An individual apartment improvement, or IAI, is a renovation made inside a single rent-regulated apartment that lets an owner raise that unit’s legal regulated rent. Unlike a building-wide major capital improvement, an IAI is confined to one apartment: a new kitchen or bath, appliances, flooring, or a real increase in space or services.
Two things set it apart from an MCI. It needs no prior approval from New York State Homes and Community Renewal (HCR); the owner takes the increase and files an electronic notification, and DHCR reviews the work only if an overcharge complaint or audit arises. And in an occupied unit, the work requires the tenant’s written, informed consent first.
The current rules took effect October 17, 2024, under Part FF of the 2024 state budget, easing the limits HSTPA set in 2019. There are two tiers. Tier 1 lets any owner recover up to $30,000 of eligible work over 15 years, figured at 1/168 of the cost per month in buildings of 35 or fewer units, or 1/180 in larger ones. Tier 2 allows up to $50,000, but only for a unit occupied by the same tenant for at least 25 straight years or registered vacant in 2022, 2023, and 2024, at 1/144 or 1/156. Unlike an MCI, an IAI increase is now permanent, not removed after 30 years. HCR lays out both tiers, the caps, and the amortization in its Operational Bulletin 2024-2.
Renovating a stabilized unit and unsure how much you can recover, or which tier applies? MD Squared calculates the allowable IAI increase, files the DHCR notification, and keeps the itemized costs and proofs of payment that hold up if the rent is challenged. It sits in our Rent Stabilization Consulting service, working alongside the capital project management that runs the renovation. Reach out to our team before the work starts.
