Harding v Calogero

Harding v Calogero 2007 NY Slip Op 08769 [45 AD3d 363] November 13, 2007 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected through Wednesday, January 16, 2008

William Harding et al., Appellants, et al., Petitioner,
v
Judith Calogero, as Commissioner of the New York State Division of Housing and Community Renewal, Respondent, and 207 Realty Associates, LLC, Intervenor-Respondent.

—[*1] The Legal Aid Society, New York City (Steven Banks of counsel), and Proskauer Rose LLP, New York (Conor Malinowski of counsel), for appellants.

Gary R. Connor, New York City (Sandra A. Joseph of counsel), for Division of Housing and Community Renewal, respondent.

Belkin Burden Wenig & Goldman, LLP, New York City (Magda L. Cruz of counsel), for 207 Realty Associates, LLC, respondent.

Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered May 10, 2006, which denied the tenants' petition seeking to annul the determination of respondent agency (Division of Housing and Community Renewal [DHCR]) granting intervenor landlord's application for a rent increase based on unique or peculiar circumstances, unanimously affirmed, without costs.

The agency determination to increase petitioners' maximum rents (see 9 NYCRR 2202.3 [a] [1]; 2202.7) had a rational basis (see Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206 [1989]). DHCR's methodology for computing comparable regulated rents in the area was neither arbitrary nor capricious. That the calculation could have been performed differently is of no moment, as DHCR has broad discretion in setting rents to effectuate the laws governing rent regulation (Matter of Santo v New York State Div. of Hous. & Community Renewal, 272 AD2d 334 [2000]). The comparable rents proposed by petitioners were not accompanied by documentary substantiation to show how they were calculated, nor did they state whether the rents submitted included subsidies they had received; furthermore, the comparable apartments submitted were substantially smaller than the subject apartments and provided too small a sample (see Matter of Parcel 242 Realty v New York State Div. of Hous. & Community Renewal, 215 AD2d 132, 134 [1995], lv denied 86 NY2d 706 [1995]). Nor were petitioners' due [*2]process or other rights denied when DHCR conducted the calculation based on its own records without providing petitioners advance notice of the methodology it used (see Matter of Goldman v New York State Div. of Hous. & Community Renewal, 6 AD3d 197 [2004]). While the methodology used has been affirmed in other cases, this does not establish that DHCR has created an inflexible rule removing that agency's discretion, and so DHCR was not obliged to follow the rule-making procedures set forth in the State Administrative Procedure Act (see Matter of Alca Indus. v Delaney, 92 NY2d 775 [1999]; Matter of DeJesus v Roberts, 296 AD2d 307, 310 [2002]). DHCR did retain discretion to accept intervenors' comparability study or the owner's study, or to apply any other reasonable methodology. It also expressly considered the hardship on intervenor-tenants (9 NYCRR 2202.3 [a] [1]) in phasing the increased rents in over four years.

We have examined petitioners' remaining arguments and find them unavailing. Concur—Saxe, J.P., Friedman, Sweeny, McGuire and Malone, JJ.