The agreement can work out because it is governed by the NYC Rent Guidelines Board.

A rent stabilized apartment in NYC can be renovated at the landlord's expense if the tenant agrees (in writing) to a rent increase. That increase can be 1/40th or 1/60th of the cost of the renovation per annum depending on how the landlord is depreciating the capital improvement.

So if you wanted a new refrigerator that cost $600.00 you would pay about $1.25 increase per month. If the renovations cost $10,000, you would pay about $21,00 per month.

You should contact the NYC Rent Guidelines Board for more information when you know what the improvements cost and what your landlord is proposing as a rent increase.