NY real estate groups file lawsuit challenging new rent laws, calling them ‘unconstitutional’

July 16, 2019

A group of real estate groups and individual property owners filed a lawsuit Monday, challenging newly passed laws that strengthen rent and tenant protections in New York City. Last month, Democratic officials in Albany passed a landmark package of bills that close loopholes that have allowed landlords to increase rents and deregulate stabilized apartments. The lawsuit, filed by the Rent Stabilization Association (RSA), the Community Housing Improvement Program (CHIP), and seven individual property owners, claims that the laws, as well as the entire rent regulation system, violate the 14th and Fifth Amendments of the U.S. Constitution, as reported by The Real Deal.

The lawsuit was filed in federal court in Brooklyn against New York City, the Rent Guidelines Board, which decides rent increases, and the state’s Homes and Community Renewal agency. The 125-page complaint states that the new rent laws violate the due process clause of the 14th Amendment and the takings clause of the Fifth Amendment.

Rent stabilization law “deprives property owners of their core rights to exclude others from their property,” which, as the complaint alleges, violates the Constitution’s takings clause. The real estate groups do not seek any damages for owners but instead asks the court to have state lawmakers to rewrite the laws.

“The plaintiffs filed suit seeking declaratory and injunctive relief against future enforcement of the rent stabilization scheme, which will not only halt the deprivation of the constitutional rights of property owners, but will result in increased development of rental properties and more affordable units available to rent,” the RSA’s website reads.

The package of legislation, signed into law by Gov. Andrew Cuomo last month, aims to address the high cost of housing in New York, as well as the city’s growing inequality because of living costs. Currently, more than two million New Yorkers live in one of the city’s one million rent-regulated apartments.

Some of the new rules abolish the practice of vacancy deregulation (which allowed landlords to charge market rents once a threshold has been met) and the “vacancy bonus” which permits landlords to raise rents by 20 percent when a unit becomes vacant.

And previous laws that allowed landlords to increase rents on rent-regulated units following renovations to apartments or the entire building have been revised. Other provisions included in the nine-bill package aim to strengthen tenant protections and make it more difficult to evict tenants.

The real estate industry, which lost political clout in Albany when Democrats took control of the state legislature last November, has been staunch opponents of these new laws and had promised to file a lawsuit even ahead of the new laws’ passage.

Judith Goldiner, an attorney of the Civil Law Reform Unit at the Legal Aid Society, told the Daily News that the lawsuit was a “last-ditch effort.”

“While our clients and tenants across the state gained a fairer housing system that fosters stability and thriving community, these landlords seek to take steps backwards and undo the housing justice that New York desperately needed.”

[Via The Real Deal]


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