when there is "reconfiguration plus obliteration of the prior apartment's particular
identity" (Matter of [*5]Devlin v New York State
Div. of Hous. & Community Renewal, 309 AD2d at 194), such as, if "two
smaller dwellings were consolidated to form one large apartment" (Matter of 300 W.
49th St. Assoc. v New York State Div. of Hous. & Community Renewal, Off. of
Rent Admin., 212 AD2d at 254). Thus, for example, a first stabilization rent was
permitted where an apartment was converted from a single-floor unit to a duplex (see 446-450 Realty Co., L.P. v
Higbie, 30 Misc 3d 71, 72-73 [App Term, 1st Dept 2010]; see also Matter of Fernandez v
New York State Div. of Hous. & Community Renewal, 3 AD3d 366, 368
[2004]).
In the present case, the Deputy Commissioner determined that the Marrones were not
entitled to charge a first stabilization rent because all they had to do to create the
four-bedroom apartment was to unseal the doorway. However, this conclusion is
irrational in that it ignores both the substance of the first stabilization rent policy and its
rationale. Although no structural construction work was performed by the Marrones to
make the apartment a four-bedroom apartment, the first stabilization rent policy was not
described, in DHCR's own terminology, in terms of the work performed to create a new
unit or the cost incurred by the owner. Rather, in DHCR's terms, the first stabilization
rent policy applies "[w]here an owner significantly changes the perimeter and dimensions
of an existing housing accommodation" (NY St Div of Hous & Community
Renewal Operational Bulletin 95-2 at 4). Indeed, the first stabilization rent policy was
not intended to permit an owner to recoup the cost of improvements, as the Rent