85. Control of rentals. 1. The commissioner shall fix the maximum rental per room to be charged the tenants of the dwellings furnished by a housing company, the average of such rentals for the dwellings in any project not to exceed the maximum average rental prescribed by law, except as provided in section eighty-seven. Such maximum average rental rate shall be determined upon the basis of the actual final cost of the project containing such rooms so as to secure, together with all other income of the housing company, a sufficient income to meet all necessary payments to be made by said housing company, as hereinafter prescribed, and such room rental rates shall be subject to revision by the commissioner from time to time. The payments to be made by a housing company shall be
(a) All fixed charges, and all operating and maintenance charges and expenses which shall include a charge to be fixed by the commissioner to reimburse him in whole or in part for the expenses of inspection, supervision and auditing, taxes, assessments, insurance, amortization charges in amounts approved by the commissioner to amortize the mortgage indebtedness in whole or in part, improvements and additions to the projects to the extent and in the amount approved by the commissioner; depreciation charges if, when and to the extent deemed necessary by the commissioner; reserves, sinking funds and expenses essential to operation and management of the project in amounts approved by the commissioner.
(b) A distribution not exceeding the maximum fixed by this article upon the capital of the housing company allotted to the project by the commissioner, and interest on income debentures.
(c) Where feasible in the discretion of the commissioner a sinking fund in an amount to be fixed by the commissioner for the gradual retirement of the capital, and income debentures of the housing company to the extent permitted by this article. When tenants own shares or income debentures in a housing company, a sinking fund may with the approval and subject to the regulations of the commissioner be set up and maintained out of the net profits applicable to surplus and used subject to the regulations of the commissioner for the purchase at not to exceed par and accrued interest of the shares and income debentures held by tenants ceasing to be occupants of the buildings; shares so purchased may be resold by the housing companies. The moneys payable by the project to reimburse the commissioner for the expenses of inspection, supervision and auditing as herein provided shall be paid to the executive department. Letting, subletting or assignment of leases of apartments in such buildings or structures at greater rentals than prescribed by the order of the commissioner are prohibited and all such leases shall be void for all purposes.
2. For the purpose of calculating rentals in such dwellings, alcoves, dining bays, and similar accommodations where their existence is legally permissible, and bathrooms in the case of apartments of three rooms or less, may, in the discretion of the commissioner, be counted as half rooms; bathrooms in apartments of four rooms or more shall not be counted as rooms or half rooms.
3. In projects where the land is leased from a municipality the value of the land shall be taken at a sum fixed by the board, body or officer designated by the local legislative body and approved by the commissioner. For all the purposes of this article (including the provisions of section eighty-one) the determination of the actual or estimated cost of projects involving leased lands shall be made on the basis provided in section eighty-three and other sections of this article in the case of projects involving land purchased in fee by a housing company, except that in projects involving leased land the value of the land leased, ascertained in the manner described above, shall be used instead of the cost of the land in determining the total cost of the land and improvements comprising the project. In projects involving leased land, the rental, if any, during the period of construction may be included as part of the cost of the project. The sections of this article requiring the investment of at least one-fifth of the cost of the projects capital and income debentures shall not apply to projects involving leased land but in such projects the value of the land, ascertained in the manner described above, plus the amount obtained by the investment in the capital and income debentures of the housing company shall be at least one-fifth of the cost of the project, and the amounts, if any, to be raised by mortgage indebtedness shall not exceed four-fifths of such cost.
Last modified: February 3, 2019