Landlord groups filed a federal lawsuit nearly four years ago challenging New York’s new rent laws and expected to lose at every level — until the last.
The groups took their fight to the highest court in the land on Monday as losses in anticipation of lower courts passed.
The Rent Stabilization Association, the Community Housing Improvement Program and some individual landlords have filed a petition asking the U.S. Supreme Court to consider their challenge to New York’s rent stabilization law.
The groups first filed the lawsuit in July 2019, alleging that a state law that regulates nearly 1 million apartment rentals in New York City violates the Fifth Amendment’s expropriation clause and the Fourteenth Amendment’s due process clause.
The complaint challenges not only the Housing Stabilization and Tenant Protection Act of 2019, but also the very concept of rent stabilization, alleging that the law deprives landlords of the right to use their property while failing to address New York’s shortage of affordable housing .
So far, courts have not agreed. Most recently, the Second Circuit affirmed that the Eastern District of New York dismissed their case, as well as a similar suit brought by mom-and-pop shop owners Dino, Dimos and Vasiliki Panagoulias.
In their petition, the groups ask the court to affirm “fundamental restrictions on undue burdens on specific landlords” — that landlords are forced to provide “public assistance” to tenants through lower rents, lease renewals and inheritance rights.
The petition alleges that the city’s rent steering committee takes into account tenants’ ability to pay rent when setting annual rent increases, leading to “an ever-widening gap between landlord costs and stated rents.”
This month, the board proposed increases of 2% to 5% for one-year leases and 4% to 7% for two-year leases, rates criticized by tenants and landlords for diametrically opposed reasons. Changes to rent laws in 2019 cut off other ways for landlords to raise rents for regulated apartments.
The petition calls on the court to “clarify the framework that applies when laws place the onus of rectifying social problems on a select minority of property owners.”
“Easily demonized landlords” are “overwhelmed by the joint vote” of tenant beneficiaries and taxpayers who would otherwise pay to provide affordable housing, the petition said. “Politicians can keep tenants and taxpayers happy by passing the cost of providing below-market-rate housing on to a small number of homeowners.”
Landlords are blaming their case on a 2021 High Court ruling.exist Cedar Point Nursery v. Hassidpitch conservative majority California law requires employers to allow union organizers to stay on their property for up to three hours a day, which is considered unconstitutional. Second Circuit Rejects Landlord’s Comparison to New York Rent Law.
Landlord groups argue that rent laws “empower broader trespass rights” because stable tenants are guaranteed lease renewals and landlords have extremely limited ability to repossess apartments. Under the law, owners can repossess a unit if they plan to use it as a primary residence and can prove “imminent and compelling.”
The petition argues that the Second Circuit took the “erroneous view” that the expropriation clause applies differently in the “landlord-tenant context.”
The petition also warns that other cities may follow New York’s lead and “implement stricter regulations to expropriate private property.” It points to laws in San Francisco and Los Angeles that limit when property owners can repossess apartments.
The RSA and CHIP acknowledged early on that the chances of their challenge rest with the state’s highest court, though there’s no guarantee the case will be heard. In fact, the Supreme Court has previously declined to hear rent control cases, reviewing only about 100 to 150 of the more than 7,000 petitions it receives each year.
The story is developing. Check for updates.
