U.S. Supreme Court Urged to Step in on Blue City’s ‘Draconian’ Rent-Control Laws

The United States Supreme Court is considering a petition to hear a case challenging the rent stabilization law from stakeholders who say the law is an infringement on the rights of property owners.

The Rent Stabilization Association of NYC (RSA) and New York City’s Community Housing Improvement Program (CHIP) are suing the city after first filing a lawsuit in 2019 that challenges the constitutionality of New York’s Rent Stabilization Law (RSL).

The plaintiffs argue that the RSL has had a “detrimental effect on owners and tenants alike and has been stifling New York City’s housing market for more than half a century.”

“New York’s Rent Stabilization Law is the nation’s most stringent rental housing regulation governing one million New York City apartments,” said the lawsuit.

The lawsuit argues that once a tenant’s lease is up, the law prevents owners from occupying their property and changing its use or leaving it vacant. Instead, tenants are listed as the “successors” of the property, and unless they do something illegal, tenants are entitled to lease their renewals in perpetuity.

The case was dismissed by the Eastern District of New York’s U.S. District Court and again by the U.S. Court of Appeals for the Second Circuit in late 2020. However, plaintiffs now hope that the Supreme Court will hear their case.

“The breadth and depth of amicus support from across the business, real estate, and think tank community underscores the validity and urgency of our Supreme Court petition,” said a joint statement from CHIP and RSA.

“We believe the Supreme Court will find that the arguments laid out in our certiorari petition, and supported by these amicus filings, are clear and convincing: New York’s draconian rent control law is unconstitutional and must be invalidated. Only then can we pave the way for new, effective rental housing laws,” said the groups.

Amicus briefs have been filed by plaintiffs from the U.S. Chamber of Commerce, small property owners, real estate associations, and significant think tanks like the Cato Institute, Manhattan Institute, and Institute for Justice.

“People have the right to control their property. New York’s law took key property rights away from property owners — for example, by allowing tenants to occupy units indefinitely and barring owners from reclaiming their units for personal use,” said senior counsel for the U.S. Chamber Litigation Center’s Tyler Badgley. “The Supreme Court should grant review to protect property owners from this unconstitutional overreach.”

Plaintiffs are not seeking damages or compensation, but relief against future enforcement

Plaintiffs in the case are not seeking monetary compensation or damages but instead are asking for injunctive or declaratory relief against the future enforcement of rent stabilization.

Relief would not only compel the government to focus on policy solutions to address unaffordable housing, like providing housing assistance to those who actually need the plaintiffs but would also protect the constitutional rights of property owners, say the plaintiffs.

CHIP is an association of around 4,000 managers and owners of over 400,000 rent-stabilized rental properties across all five boroughs in New York City.

The RSA is the most prominent trade association in New York City, representing 25,000 agents and property owners responsible for approximately one million housing units.

The Supreme Court has not yet decided whether or not to take up the case but could as early as the fall.