Compliance guide
Two mechanisms let an owner raise the rent on a regulated apartment beyond the annual guideline: a Major Capital Improvement (MCI) for building-wide work, and an Individual Apartment Improvement (IAI) for work inside a specific unit. Both were sharply limited by HSTPA in 2019. Getting the caps and the lookback right is what separates a lawful uplift from an overcharge.
Rent stabilization caps the annual renewal increase, but it also lets an owner recover certain capital costs through a rent increase that sits on top of the guideline:
Both are governed by NYS DHCR (Fact Sheet #12 covers IAI; Fact Sheet #24 covers MCI), and both were significantly tightened by the 2019 Housing Stability and Tenant Protection Act (HSTPA). The high-level rule: these are cost-recovery mechanisms with hard ceilings and documentation requirements, not open-ended ways to reach market rent.
An IAI lets an owner raise a regulated rent to recover the cost of qualifying improvements made inside a unit. HSTPA capped the total spend that can be counted and put it on a rolling clock.
There is a lifetime IAI ceiling per apartment, measured on a rolling 15-year window. Improvement costs older than 15 years drop out of the running total. The ceiling amount changed:
| Period | IAI cost ceiling | Lookback |
|---|---|---|
| Post-HSTPA, through Oct 16, 2024 | $15,000 per unit | Rolling 15 years |
| On/after Oct 17, 2024 — Tier 1 | $30,000 per unit | Rolling 15 years |
| On/after Oct 17, 2024 — Tier 2* | $50,000 per unit | Rolling 15 years |
*Tier 2 applies in specific qualifying circumstances (for example a long-vacant or long-tenancy unit) under the 2024 amendments. The exact conditions and the divisor used to convert cost into the monthly increase are detailed by DHCR — confirm them for your situation.
The monthly increase is derived from cost — not chosen.
For improvements with an effective date in the window from June 14, 2019 through October 16, 2024, HSTPA made the IAI increase temporary — it is removed after 30 years. For IAI work on or after October 17, 2024, the 2024 amendments treat the increase as permanent. Pre-HSTPA increases generally remain in place.
Urbero enforces the IAI ceiling at the moment an adjustment is recorded: it sums the prior IAI cost in the rolling 15-year window, rejects a new improvement that would push the unit over the cap, and stamps the expiry so the gate stops applying a temporary increase after its 30-year life. The rent gate then folds active adjustments into the maximum allowed rent.
CalculatorIAI / MCI increase calculatorEstimate the permitted monthly increase from an improvement cost, and check it against the rolling IAI ceiling.An MCI recovers the cost of building-wide capital work — a new boiler, roof, elevator, windows, or similar — by spreading it across the building’s units as a monthly increase. HSTPA tightened MCIs as much as it did IAIs:
MCI is a DHCR-approved process, not a self-service uplift.
The 2019 HSTPA is the throughline for both mechanisms. It introduced the IAI lifetime ceiling and 15-year lookback, the temporary (30-year) life for post-2019 IAI increases, the 2% MCI collectibility cap, the longer MCI amortization, and the regulated-share eligibility bar. The 2024 amendments then raised the IAI ceiling and added the tier structure described above.
Don't confuse the rent-controlled MCR factor with a 7.5% cap.
These figures move. The IAI ceiling, the MCI amortization schedule, and the rent-controlled MCR factor are all set by statute or by DHCR and change over time. Anchor on the rules — the lifetime ceiling and lookback for IAI, the 2% collectibility cap and DHCR order requirement for MCI, the lesser-of test for MCR — and verify the current numbers against DHCR before you rely on them.
The qualifying cost counts toward the unit’s rolling 15-year IAI total. If the unit’s prior 15-year IAI spend plus this job would exceed the ceiling, only the remaining headroom counts. The monthly increase is the qualifying cost divided by the applicable amortization factor — keep the receipts.
That’s a candidate MCI, but you can’t simply add it to the rent. File with DHCR; if approved, the per-unit increase is subject to the 2% annual collectibility cap and is removed after 30 years.
Verify it against the DHCR registration and the 15-year window before relying on the legal rent. An IAI that wasn’t properly documented or that breached the ceiling can be the root of an overcharge the new owner inherits.
