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Supreme Court Rejects Landlords' Challenge to New York Rent Regulations

Posted by Jordan Tapia | Oct 16, 2023 | 0 Comments

In a significant legal development, the United States Supreme Court has declined to hear a case brought by two landlord groups in New York, the Rent Stabilization Association (RSA) and Community Housing Improvement Program (CHIP). These groups represent thousands of owners of rent-stabilized buildings in New York City. The case revolved around the constitutionality of New York's rent stabilization law, which landlords argued violated their rights and hindered their ability to profit from their properties.

The legal challenge stems from 2019 reforms that greatly restricted landlords' ability to increase rents on vacant apartments and remove them from rent regulation. While the landlord groups argued that the law was irrational and damaging to New York's housing market, the Supreme Court's decision not to review the case is seen as a win for tenants and a setback for landlords.

The rent stabilization law in New York is critical for tenants and accounts for approximately half of the city's rentals. The Supreme Court's choice not to take up the case does not completely dismiss concerns from both sides, as two other narrower legal challenges to the law remain pending before the court. However, RSA and CHIP have decided not to join those cases, indicating their reluctance to pursue further legal action.

Tenant advocates remain vigilant and are closely monitoring the developments in the other legal challenges. They view the Supreme Court's decision as a rejection of what they consider a frivolous challenge to rent stabilization as a whole.

While landlords argued that the rent stabilization law infringed on their property rights, recent data from the Rent Guidelines Board suggests that owning rent-stabilized properties remains profitable, despite temporary setbacks during the COVID-19 pandemic.

The average net operating income (NOI) of rent-stabilized landlords experienced losses during the pandemic, but this came after three decades of income increases. Landlords of regulated buildings now earn more than three times what they did in 1990, even after adjusting for inflation.

The 2019 rent law and the pandemic coincided with an increase in vacancies in rent-stabilized apartments, a trend that landlords attribute to their inability to raise rents sufficiently to renovate vacant units. However, data indicates that the 2019 rent laws had little long-term effect on landlords' ability to rent out stabilized apartments, suggesting that these challenges may be more a matter of adapting to changing regulations than a fundamental threat to the profitability of these properties.

The Supreme Court's decision not to hear the case brought by landlord groups in New York is seen as a victory for tenants and upholds the rent stabilization law's constitutionality. This decision has significant implications for New York City's housing market, and it highlights the ongoing debate over property rights and tenants' protections in the city.

Rabiyah, S. And Holliday Smith, R. (2023) Https://Www.Thecity.Nyc/2023/10/02/Supreme-Court-Rent-Regulations/

About the Author

Jordan Tapia

Phone: (212) 566-6780 Email: [email protected] Jordan Tapia, a partner at our law firm, is known as a fierce litigator. She has successfully represented various small businesses facing eviction and has helped many come to an amicable resolution with their landlord, often avoiding litigati...


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