Supreme Court Won’t Hear Rent-Regulation Challenge

The Supreme Court won’t be doing to rent regulations what it did to campaign-finance laws in 2010. On April 20, the Court announced that it would not consider a challenge to New York City’s rent-stabilization law. 

Manhattan landlords James and Jeanne Harmon filed the suit in 2008, claiming that rent regulations were an unconstitutional violation of their property rights. Two lower federal courts rejected it, but at least one Supreme Court justice thought it was worth considering.

If the Court had taken the case and struck down rent stabilization, it would have endangered the homes of one million New York households—almost one-third of the city’s people. It would also have ended the regulations that protect renters in Westchester and Nassau counties; Jersey City, Bayonne, Hoboken, and other cities in New Jersey; Los Angeles, San Francisco, and several smaller California cities; and Washington, DC. 

However, doing that would have required reversing numerous legal precedents. Several previous Supreme Court decisions, the most recent in 1992, have held rent controls constitutional. To overturn them, longtime tenant attorney Tim Collins said in a statement, the Court would have had to return to its pre-New Deal legal philosophy, in which it consistently struck down child-labor and worker-safety laws. Since the late 1930s, numerous Court decisions have set strict standards for judging economic regulations unconstitutional, such as putting an unfair burden on property owners or being “arbitrary, discriminatory, or demonstrably irrelevant.” 

“In the final analysis, extreme conservative aspirations for heavily constitutionalized property rights cannot be reconciled with popular sovereignty,” Collins concluded. “I feel like we just passed one large ominous ship in the night.”

The real-estate lobby used the suit to catalyze a propaganda offensive, propagating the myth that rent control is for Hollywood celebrities who pay $800 for a nine-room apartment on the Upper West Side. Landlords, they claim, are being forced to “subsidize” those affluent tenants, while people in their twenties are forced to pay $2,500 a month or more. 

In reality, according to the federal Housing and Vacancy Survey for 2011, half of rent-stabilized households make less than $37,000 a year, and their median rent is $1,050 a month—more than one-third of their median income. Slightly more than one-fifth of the city’s apartments rent for $800 or less, and most of those are in public or other government-subsidized housing.

Rent controls are not about “subsidizing” tenants, Collins and other supporters point out. They are an emergency measure to prevent landlords from taking advantage of the city’s chronic housing shortage—legally defined as less than 5 percent of apartments vacant and available for rent—to gouge tenants. Since World War II, the city’s vacancy rate has never risen above 5 percent. It was 3.1 percent in 2011.