Supreme Court May Hear Case on Rent Control in NYC

In recent days, both the Bloomberg administration and Schneiderman submitted opposition briefs to the high court outlining their support of the city’s Rent Stabilization Law, which covers an estimated two million renters.

In a nutshell, why rent control? Per the recent WSJ blog, “Legal War Over NYC Rent Regulations”, Schneiderman put it as follows:


“New York City faces a notorious shortage of affordable rental housing and a volatile housing market for many reasons — including a highly desirable location, exceptional population density, high construction costs, and limited space due to natural geographic boundaries By regulating evictions and the pace of rent increases, the RSL protects tenants, particularly the elderly and disabled, from dislocation, and limits the disruption to neighborhoods and communities that would result from dramatic changes in rental rates and rapid turnover of tenants year to year.”

The Harmons’ position against rent control focuses on a number of factors, including the Fifth Amendment, due process, and economics.

First of all, the Harmons own, and rent, a brownstone on the Upper West Side of the city. The city’s rent control laws, in essence, force them to charge less than the going market rate, and continually renew their tenants’ leases. The Harmons say this is in violation of the Fifth Amendment, which states the government is not allowed to take private property for public use without just compensation. But, the city and state disagree, citing the case of Yee v. City of Escondido. Per Schneiderman’s brief:

“In Yee, this Court recognized a simple proposition that forecloses petitioners’ claim: owners who make their property available for rental cannot then claim that the presence of tenants constitutes an uninvited permanent physical invasion.”

The Harmons fired back, saying mobile homeowners in San Diego and landlords in NYC have absolutely nothing in common. That case spoke explicitly to the “unusual economic relationship between [mobile home] park owners and mobile home owners” and the “unique protection from…eviction” given mobile home owners, per the blog.

The Harmons are also hanging their hats on due process – the legal requirement that the state must respect all of the legal rights owed to a person. They put forth the argument that the rent control laws were established ninety years ago, and that was in response to a catastrophic emergency, and as such, it can be temporary, not permanent.
Not so, says Schneiderman. That precedent was tossed out twelve years later in the case of Nebbia v. New York. The outcome? The government was permitted to regulate the price of milk if it could reasonably demonstrate a public benefit.

But, the Harmons ask, where is the public good in rent control? Their tenants in essence, receive nearly a 60% discount, and get lifetime tenure. Their parting shot? They say the city’s rent control laws are a “racket in which property owners and market rate tenants always lose.”

Quite frankly, the Harmons’ arguments are stacking up as more and more credible – they appear to have due process and the Fifth Amendment on their side. Schneiderman is seemingly grasping at straws, citing mobile homes and milk in support of the law.

The fate of rent control as New Yorkers know it could rest with the justices of the Supreme Court.