Major Capital Improvements (MCI) in NYC: What Qualifies, How to Apply, and Tenant Rights
10 min read · Updated 2025-01-15
NYC Major Capital Improvement (MCI) guide: which building improvements qualify, how to apply to DHCR, documentation requirements, tenant objection rights, and post-HSTPA MCI rules.
MCI Applications and Requirements
What qualifies as a Major Capital Improvement (MCI) in NYC?
An MCI is a building-wide improvement to a major system or structural element that benefits all tenants and has a useful life of at least 12 years. Qualifying improvements include: new boiler or heating system, new roof, replacement windows (building-wide), new elevator, rewired electrical system, new plumbing risers, new intercom system, new entry doors, and renovation of common areas (hallways, lobbies). The improvement must be to a major building system — routine repairs and maintenance do not qualify.
How do I apply for an MCI rent increase?
File an MCI application with DHCR using Form RA-79. The application must include: a description of the improvement, copies of all permits, contractor invoices, cancelled checks or other proof of payment, certificates of completion or inspection sign-offs, and a statement of the proposed rent increase calculation. DHCR reviews the application, notifies tenants (who can file objections), and ultimately issues an Order Granting MCI or denying/modifying the application. Processing typically takes 12-24+ months.
How is the MCI rent increase calculated after HSTPA?
Under HSTPA (2019), MCI increases are capped at 2% of the current rent per year. The increase is calculated by dividing the approved MCI cost by the number of rooms in the building and applying a recovery formula (1/168th monthly for buildings with 35 or more units, 1/180th for smaller buildings). The resulting dollar amount is the monthly increase, subject to the 2% cap. The increase is now "temporary" — it expires after 30 years and cannot be permanently rolled into the base rent.
What documentation do I need to support an MCI application?
DHCR requires comprehensive documentation: complete contractor invoices (with description of work, quantities, and unit prices), proof of payment (cancelled checks, bank statements, wire transfer records), building permits and DOB sign-offs, certificates of completion or agency approvals where applicable, and photos of the completed work. Invoices that are vague ("labor and materials") without supporting detail are often disallowed. Keeping precise records from the start of the project makes the MCI application process much smoother.
Can tenants object to an MCI application?
Yes. DHCR notifies all rent-stabilized tenants in the building when an MCI application is filed. Tenants have 45 days to file written objections. Common objections include: the improvement doesn't benefit all tenants, the work was done as a repair rather than a capital improvement, costs are inflated or unsupported, the contractor was unlicensed, the required permits weren't obtained, or the same item was claimed in a prior MCI application. DHCR considers tenant objections and may disallow costs or deny the application.
Can I get an MCI increase for work already done, or must it be planned in advance?
You can file an MCI application for improvements already completed. There is no requirement to pre-approve with DHCR before starting the work. However, you must ensure you obtain all required permits before or during the work (applying after the fact for unpermitted work complicates the MCI). The filing must occur within two years of the completion of the improvement — older work may not qualify.
What is the difference between an MCI and an IAI for rent increase purposes?
An MCI covers building-wide improvements to major systems (roof, boiler, windows building-wide) and is applied for through DHCR to all stabilized units. An IAI (Individual Apartment Improvement) covers improvements to a specific apartment (kitchen, bathroom, appliances) and doesn't require DHCR approval — the landlord self-calculates the increase based on the cost. Both are subject to post-HSTPA caps and temporary expiration. MCIs generally have larger dollar amounts; IAIs are unit-specific.
What happens to the MCI increase when a tenant vacates?
Under post-HSTPA rules, the MCI increase remains embedded in the regulated rent and continues to the incoming tenant (since the increase is tied to the rent, not the tenant). The increase will eventually expire after 30 years under the new rules. Pre-HSTPA MCI increases (approved before 2019) under the old rules are permanent but may be subject to different expiration provisions depending on when they were approved.