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Landlords ask Supreme Court to overturn NYC’s rent stabilization law


(The Center Square) — Landlords are asking the U.S. Supreme Court to overturn New York City’s decades-old rent stabilization law, claiming the restrictions violate the Constitution because they cap prices and limit their ability to evict tenants.

  • By Christian Wade | The Center Square contributor
  • May 23rd. 2023

In a petition to the court, lawyers for the Community Housing Improvement Program and the Rent Stabilization Association call on justices to reverse a U.S. Court of Appeals for the Second Circuit ruling that upheld New York City’s rent stabilization law, affirming the judgment of a lower court.

The plaintiffs, which include several property owners, argue in the petition the rent control law violates the Takings Clause of the Fifth Amendment, which provides that private property shall not “be taken for public use, without just compensation.”

The law “severely restricts (and in several instances completely negates) many of the rights that make up building owners’ property interests — specifically their rights to exclude, occupy, use, change the use of, and dispose of their property,” lawyers for the plaintiffs wrote in the 35-page petition.

The city’s rent stabilization law, first enacted in 1969, restricts annual rent increases for specific apartments, with any increases set annually by a nine-member board appointed by the mayor. It affects roughly one million apartments in the city and has survived dozens of legal challenges over the past several decades.

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A 2019 update to the law beefed up rental eviction protections and eliminated a provision that had allowed landlords to get around rent control limits.

Landlords said the update to the law “supersized” the rent restrictions, shifting even more cost to private property owners and preventing them from evicting problem tenants.

They filed a lawsuit to block the changes, which was rejected by a U.S. District Court judge whose decision was upheld by the Second Circuit’s ruling. In upholding the ruling, the second circuit referenced previous state and federal court rulings striking down challenges to New York City’s rent control law.

“The case law is exceptionally clear that legislatures enjoy broad authority to regulate land use without running afoul of the Fifth Amendment’s bar on physical takings,” the appeals court wrote in its February ruling.

In the petition, the landlord groups say they are outgunned politically by those who support rent control, with the “combined voting power of the tenant-beneficiaries of those million subsidized apartments and the 4.3 million working taxpayers in the city who would otherwise foot the bill for providing affordable housing.”

“Politicians can make tenants and taxpayers alike happy by shifting the cost of providing below-market-rate housing onto a minority of building owners,” they wrote.

It’s still being determined whether the Supreme Court will agree to take up the case and, if so, when a ruling might be issued.

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