New York Rent Regulation Is Upheld by Appeals Court

“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,” Judge Parker wrote.

Even under the new stricter version of the law, the judge said landlords aren’t compelled to rent their apartments to tenants perpetually and can evict them for failure to pay rent, using the property for illegal purposes, and other lease violations.

New York and other jurisdictions initially enacted rent control more than a century ago in response to housing shortages during World War I. Over those many years, landlords have repeatedly challenged the constitutionality of rent control without success. The plaintiffs in the current case argued that New York had now made its rent laws so strict that it gave them a new opening.

Lawyers for the city and state said the current law didn’t force landlords to rent to below-market tenants in perpetuity. They said it essentially closed loopholes inserted in the early 1990s and wasn’t a significant departure from earlier iterations that the courts upheld.

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Ellen Davidson, a staff attorney at the Legal Aid Society, which represented two tenant groups involved in the case, called the decision “a resounding victory upholding New York State’s rent laws and dismissing these meritless challenges.”.

The lawsuit was filed by a consortium of local landlord groups and individual landlords led by the Community Housing Improvement Program and the Rent Stabilization Association. They argued the stricter regulations amounted to an unconstitutional government taking private property.

The landlord groups said that, under New York’s law, tenants could pass their apartments along to family members, friends, roommates or caregivers after they leave, creating a “line of strangers” to which the landlord can’t refuse to rent the unit except for lease violations and other misconduct.

Legal observers, including the law’s opponents, considered the case a long shot in the lower courts, but the plaintiffs hope they can persuade the Supreme Court to take up the issue.

“We always expected these issues to be decided by the Supreme Court and look forward to moving the case forward. Restrictive rent laws like New York’s produce less, not more, housing,” a spokeswoman for the landlord plaintiffs said.