Federal Judge Rejects Challenge to Rent Laws; Landlords Will Appeal

A federal judge Sept. 30 dismissed a lawsuit by two landlord organizations who claimed that the stronger rent laws enacted last year violated owners’ constitutional property rights.
In a 40-page ruling, Judge Eric Komitee of Eastern District Court in Brooklyn rejected the Community Housing Improvement Program and the Rent Stabilization Association’s arguments against the Housing Stability and Tenant Protection Act’s limits on rent increases and deregulation. The two groups contended that the law violated the Fifth Amendment’s prohibition on taking private property without “just compensation,” because it could lower their property values or return on investment.
“No precedent binding on this Court has ever found any provision of a rent-stabilization statute to violate the Constitution,” Judge Komitee wrote. “Rent regulations have now been the subject of almost a hundred years of case law…. That case law supports a broad conception of government power to regulate rents, including in ways that may diminish — even significantly — the value of landlords’ property.”
The landlord groups also claimed that the city’s Rent Stabilization Law was not “rationally related” to its stated purposes of increasing the supply of affordable housing and helping low-income residents, arguing that rent regulations have worsened the city’s housing crisis. The city government has a valid interest in preventing “uprooting long-time city residents from their communities,” Komitee responded.
“This decision is a big victory for New York tenants and a clear message to landlords that their arguments challenging the constitutionality of New York’s rent stabilization laws have no basis,” Edward Josephson, director of litigation at Legal Services NYC, which represented several tenant groups opposing the suit, said in a statement. “The courts have long upheld the legitimacy of New York’s rent laws which were put in place to protect New York City families from being pushed out of their apartments by unscrupulous landlords looking to make a quick buck.”
A spokesperson for CHIP and RSA told The Real Deal that the two groups planned to appeal.