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Morning Spew

Rent Regulation Is Constitutional (For Now)

And more news you can use this Tuesday.

(Wikimedia / Howard Chandler Christy)

On Monday, a federal appeals court upheld New York's rent stabilization laws, striking down the argument that rent regulations represent a seizure of private property. But lest you think this is all good news—the decision now possibly paves the way for landlord groups to take their various complaints to the Supreme Court. 

The decision is the latest development in a series of legal battles launched just months after the Housing Stability and Tenant Protection Act, a sweeping set of rent protections, was signed into law in 2019, protections that represented a sort of apocalypse for landlords and their allies. Since the passage of HSTPA, five lawsuits have been filed challenging its provisions that, among other things, make the conversion of rent-stabilized units to market-rate housing more difficult and make it harder for property owners to evict tenants. The laws also set caps on how much of a building landlords are permitted to use personally and set further limits on how much rent for a stabilized unit can be raised.

Since the moment HSTPA passed, landlord-activists and lobbying groups including the Rent Stabilization Association and the Community Housing Improvement Program have hoped to eventually bring one of their cases against the state to a conservative Supreme Court: "We are confident we will ultimately prevail, and finally compel leaders around the country to create real and fair solutions for our nation’s housing shortage," a spokesperson for the plaintiffs said on Monday.

At issue in the lawsuits was the Constitution's takings clause, which states that "nor shall private property be taken for public use, without just compensation"— essentially, the landlord groups argue, New York's tenant protections represent a hostile takeover of private property by the public and the state. The "limitations on property rights" imposed by government, wrote the plaintiffs in a brief, "is far more invasive than many of the government-authorized intrusions held to constitute physical takings."

The idea that rent regulation is comparable to the violent seizure of property did not go over well with the Second Circuit judges, who noted that buying property and renting it to tenants is an investment that may or may not generate returns. "For decades New York landlords have taken a calculated risk when they voluntarily entered the state's regulated rental market. In such circumstances, the fact that this risk then results in a loss does not constitute a taking," they wrote.

In other words: Being a landlord is a job or an investment scheme, not an inalienable right. 

And more constitutional links for your Tuesday: 

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