New York Laws
Article 4 - Limited Dividend Housing Companies
85 - Control of Rentals.

(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.