Learn NYC property · Rent regulation and tenant protection

MCI and IAI rent increases: Major Capital and Individual Apartment Improvements

How NYC rent-regulated rents rise for improvements: Major Capital Improvements (MCIs) and Individual Apartment Improvements (IAIs), the 2019 and 2024 limits, and how tenants check them.

A rent-stabilized or rent-controlled rent normally rises only by the yearly guideline. Two exceptions let an owner add the cost of improvements: a Major Capital Improvement (MCI), a building-wide system such as a new boiler or new windows, which the State's housing agency must approve before tenants pay anything; and an Individual Apartment Improvement (IAI), new work inside one apartment, such as a new kitchen or bathroom.

Both matter far beyond the single increase. For a tenant, they are the main lawful way a regulated rent rises faster than the guideline. For an owner or a buyer, they decide whether major work on a regulated building pays for itself — and the rules were tightened sharply in 2019 and loosened for apartments in 2024, so the answer depends on when the work was done.

The agency is HCR, New York State Homes and Community Renewal, whose Office of Rent Administration runs rent regulation (its housing division is often called DHCR). Both kinds of increase are added on top of the Rent Guidelines Board's yearly increase.

Major Capital Improvements

An MCI is an improvement to the whole building, not one apartment, that HCR approves as a rent increase for every regulated apartment in it. To qualify, the work must be a new installation, not a repair; depreciable under federal tax rules; essential to keeping the building sound, efficient or functional; for the benefit of all the tenants; and the thing replaced must have outlived its expected life. Cosmetic work never qualifies. Typical MCIs are boilers and burners, windows, roofs, facade restoration and pointing, rewiring, gas and water repiping, elevators, intercoms and building entrance doors.

HCR's useful life schedule sets how long each item must have lasted before its replacement can be an MCI — for example 35 years for a cast-iron boiler, 25 for a steel boiler, 20 for aluminum windows, 25 for rewiring and 30 for copper repiping. An owner who needs to replace something sooner, after a fire for example, must ask HCR for a waiver.

What the 2019 law changed

The Housing Stability and Tenant Protection Act (HSTPA), signed on June 14, 2019, rewrote the MCI rules:

No MCI in a building where 35% or fewer of the apartments are rent-regulated.
No MCI while the building has outstanding hazardous or immediately hazardous violations, a State finding of harassment, or a building-wide rent reduction for lost services in effect.
Only reasonable costs count. HCR publishes a reasonable cost schedule with a ceiling for each kind of work, updated each year; the fifth update, issued January 9, 2026, covers work begun from January 1, 2026. HCR allows the lower of the real cost and the schedule unless it grants a waiver.
The cost is spread over 12 years (144 months) in buildings of 35 or fewer apartments and 12.5 years (150 months) in larger ones.
A tenant's MCI increases may add no more than 2% to the rent in a year; the rest is collected in later years, or added to the legal rent when the apartment is vacated. Before 2019 the cap was 6% or 15%.
MCI increases are temporary: they come off the rent 30 years after they began, together with the guideline increases compounded on them.
HCR must inspect and audit a quarter of the MCI applications it approves each year.

How an MCI is decided

From finished work to an increase on a regulated tenant's rent.

The owner files form RA-79 within two years of finishing the work. HCR sends every regulated tenant a summary of the application — the work, the dates, the claimed costs and the number of rooms — and tenants have 60 days to answer, alone or through a tenants' association. Common objections are that the work is a repair or cosmetic, that it does not serve the whole building, that the item had not reached the end of its useful life, that the work is defective, that costs are not proved, or that the building had hazardous violations. HCR then grants the increase in full, in part or not at all. Either side may appeal within 35 days, but an appeal does not stop the increase being collected.

An approved increase can be charged from the first day of the month after 60 days from the mailing of HCR's order — never before, and never back-dated. HCR works it out per room: the approved cost, less ineligible items, insurance and grants, divided by 144 or 150 months and then by the number of rooms in the building. A tenant pays that amount times the rooms in the apartment. Tenants in the City's rent-freeze programs for older and disabled tenants (SCRIE and DRIE) do not pay it.

How common MCIs are

HCR's Key Metrics for 2025 count 319 MCI applications filed statewide in the State fiscal year 2024–25, against 337 the year before. In 2024–25 HCR closed 96 approved as filed, 166 approved with changes and 64 rejected; the median approved MCI cost $174,459. Most of these buildings are in New York City, but HCR does not break the MCI counts down by county. BlockLot does not hold HCR's MCI records, so this page quotes HCR's numbers rather than counting its own.

Individual Apartment Improvements

An IAI is an improvement the owner makes inside one apartment — a complete kitchen or bathroom renovation, new appliances, new flooring laid on new subflooring, new windows that are not part of a building-wide job, new closets. Painting, plastering and ordinary repairs do not count. Unlike an MCI, an IAI needs no HCR order: the owner files a notice with photos taken before and after the work. In an occupied apartment the owner must first have the tenant's written, informed consent on HCR's form, or no increase is allowed.

