The Court opined that the Legislature as well as the Judiciary have repeatedly
concluded that the purpose of the rent regulatory laws and codes that allow MCIs to
become part of the permanent base rent is to provide an incentive to owners of residential
property to improve and upgrade their buildings. See, e.g., Assembly Debates,
infra, at 293-94; Ansonia I, infra; Park Knoll Tenants' Ass'n v. DHCR, infra ("if
landlords were limited to recoupment of actual costs, there would be no incentive for
such improvements"). "Accordingly, the conclusion urged by the Appellants, and
unanimously rejected by the First Department, that permanent increases in the base rent
for MCIs violate the public policy underlying the RSL, rests on a fundamentally flawed,
one-sided view of the RSL. The Rent Stabilization Law that Mayor Lindsay proposed
was born of the need to balance the protection of tenants with the need to encourage
private investment in residential housing. As Mayor Lindsay stated then: "[t]he City is
faced then with an extraordinarily critical and delicate problem. We must prevent unfair
and excessive rent increases, which landlords are in a position to impose because of the
scarcity of housing; but we must not hastily impose rigid controls in the private sector, or
no builder will ever construct private housing in New York City again. If that happened,
new construction would be at a standstill, the construction trades would suffer, and the
City would be faced with a permanent housing shortage". See Ansonia
Residents' Ass'n v. DHCR, No. 17947/85 (Sup. Ct. NY Co. Jan. 18, 1987),
aff'd, 144 AD2d 1040 (1st Dep't), aff'd, 75 NY2d 206 (1989)
("Ansonia I"); Ansonia Residents' Ass'n v. DHCR, 141 Misc 2d 224
(Sup. Ct. NY Co. 1988), rev'd sub nom. Ansonia Assocs. v. DHCR, 157 AD2d