The End of Rent Control?

B y passing drastically tougher rent laws this June, the Legislature may have accidentally doomed rent control altogether. At the least, it’s prompted a federal lawsuit that could raise major constitutional issues.

Individual property owners and two groups, the Community Housing Improvement Program (or CHIP) and the city Rent Stabilization Association (or RSA) filed the case last week in the Eastern District, charging that New York’s law violates both the Due Process and Takings clauses of the US Constitution.

That is, the suit claims 1) there’s no rhyme or reason to who benefits from the rent laws, nor any semblance of a fair process in awarding regulated apartments; 2) the regulatory scheme imposes such burdens as to effectively “take” private property without fair compensation; 3) the law is irrational, since it has actually reduced (over time) the city’s stock of affordable housing.

It will take years, but the case could wind up before the US Supreme Court, which was giving more serious weight to the Takings clause even before President Trump added two right-leaning justices.

The Fifth Amendment bans “uncompensated physical takings of private property.” The suit argues that the regulation under New York’s new law is so sweeping that it amounts to a physical taking.

The June law, for example, forbids a landlord from taking a unit in his own building for his own use. It also limits the size of security deposits; sets new barriers to evicting even law-breaking, rent-withholding tenants — and guarantees that even highincome tenants can’t see their high-end apartments escape the rent-stabilization regime.

How is all this justified by any legitimate government concern? Especially when the state offers no compensation for grossly reducing the value of the owners’ property — and when decades of rent regulation have only worsened the city’s housing crisis.

However the case turns out, it’s telling that few if any legislators who passed this law even thought about these questions.