administratively created policy implemented by DHCR in its capacity as the
administrative agency which regulates residential rents" (Matter of 300 W. 49th St.
Assoc. v New York State Div. of Hous. & Community Renewal, Off. of Rent
Admin., 212 AD2d at 253). "The policy applies only when the perimeter walls of the
apartment have been substantially moved and changed and where the previous apartment,
essentially, ceases to exist, thereby rendering its rental history meaningless" (id.).
Contrary to the opinion of our colleague, under the circumstances of this case, there is a
rational basis in the record to conclude that the Marrones did not construct a new
apartment unit by simply unsealing a doorway that led to two additional bedrooms
(see Roker Realty Corp. v Gross, 163 Misc 2d at 768).
As the Deputy Commissioner concluded, Rent Stabilization Code (9 NYCRR)
§ 2522.4 (a) (1) is the statutory remedy pursuant to which the Marrones
were entitled to increase the rent for adding square footage to the apartment. However,
rental adjustments for a "substantial increase . . . of dwelling space" (Rent
Stabilization Code [9 NYCRR] § 2522.4 [a] [1]) are to be calculated
pursuant to Rent Stabilization Code (9 NYCRR) § 2522.4 (a) (4). In
determining that the Marrones were entitled to a rental increase of $204.01 per month
pursuant to Rent Stabilization Code (9 NYCRR) § 2522.4 (a) (1), the
Deputy Commissioner deviated from the statutory calculations set forth in Rent
Stabilization Code (9 NYCRR) § 2522.4 (a) (4). Accordingly, the
determination to recalculate the legal regulated rent to be $1,200 per month, by including
a rental increase of $204.01 per month, was arbitrary and capricious and did not have a
rational basis in the record (see