Landlords Ask Supreme Court To Rule Rent Stabilization Unconstitutional

New York landlords have officially taken their challenge of the state’s 2019 rent reform laws to the Supreme Court just a few months after a federal appeals court upheld the regulations.

The Rent Stabilization Association, the Community Housing Improvement Program and some individual landlords filed their petition to the nation's highest court on Monday, The Real Deal reports. In the appeal, they are asking the nine justices to secure a “fundamental limitation against undue burden on select property owners." 

Specifically, the groups are arguing the state’s Housing Stability & Tenant Protection Act of 2019 — and rent stabilization itself — contravenes the Fifth Amendment, which forbids undue taking of property by the government, and the 14th Amendment’s due process clause.

“A victory in our lawsuit does not remove rent control,” CHIP’s Jay Martin told Gothamist in February. “We’re not challenging the precedent of the government to set rent regulations. We’re saying this specific system does not properly compensate (landlords).”

The 2nd U.S Circuit Court of Appeals that month rejected two landlord cases, saying the Supreme Court had already upheld rent stabilization laws. The landlords had been prepared to lose their case at the 2nd Circuit, per TRD, pinning hopes on the Supreme Court’s conservative majority. Last year, the court struck down the federal right to abortion and New York’s gun laws. 

The suit claims that the 2nd Circuit erred in its decision not to apply a 2021 ruling to rent stabilization. That case, Cedar Point Nursery v. Hassid, concluded a law in California that required employers to allow union organizers onto property for as many as three hours a day was unconstitutional. The lower court, however, decided the takings clause was not applicable in the same way when it comes to landlords and their tenants.

The landlord groups claims rent stabilization and the rent reforms “confers a much more extensive right to physically invade” because they law guarantees lease renewals and regulates owner’s abilities to take back a stabilized unit, per TRD.

The Supreme Court only agrees to hear as many as 150 of the 7,000 cases presented to it annually for review. Judith Goldiner, the attorney-in-charge of the Legal Aid Society's Civil Law Reform Unit, said it is unlikely this case would be selected.

“We would be very surprised if the Supreme Court chose to take this case, because the law is very well settled,” Goldiner told Bisnow Tuesday morning. “That rent regulation is a necessary use of the state's police power, and it's something that's well within the constitutional power of the state to enact.”