766, 767-768 [App Term, 1st Dept 1995]; see also Matter of 1781 Riverside v New
York State Div. of Hous. & Community Renewal, 287 AD2d 255, 256 [2001];
Matter of Myers v D'Agosta, 202 AD2d 223, 224 [1994]). A first stabilization
rent is disallowed even where renovations result in an increase in dwelling space (see
Matter of 300 W. 49th St. Assoc. v New York State Div. of Hous. & Community
Renewal, Off. of Rent Admin., 212 AD2d at 253 [first stabilization rent properly
disallowed where exterior perimeter of the apartment did not change, although due to the
configuration of the apartment, interior renovations increased the actual square footage
of the space]; Roker Realty Corp. v Gross, 163 Misc 2d at 767-768 [owner not
entitled to a first stabilization rent in light of the addition of a closet from an adjacent
apartment, which increased the size of the subject apartment by 27 square feet]).
As the First Department observed in Matter of 300 W. 49th St. Assoc., the
Rent Stabilization Code accounts for increases in dwelling space, allowing a rent
increase for such an improvement (prior to Sept. 24, 2011), amounting to one-fortieth of
the cost of the improvement (see Rent Stabilization Code [9 NYCRR]
§ 2522.4 [a] [1], [4]; Matter of 300 W. 49th St. Assoc. v New
York State Div. of Hous. & Community Renewal, Off. of Rent Admin., 212
AD2d at 254). In determining whether an owner is entitled to charge a first stabilization
rent, therefore, it is necessary to distinguish between a mere increase in dwelling space
and the creation of a new unit which renders the prior rental history "meaningless"
(Matter of 300 W. 49th St. Assoc. v New York State Div. of Hous. &
Community Renewal, Off. of Rent Admin., 212 AD2d at 253). The latter occurs