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Landlords against new rent laws

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Landlords against new rent laws

Postby Bktenant » Thu Nov 07, 2019 12:05 am

I have read about landlord groups bring up a case to supreme court over the new rent laws passed. What can happen if they are successful in their suit
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Re: Landlords against new rent laws

Postby TenantNet » Thu Nov 07, 2019 2:21 am

I wrote about this for a smaller group, but I don't recall if I posted it here... I assume you're talking about the case brought in Federal Court by the RSA and CHIP. Here's our view (from July):

As we predicted, landlords have filed a claim in federal court challenging the new rent laws. We saw this coming, but that wasn't a hard call, and we certainly weren't the only ones.

As we reported earlier, tenants could have prevented this by agreeing to the 3-year annual survey and the occasional rent law renewal. Perhaps it was the hubris of people like Mike McKee, sell-out groups like Met Council on Housing and the fake Upstate Downstate Alliance that led to this situation. In our view, they could have also fought for the repeal of the Urstadt Law, long a demand by tenant advocates. Instead they abandoned the prime goal and came up with a foolish thing called Universal Rent Control (still, no one knows what that really means), and they concocted a fake rationale that repeal of Urstadt would limit upstate tenants' ability to get rent protections. No one buys that.

In addition to the Urstadt repeal, they did absolutely nothing about cleaning up DHCR, the state regulatory agency whose actions are perhaps more insidious than anything cooked-up by the landlord lobby.

And they made sure that upstate legislators will continue to receive huge amounts of campaign donations from downstate landlords.

This suit is all about a claim that the new rent laws are an unconstitutional taking of landlords' property without due process or compensation. For years, New York got around that by the declaration of a housing emergency (i.e., a vacancy rate of less than 5%) and periodic renewal of the rent laws. Now that the laws are permanent, the landlord's claims might have some merit in the eyes of the courts.

Note that this claim was filed in the Eastern District of NY (Long Island) and not the Southern District (NYC) because landlords have a habit of losing in the SDNY.

The real problem here is that recent cases allow challenges to local laws to proceed in federal court and bypass state courts. And of course the current make-up of SCOTUS doesn't give tenants much hope.

Attached is the court filing. Have fun reading.
RSA v. NYC Complaint.pdf


Landlords take rent-control fight to federal court
RYAN DEFFENBAUGH
CRAINSNY, July 16, 2019

Landlord groups will argue in federal court that the state's rent-control lawsviolate their constitutional rights, following through on a promise to challenge New York's recent reform measures.

A lawsuit filed Monday night in federal court says the rent laws approved last month by state lawmakers violate the Fifth and Fourteenth Amendment rights of New York property owners. Specifically, the lawsuit says the expanded rent-control laws violate the Fifth Amendment Takings Clause, which states that private property cannot “be taken for public use, without just compensation."

The Community Housing Improvement Program and Rent Stabilization Association, along with seven landlords, filed the lawsuit in U.S. District Court for the Eastern District of New York. The city, its Rent Guidelines Board and the state commissioner of Homes and Community Renewal are named as defendants. The 125-page complaint was first reported by The Real Deal.

The suit also argues the state’s Rent Stabilization Laws violate due process rights by depriving rent-controlled landlords of property “without any rational relationship between that deprivation and a legitimate government interest.”

Rather than maintaining diversity in the city and responding to a city-declared housing crisis, the landlord representatives argue, the laws exacerbate a housing shortage. The laws also make market-rate apartments more expensive and deter property owners from making improvements, the lawsuit says
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Re: Landlords against new rent laws

Postby TenantNet » Thu Nov 07, 2019 2:31 am

And here's another one:

By making the rent laws permanent (no expiration every 3-6 years), McKee and other sell-out groups have invited this challenge by landlords and developers. Until now, the rent laws have been based on the existence of a "housing emergency." That's why every three years NYC has to conduct the triennial Housing and Vacancy Survey based on federal census data. If the vacancy rate goes above 5%, then the rent laws go away. The city-wide vacancy rate has never gone above 5%. The most recent survey (2017) sets the vacancy rate at 3.63%.

Note: going above 5% vacancy rate could be an unintended consequence of all the so-called fake affordable housing being championed by neoliberal politicians like fake tenant advocates Harvey Epstein and Jumaane Williams, but there are so many more. These are the jokers that build luxury housing for new people coming into the city (not those that live here) and what they call affordable housing is usually around $3,000 per month.

So seriously ,there could be a disaster waiting with too much housing.)

That the rent laws have been based on a "temporary" emergency for all these years, that helped defeat any number of federal court challenges by landlords claiming that the rent laws are an unconstitutional taking of private property. The new rent laws seems to have taken that safety margin away.

Recently, in Knick v. Township of Scott, Pennsylvania, (also see https://www.eenews.net/stories/1060640699), the Supreme Court changed the landscape of state-based litigation. Previously, challenges had to work their way through the state and local courts before filing federal challenges. Now, with the Knick case, plaintiffs (read landlords) can file directly in federal court with their takings claims. From the article below, it seems that is what they intend to do.

Add to that the new make-up of the U.S. Supreme Court, and you've got a real problem.

Perhaps instead of courting disaster, they should have gone for the repeal of the Urstadt Law, long-championed (and now ignored) by tenant attorney Kenny Schaeffer, they might have had the same thing. With local control of the rent laws, renewal of the rent laws without significant weakening would always be more of a sure thing.


https://nypost.com/2019/06/24/landlord- ... -rent-law/
Landlord groups planning lawsuit over new NY rent law
By Steve Cuozzo
June 24, 2019 | 10:27pm

The landlords are revolting.

Two powerful landlord groups are hammering out a new lawsuit that they hope will overturn rent rules signed by Gov. Cuomo last week that make it much harder for owners to raise apartment rents.

The Rent Stabilization Association and the Community Housing Improvement Program have tapped law firm Mayer Brown to file their case in a New York federal court by mid-July, sources told The Post.

It’s unclear whether Cuomo will be named as a defendant, but the case will argue that his new rent law violates owners’ constitutional right against the “unlawful taking of property,” sources said.

Last week, Cuomo sent landlords into a tizzy when he put his signature to a sweeping package of tenant-friendly bills crafted by the Democratic-controlled state Legislature. His refusal to veto it infuriated property moguls including Bill Rudin, Douglas Durst and Richard LeFrak.

The new rules, which mark the biggest overhaul of Empire State rent laws in a generation, affect landlords who oversee about 1.3 million rent-controlled and rent-stabilized apartments.

Among the measures, it rolls back previous rules allowing landlords to bump rents up to 20 percent every time a regulated apartment is turned over.

Developers and landlords are apoplectic over the rent law, saying it will discourage development of new apartments and make it impossible for landlords to pay for maintenance and improvements. They also say the rules will make existing, market-rate units even pricier because no one will ever leave now-permanently stabilized ones.

The head of the Real Estate Board of New York lobbying organization, John Banks, called the legislation a “disaster for New York City.” However, sources said REBNY will sit out the court battle as it prefers to work behind the scenes to soften the law’s impact.

The RSA represents 25,000 city landlords and brokers for 1 million apartments. CHIP reps the owners of 4,000 apartment buildings. Their legal team is expected to be led by Andrew Pincus, an appellate specialist who has filed numerous challenges to government regulations and argued 29 cases before the US Supreme Court.

The Fifth Amendment’s “taking” clause curbs the government’s right to seize private property for its own gain. It also figures prominently in cases arguing hardship caused by various kinds of legislation.

Sources noted that the US Supreme Court on Friday reversed a precedent that made it difficult to file suits in federal courts over state laws violating the Constitution’s “taking” clause.
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