The End of Rent Control?
In a case that promises to utterly upend New York politics — and boost the city’s housing market — the Supreme Court may soon strike down the essence of the rent-control laws. Local politicians love nothing more than to gesture on behalf of cheaper housing, as in the drive for a law that would make rent control statewide.
This case could end the never-ending game, by gutting the core rent law. In the process, it would rapidly end New York’s eternal housing “crisis.”
In May, New York landlord groups asked the court to hear their challenge to the state Rent Stabilization Law, which lets the city cap rent hikes and gives tenants a virtually ironclad right to renew their leases.
It’s led to some people renting the same unit for decades — and then passing it to a family member, caretaker or friend. In many cases, building “owners” never regain control over those units, even if they want them for their own families.
And that, the suit contends, amounts to an unconstitutional “taking” of property, in violation of the Fifth Amendment.
For years, few would’ve imagined the law — which dates to 1969 — could be overturned, even though it forces landlords alone to eat the cost for a public good (affordable housing). Lower federal courts dismissed the suit after it was filed in 2019.
Yet the Supremes lately have stood up for property rights, backing owners with 6-3 votes in several key cases. In 2021, by 6-3 they struck down a decades-old California rule that forced farms to let union organizers on their land, ruling that private owners have a right to exclude people from their property.
That, argue the New York plaintiffs, is a far less intrusive “taking” than New York telling a landlord she must offer lease-renewal at a city-dictated rent. The Rent Stabilization Law, they argue, “has been stifling New York City’s housing market for more than half a century.”
Right: The lucky tenants with great deals on their units, even those well-off enough to afford to pay full rent, hang on to them forever, keeping them off the market for truly needy families. Landlords, meanwhile, don’t make upgrades or sometimes even needed repairs because the rent caps keep them from recouping their expenses. Tens of thousands of units go vacant because landlords can’t earn back enough to bring the units up to code.
The Supremes will decide as soon as Sept. 26 whether to hear the case. Progressive legal pundits pooh-pooh the idea of the justices striking down the law, but this high court already reversed Roe v. Wade, and six of its members are firm defenders of property rights (which those same “experts” barely deign to acknowledge).
If the court doesn’t act, the city housing market is still headed for disaster: Roughly one landlord in five, losing money now, may start walking away from their buildings.
If the justices do stick to their principles, it’ll be a lightning bolt for local politics and the few who really win under the rent laws, but open the door to a housing market that work for landlords and the vast majority of renters. Keep your fingers crossed.