Two Queens politicians challenged one of the city real estate industry's most cherished incentives today.

State Sen. Michael Gianaris and Assemblyman Brian Barnwell announced legislation that would stop landlords from raising regulated rents to pay for major capital improvements, such as the replacement of boilers, roofs and windows.

Gianaris and Barnwell said that so-called MCI increases should be discontinued because landlords have abused the system, making questionable upgrades to trigger permanent rent increases and adding to the city's affordability crisis.

"Too many tenants are priced out of their homes because of MCIs, whose only improvement seems to be to the landlord's bottom line," Gianaris, who is the state Senate's No. 2 Democrat, said in a statement.

The proposed legislation, which would need Senate and Assembly approval and Gov. Andrew Cuomo's signature to take effect, not only would cancel the benefit going forward, but also undo MCI-related rent increases going back seven years.

"The major capital improvement program is responsible for hundreds of millions of dollars in rent increases on rent-regulated tenants," Barnwell, who represents Maspeth, said in a joint statement with Gianaris. "It is unacceptable that we maintain a program pushing middle- to low-income New Yorkers out of their homes while allowing landlords to continue to make monstrous profits."

A Gianaris spokesman did not immediately respond to a query about whether the bill proposed another mechanism for landlords to recover the cost of capital improvements to rent-regulated buildings. This past August Gianaris and Barnwell introduced a bill calling for taxpayers to pay those expenses.

The two bills in the Senate and Assembly—which Gianaris' office said are identical—drew sharp rebukes from across the real estate industry, which credits the MCI program with spurring landlords to invest in upgrades after wide swaths of rent-regulated housing in the city fell into disrepair in the 1970s.

"This legislation in no way addresses the affordable-housing crisis or offers a path forward for creating new housing units for New York City residents, who desperately need better access to sustainable, affordable housing," John Banks, president of the Real Estate Board of New York, said in a statement. "Nor does it recognize that, over the past decade, the incremental costs of operating and maintaining a building have increased by more than twice the rate of rent increases allowed."

Banks said MCIs incentivize owners to spend $10 billion a year on improvements, which sustain 104,000 jobs.

The legislation further entrenched Gianaris as an antagonist of the real estate industry. The Queens senator became a key opponent of Amazon's now-canceled plan to locate a second headquarters, slated to have 25,000 to 40,000 employees, in Long Island City—an about-face that drew the ire of many who saw huge opportunity in having one of the world's biggest companies plant its flag in Queens.

"Not content with killing 25,000 jobs, Sen. Gianaris is now attempting to kill thousands more," Jay Martin, executive director of the landlord group Community Housing Improvement Program, said in a statement. "Sen. Gianaris is leading New York in a race to the bottom, and if this proposal passes, every building in New York will look like a NYCHA building."

In New York City Housing Authority buildings, rents are set based on tenants' incomes, rather than operating and maintenance costs. Many of the developments are notoriously in a state of disrepair.

The MCI program was instituted in the late 1960s. Any challenge to its existence seemed unlikely until November, when Democrats seized control of the state Senate, which for almost all of the previous four decades was controlled by Republicans, who defended New York City real estate interests.

One complaint tenant groups have made about the MCI program is that rent increases to pay for upgrades are permanent; they don't end when the landlord has recovered the cost of the project. Higher base rents ultimately can allow a property owner to bring a unit out of regulation entirely if it becomes vacant and the regulated rent is above a certain threshold.

In a statement, Joseph Strasburg, president of the Rent Stabilization Association, said the proposed legislation will discourage and prevent landlords from reinvesting in building wide improvements, affecting the city's economy.

"When landlords don't have the resources to make improvements in their buildings, local contractors lay off neighborhood residents from good-paying jobs; property tax assessments decrease, which means less revenue for city coffers, and apartments and buildings deteriorate."