building and his tenant base, but he can also legally increase rents over a period of time under the MCI Program.
There are some issues that have been recently exposed in the past several months in connection with the Stuyvesant Town Case in connection with simultaneous MCI and J-51 benefits.
While we recommend applying for MCI benefits as a matter of course in connection with eligible residential improvements, we also suggest you contact us prior to proceeding so you are aware of the value and the potential ramifications of simultaneous J-51/MCI benefits.