A federal appeals court Monday upheld New York state’s decades-old regime regulating rents on some 1 million apartments.
The Second U.S. Circuit Court of Appeals unanimously rejected a challenge by landlords to a state law passed in 2019 that made it significantly more difficult for them to free up apartments for market rates or other uses. Judge Barrington D. Parker, writing for a three-judge panel, affirmed a longstanding legal principle that government restrictions on landlords who voluntarily rent their apartments to the public don’t constitute an unlawful intrusion on property rights.
“The case law is exceptionally clear that legislatures enjoy broad authority to regulate land use without running afoul of the Fifth Amendment’s bar on physical takings,” Judge Parker wrote.
Even under the new stricter version of the law, the judge said landlords aren’t compelled to rent their apartments to tenants in perpetuity and can evict them for failure to pay rent, using the property for illegal purposes and other lease violations.
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New York and other jurisdictions initially enacted rent control more than a century ago in response to housing shortages during World War I. Over those many years, landlords have challenged the constitutionality of rent control repeatedly without success. The plaintiffs in the current case argued that New York had now made its rent laws so strict that it gave them a new opening.
Lawyers for the city and state said the current version of the law didn’t force landlords to rent to below-market tenants in perpetuity. They said it largely closed loopholes that were inserted in the early 1990s and wasn’t a significant departure from earlier iterations that were upheld by the courts.
The case was filed by a consortium of local landlord groups and individual landlords led by the Community Housing Improvement Program and the Rent Stabilization Association. They argued the stricter regulations amounted to an unconstitutional government taking of private property.
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The landlord groups said that, under New York’s law, tenants can pass their apartments along to family members, friends, roommates or caregivers after they leave, creating a “line of strangers” to which the landlord can’t refuse to rent the unit except for lease violations and other misconduct.
Legal observers, including the law’s opponents, considered the case a long shot in the lower courts, but the plaintiffs are hoping they can persuade the Supreme Court to take up the issue.
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“We always expected these issues to be decided by the Supreme Court and are confident we will ultimately prevail, and finally compel leaders around the country to create real and fair solutions for our nation’s housing challenges,” a spokeswoman for the landlord plaintiffs said.