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Apartments buildings on the New York skyline. Credit: Vitali Ogorodnikov Apartments buildings on the New York skyline. Credit: Vitali Ogorodnikov
Yesterday the New York Times reported that the Rent Stabilization Association, a landlord group with over 25,000 members, and the Community Housing Improvement Program, a trade association of roughly 4,000 building owners, have filed a lawsuit in Brooklyn federal court arguing that rent regulations go against the Constitution’s Fifth and 14th Amendments by violating the due process and taking clauses, and equate to governmental taking of private property without just compensation.

 

The lawsuit comes on the heels of the recent rent law package signed by Governor Cuomo in June, officially known as the Housing Stability and Tenant Protection Act of 2019, which strengthens existing rent control and rent stabilization laws. At the time of the Act’s passage, the New York Times quoted Adriene Holder, a lawyer at the Legal Aid Society, praising the legislation as one that would “reverse decades of rampant landlord abuse and enact much-needed protections for hundreds of thousands of tenants.” In contrast, Joseph Strasburg, the president of the Rent Stabilization Association, cautioned that New York City “will see a slow erosion in the quality of housing going out in three or four years.”

New York, protest, City Hall, rent control, rent stabilization, apartments, Introduction 1423A, Vitali Ogorodnikov Rent law reform rally at City Hall on June 27th. Credit: Vitali Ogorodnikov
On June 27th, CityRealty covered the City Hall hearing that addressed five legislative propositions (“Introductions”), while a hundreds-strong crowd of realtors and their supporters braved the summer heat at the plaza outside, in vehement opposition to Introduction 1423A, which limits broker fees charged to renters to one month’s rent when the broker was hired by the landlord. The opposition argued that the proposal constitutes governmental overreach that would put undue hardship on the market and realtors alike, with expenses that would ultimately pass back down to the tenants.

 

Yesterday’s lawsuit takes broader aim at rent control laws, which reverberate to the foundations of our political system. However, it echoes a similar underlying theme, partaking in the debate over the fundamental role of the government, which ought to seek a proper balance between personal rights and societal protections.

 

A notable opposition attempt took place in 2012, when the Supreme Court declined to hear a rent control suit by James D. Harmon Jr. and Jeanne Harmon, owners of a five-story Upper West Side brownstone, which alleged that regulations that force acceptance of below-market rents represented an unconstitutional taking of their property. A judiciary panel concluded that the city’s regulations “did not constitute permanent physical occupation of the Harmons’ property,” citing owner options of demolition (as long as they did not replace it with housing), apartment reclamation for their own use, and eviction of “an unsatisfactory tenant.” In turn, Mr. Harmon countered that “the Constitution does not allow the government to force us to take strangers into our home at our expense for life.”

 

In the current case, the plaintiffs have full confidence that the case will reach the Supreme Court. The New York Times quotes Jay Martin, the executive director of the Community Housing Improvement Program, who states that “it’s time for the law itself to have its day in court,” citing the need for a “real discussion about whether or not this is the best system to provide affordable housing in New York.”

New York tallies among the nation’s six states and districts where some localities institute rent control, with California, Maryland, New Jersey, Oregon, and Washington DC rounding off the list; besides New York, Oregon featuring statewide regulations. The suit claims that New York’s decades-old rent stabilization laws, enacted to provide affordable housing and ease the city’s housing crisis, have been unconstitutional from the beginning, and calls them “arbitrary, irrational, and a burden on the rights of property owners.”

 

 

Furthermore, the suit claims that the legislation worsens the housing crisis, in part because of the absence of income caps for rent-regulated tenants, which unfairly benefits wealthy It says that rent regulations exacerbate the city’s housing shortage and that, because there are no restrictions on the incomes of rent-regulated tenants, the system allows wealthy New Yorkers to benefit unfairly.

 

The lawsuit opens the next chapter in a saga that persisted on the New York State political landscape for centuries in some form or another, predating even the rent control laws at hand. Today, the debate is more pressing than ever, as it affects 2.4 million residents in around a million apartments. In the meantime, the ongoing political battle stays hotter than the city’s sweltering July heat.

New York, protest, City Hall, rent control, rent stabilization, apartments, Introduction 1423A,Vitali Ogorodnikov Rent law reform rally at City Hall on June 27th. Credit: Vitali Ogorodnikov
Content & Research Manager Vitali Ogorodnikov