New York landlords have asked the Supreme Court to hear a challenge to the state’s rent-stabilization law.
The move comes after the Second Circuit ruled in February against the plaintiffs, which include the Community Housing Improvement Program and the Rent Stabilization Association. They contend in the filing that while providing affordable housing is a laudable goal that can be properly pursued through subsidies and tax abatements, the city and state take an approach that is, in their view, unconstitutional.
The rent-stabilization law governs a million apartments in New York City, imposing all of its costs on property owners with pre-1974 buildings of six or more units and subjecting them to regulations that strictly limit maximum rents. The law also restricts owners from occupying the apartments themselves or otherwise removing the properties from the rental market.
The claim of the petitioners rests upon the Takings Clause of the Fifth Amendment, which reads: “Nor shall private property be taken for public use, without just compensation.” The Fourteenth Amendment makes that provision apply to the states.
The case was first brought before the Eastern District of New York and then appealed to the Second Circuit, both of which ruled against the plaintiffs.
“The [Rent Stabilization Law] ‘regulates land use rather than effecting a physical occupation,’” wrote the judges of the Second Circuit. “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.”
A spokesperson for the two landlord groups explained to Gothamist that the plaintiffs always expected this issue would be decided by the Supreme Court and are confident they will prevail.
The plaintiffs hope the high court will have a different view given their recent decision in Cedar Point Nursery v. Hassid. That case involved a California regulation that required agricultural employers to allow union organizers onto their property for up to three hours per day, 120 days per year in order to solicit support for unionization. “California’s access regulation appropriates a right to invade the growers’ property and therefore constitutes a per se physical taking,” wrote the six conservative justices.
For the plaintiffs, this case is even more clear-cut. The New York law requires that a landlord “allow the tenant to remain, and to renew the tenant’s lease, notwithstanding the owner’s desire to exercise her right to exclude.”
There are a series of restrictions that apply to the owner after the contract is up. The owner cannot simply take possession of his property for personal use. The owner also may not refuse to renew in order to demolish the building unless he or she finds the tenant an equivalent apartment regulated by the rent-stabilization law and pays the tenant’s moving costs. There are other restrictions, such as to converting the space from residential to commercial or even keeping the space vacant.
“This Court should grant review to reaffirm the Takings Clause’s limits on the power of government to force a select group of property owners to bear the economic burden of a public good,” read the petition.