Supreme Court to decide whether to hear rent law challenge

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Sep 25, 2023 View in browser   By Janaki Chadha Beat Memo The U.S Supreme Court could rule as early as this week whether to hear a case that could have major implication on tenant-protection laws in New York. | Samuel Corum/Getty Images More than four years ago, after lawmakers in Albany approved sweeping tenant-friendly changes to the state’s rent laws, landlord groups took the issue to court — challenging not just the reforms but the entire rent-regulation regime. The strategy all along has been to reach the Supreme Court. Now, the nation’s highest court, with its conservative majority, will decide as early as Tuesday whether to hear the case. The lawsuit, filed in July 2019 by the Rent Stabilization Association, the Community Housing Improvement Program and individual landlords, alleged New York’s reformed rent law amounted to an illegal taking of private property. An appeals court wasn’t convinced in a ruling this past February — in which it agreed with a federal district judge’s earlier decision to dismiss the case. A three-judge panel cited “the state’s longstanding authority to regulate” the relationship between landlords and tenants, and said the case law is “exceptionally clear that legislatures enjoy broad authority to regulate land use.” The plaintiffs have framed those losses as expected, and they have argued that legal developments in recent years bolster their case and underscore the need for the issue to be revisited. “In addition to property owners, we have national organizations representing the whole rental housing ecosystem, builders, owners, realtors, mortgage bankers and others explaining how there really is a tidal wave of onerous rental housing regulation across the nation either being enacted or being considered and really underlining the need for guidance from the Supreme Court,” Andrew Pincus, lead counsel for the plaintiffs, said at an event with the conservative Federalist Society in August. Tenant advocates have held that rent-regulation is settled law. “This is the type of frivolous challenge that only organizations with a lot of money to waste would move forward in,” Ellen Davidson, an attorney at the Legal Aid Society, said after a lower court dismissed the case in 2020. The highest court ruling in favor of the plaintiffs would have massive implications for rent restrictions in New York and elsewhere. Pincus noted in August it’s “pretty unlikely that there will not be a substitute law enacted in New York” in that scenario, but said he hopes such a decision would “explain to the New York Legislature that there are lines beyond which they cannot cross.” Welcome to POLITICO New York Real Estate and Infrastructure. Please send tips, ideas, releases and corrections to jchadha@politico.com. Driving the Week New York City Mayor Eric Adams delivers an address on the future of housing in the city at the Manhattan Community College's Tribeca Performing Arts Center on Thursday, Sept. 21, 2023. | Michael Appleton/Mayoral Photography Office ADAMS PLAN AIMS TO SPUR ‘GOLDEN AGE OF HOUSING’ — POLITICO’s Janaki Chadha: Mayor Eric Adams unveiled ambitious plans Thursday to boost housing production across the city by revamping outdated zoning rules with the goal of making way for as many as 100,000 additional homes over 15 years. The plan, which will need approval from the City Council, seeks to take a citywide approach to New York’s worsening housing woes — with affordable apartments increasingly scarce and rents hitting new records every month. Key policy changes the administration is pursuing include offering a new density bonus for affordable housing, eliminating parking mandates that are currently attached to new homes, facilitating office-to-residential conversions and making it easier to build studio apartments. PENN STATION EXPANSION COULD COST $17B — New York Post’s Nolan Hicks: “The MTA’s controversial plan to demolish a block of Midtown to expand Penn Station has grown even larger and $4 billion more expensive — with a price tag that could now approach $17 billion, records show. “Newly revised schematics reviewed by The Post call for a terminal that would be far larger than the massive $11 billion one just dug under Manhattan’s Grand Central Terminal for the new Long Island Rail Road station — a project that ran so late and over budget it became a poster child for mismanagement.” RENT-STABILIZED TENANTS OWE MORE THAN $1B — Crain’s Eddie Small: “Rent-stabilized tenants remain more than $1 billion behind on rent payments more than three years after the arrival of the pandemic, according to a recent survey from the Community Housing Improvement Program, a landlord advocacy group. “CHIP conducted its survey on Sept. 19 and 20 and received responses from owners and operators of about 78,000 rent-stabilized units whose tenants owed about $98 million in rent. The organization calculated its estimates for citywide rent-stabilized arrears based on this sample size.” TIP ME: You can always send tips, ideas, releases, promotions, criticisms and corrections to jchadha@politico.com. SHARE ME: Like this newsletter? Please tell a friend to sign up. Just give them this link. Odds and Ends The Lower Manhattan Development Corp. is facing the end of its existence. | Don Pollard/Office of Gov. Kathy Hochul DEVELOPMENT AGENCY TO SHUT DOWN — The Real Deal’s Kathryn Brenzel: “For two decades, critics have called for the Lower Manhattan Development Corporation to be shut down. At one point, the organization’s leaders even announced they were closing up shop. ‘The LMDC had a mission and we’re nearing the end of the mission,’ then-chair Kevin Rampe told the New York Times. That was in 2006. “The agency, formed in the wake of 9/11 to rebuild the area, forged on even as Mayor Michael Bloomberg campaigned to dismantle it….But now, following an agreement to build 1,200 apartments at 5 World Trade Center, the LMDC is winding down. For real, this time.” TRANSIT UNION RIPS CONGESTION PRICING — New York Post’s Matthew Sedacca: “The head of the Transportation Workers Union excoriated MTA boss Janno Lieber as treating the city’s congestion-pricing scheme as a “thinly veiled” cash cow for the agency. “TWU International President John Samuelsen, a member of the Traffic Mobility Review Board assigned to set congestion pricing fees and exemptions, bashed the MTA chairman as being ‘laser-focused’ on revenue generation — rather than improving air quality or reducing traffic.” TOP AGENTS NAMED IN DISCRIMINATION SUIT — The Real Deal’s Harrison Connery: “Douglas Elliman and some of the biggest names in New York City residential real estate are at the center of a lawsuit claiming they violated discrimination statutes in the Fair Housing Act. “The list of defendants in the suit filed last month in federal court reads as a who’s who of New York City luxury agents, who allegedly either failed to respond to Shaniqua Newkirk when she sent emails requesting help finding Section 8 housing, or failed to provide adequate help.” Quick Links — Tax delinquencies have risen considerably since the city stopped controversial tax lien sales. — A new autonomous robot will patrol one of the city’s busiest subway stations. — The 50 largest office leases in the city during the first six months of 2023 totaled more than 5.7 millions square feet of space.   Follow us on Twitter Janaki Chadha @janakichadha   Follow us

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