9 NYCRR § 2521.1 — Initial legal regulated rents for housing accommodations (Rent Stabilization Code, via Cornell LII)

(2)
Where an owner substantially increases the outer dimension of a vacant housing
accommodation, such initial rent shall be the prior rent of such housing
accommodation, increased by a percentage that is equal to the percentage
increase in the dwelling space and such other increases authorized by this
Title including any applicable guideline increase and individual apartment
improvement increase that could be authorized for the unit prior to the
alteration of the outer dimensions.

(3) Notwithstanding the above, the above
increases may be denied based on the occurrence of such vacancy due to
harassment, fraud, or other acts of evasion which may require that such rent be
set in accordance with Part 2526 of this Title.

(4) Where the vacant housing accommodations
are combined, modified, divided or the dimension of such housing accommodation
otherwise altered and these changes are being made pursuant to a preservation
regulatory agreement with a federal, state or local governmental agency or
instrumentality, the legal regulated rents charged thereafter shall be based on
an initial rent set by such agency or instrumentality.

(5) Where an owner substantially decreases
the outer dimensions of a vacant housing accommodation, such initial rent shall
be the prior rent of such housing accommodation, decreased by the same
percentage the square footage of the original apartment was decreased by and
such other increases authorized by this Title including any applicable
guideline increase and individual apartment improvement increases that could be
authorized for the apartment prior to the alteration of the outer
dimensions.

(6) Apartment
combinations and individual apartment improvements: