Helen Gibbons, Petitioner, v. 207 LLC (2007)

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 (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 N.Y.2d 206, 551 N.Y.S.2d 871, 551 N.E.2d 72 [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 A.D.2d 334, 707 N.Y.S.2d 194 [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 A.D.2d 132, 134, 626 N.Y.S.2d 758 [1995], lv. denied 86 N.Y.2d 706, 632 N.Y.S.2d 500, 656 N.E.2d 599 [1995] ).   Nor were petitioners' due 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. NYSDHCR, 6 A.D.3d 197, 774 N.Y.S.2d 151 [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 N.Y.2d 775, 686 N.Y.S.2d 356, 709 N.E.2d 97 [1999];  Matter of DeJesus v. Roberts, 296 A.D.2d 307, 310, 746 N.Y.S.2d 1 [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.