The limits changed twice:

Before June 14, 2019, an IAI added 1/40 or 1/60 of the cost to the rent, permanently, with no cap.
From June 14, 2019, the HSTPA allowed $15,000 of IAIs over 15 years, no more than three, at 1/168 or 1/180 of the cost, removed after 30 years.
From October 17, 2024, under the 2024 State budget, the increase is permanent again and there are two tiers:

	Tier 1	Tier 2
Spending allowed	$30,000 in 15 years	$50,000
Which apartments	Any, vacant or occupied	Certain vacant ones
Monthly increase	1/168 or 1/180 of cost	1/144 or 1/156 of cost
Most a month	$178.57 or $166.67	$347.22 or $320.51

The first fraction in each pair is for buildings of 35 or fewer apartments, the second for larger ones. Tier 2 is for vacant rent-stabilized apartments that were registered vacant in 2022, 2023 and 2024 (usable once), or that became vacant after one tenancy of at least 25 years. It needs HCR to certify the apartment first, a licensed professional's statement that the items were worn out, filings before and after the work, and a fee of 1% of the cost. IAIs installed from June 14, 2019 to October 17, 2024 became permanent too, and count toward the new caps.

For both tiers the contractor must be licensed and unconnected to the owner, and hazardous violations in the apartment must be cleared. The IAI must appear in the apartment's next yearly registration; a new tenant sees it in the lease rider and can ask the owner for the paperwork, then complain to HCR if it does not come. Once installed, the item is a required service: if the owner stops maintaining it, HCR can reduce the rent.

Rent-controlled apartments

MCIs apply to rent-controlled apartments too, under the same 2019 limits: spread over 12 or 12.5 years, collected at no more than 2% a year and removed after 30 years. An IAI in a rent-controlled apartment becomes part of its Maximum Base Rent record. The $50,000 tier applies only to vacant rent-stabilized apartments.

A worked example

HCR's report of MCI cases closed in September 2026 lists 991 President Street in Brooklyn, a building of 33 apartments owned by a company. The owner claimed $124,252.40 for a new boiler and burner; HCR allowed $113,252.40 and granted the application in part, at $9.71 a room a month. The building has 35 or fewer apartments, so the cost is spread over 144 months.

So a regulated tenant in a four-room apartment owes $38.84 more a month. If that tenant's rent were $1,500, the 2% cap would let the owner collect $30 a month of it in the first year and the rest later; 30 years after the increase began, it comes off the rent.

By BlockLot Intelligence's count of the City's stabilization fee, 31 of the building's 33 apartments were registered as stabilized for tax year 2026/27 — well over the 35% an MCI needs.

Where you see this in BlockLot

BlockLot does not hold HCR's MCI or IAI records. What a building's page does show is whether the MCI rules can reach it at all: the rent-stabilized units counted from the City's fee, against the building's residential units in the Lot & building card — an MCI needs more than 35% of the apartments regulated — and the open violations that would bar one, in Compliance & distress signals.

The share of apartments that are regulated decides whether an MCI is possible.
All the apartments
The regulated ones: more than 35% for an MCI

Questions people ask

Can my landlord raise my rent for a new boiler or new windows? Only if HCR approves it as an MCI in a written order, the work benefits the whole building, the old item had outlived its useful life, and more than 35% of the building's apartments are regulated. The increase is charged per room and cannot add more than 2% to the rent in a year.

Can I fight an MCI? Yes. HCR mails every regulated tenant a notice of the application, and tenants have 60 days to answer. Defective or cosmetic work, work that does not serve the whole building, unproved costs and hazardous violations are common grounds. Either side may appeal HCR's order within 35 days.

Are MCI increases permanent? No. Since 2019 they come off the rent 30 years after they began.

Does my landlord need my permission for an IAI? Yes, if you live there: the owner needs your written, informed consent on HCR's form, or no increase is allowed. For a vacant apartment the owner files a notice with photos, and the next tenant can ask for the paperwork.

How much can an IAI add to the rent now? Since October 17, 2024, up to $30,000 of work in 15 years, adding 1/168 or 1/180 of the cost a month — at most $178.57 — permanently. Some long-vacant apartments, or apartments after a 25-year tenancy, can take up to $50,000 at a higher rate once HCR certifies them.

How do I find out whether my building has an MCI? Ask HCR for the apartment's rent history online or at a borough rent office, read HCR's monthly reports of closed MCI cases, which list buildings, items, costs and the per-room increase, or ask HCR for the case file.

Rent stabilization in New York City — NYC rent stabilization explained: which buildings, the Rent Guidelines Board's 2026 freeze, leases and renewals, the 2019 HSTPA, deregulation history, and how to check an apartment.
Rent control in New York City, and how it differs from rent stabilization — NYC rent control explained: which apartments are still controlled, the Maximum Base Rent system, the 2.55% increase for 2026, succession, and how it differs from rent stabilization.
Rent stabilization tied to tax benefits: J-51, 421-a and 485-x — Why apartments in newer NYC buildings are rent-stabilized: the rent rules that come with 421-a, 485-x and J-51 tax benefits, the lease notice, and what happens when a benefit ends.
SRO buildings: single room occupancy, rooming houses and hotel tenants — What an SRO (single room occupancy) building is in New York City, how SRO and hotel rooms are rent-stabilized, permanent tenants, the 0% hotel guideline for 2026, and the SRO harassment rule.

Sources

By BlockLot. Reviewed October 9, 2026. Figures by BlockLot Intelligence, computed from public data on October 11, 2026. This page explains the rules in general; it is not legal or tax advice. For a decision about a specific property, check the official source or ask a professional. Spotted a mistake? Tell us.