Landlord Groups File Suit To Challenge Rent Regulation Laws, Following Through On Threat

Two influential landlord groups are making good on their promise to fight the rent regulation laws, filing a lawsuit late Monday night to try and undo them in federal court.

The Rent Stabilization Association and the Community Housing Improvement Program have joined with seven individual landlords to file a lawsuit challenging the laws in U.S. District Court, The Real Deal reports. 

The New York City Rent Guidelines Board, the board’s members and the state Homes and Community Renewal Commissioner RuthAnne Visnauskas are all named as defendants.

The complaint argues that the new laws, signed last month, violate the Fifth and 14th amendments of the U.S. Constitution. Under the Fifth Amendment, the taking of property without “just compensation” is barred, and the 14th protects the right to due process.

In the suit, the complainants argue the reforms prevent property owners exercising their “core rights to exclude others from their property and to possess, use and dispose of their property.”

Further, the plaintiffs claim rules that make it harder to convert rentals into condominiums amount to unlawful taking, per TRD.

“State and City representatives have advanced a variety of claimed justifications for the RSL (rent stabilization law), including that it helps provide affordable housing for persons of limited means, that it is needed to maintain socio-economic and racial diversity in the city, and that it will help abate a ‘housing crisis’ that otherwise exists in New York City,” the lawsuit states, per TRD. “The RSL has applied in New York City continuously for 50 years, and the evidence is overwhelming that the RSL is not rationally related to achieving any of those objectives.”

The laws have received widespread condemnation from the real estate industry, though tenant advocates see them as a win for housing affordability in the city. Last week, the bill's co-sponsor, state Sen. Brian Kavanagh, told Bisnow he thinks a challenge would be unsuccessful.

“I have no reason to think any of what we did is unconstitutional. I think it's safely within the authority of the state legislature and I expect that any judge that looks at this will agree,” he said. “There are three branches of government, and people are entitled to take their point of view to court. I respect the right of people to bring their case before a judge. But I don't believe it's likely to be successful.”

Lawyers have said it could be challenging — although perhaps not altogether impossible — to overturn the laws. Seiden & Schein attorney Alvin Schein said earlier this month the attempts the challenge would not be an “easy road."

"I think that there's hope for parts of the rent law being declared unconstitutional," he said. "I think the co-ops and condo restrictions that were voted in are unconstitutional."