NYC rent control may go to Supreme Court
The landlord is arguing that the city's rent-stabilization laws are unconstitutional. In his building, one tenant is paying about $1,000 a month and another is paying $2,650 for similar apartments.
If you don't live in New York City, this may sound unbelievable: You can live in an apartment for half or less of the market rate, forever, and if you die, you can leave the apartment — with its low rent — to your children.
The rent-stabilization laws that New York City enacted in response to a housing shortage after World War I are facing a new challenge, in a case that may go to the Supreme Court.
James and Jeanne Harmon inherited a five story townhouse in Manhattan's Upper West Side. The building has six one-bedroom apartments, in addition to their unit. Three are rented for market rate. Three, considered "rent-stabilized" are rented for 59% less, according to a case filed by the Harmons in federal court.
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James Harmon is arguing that New York's rent-control laws represent a "taking" and are unconstitutional. He has lost his case in two lower courts, but the U.S. Supreme Court is considering whether to accept his appeal.
"The issue is whether the Constitution allows the government to force someone to take strangers into their home and to subsidize them for the rest of their lives," James Harmon told The New York Daily News.
The tenant who is mentioned most often in the case is an executive recruiter who owns a house in Southampton. She has lived in the building since 1976 and pays about $1,000 a month. The tenant next door pays $2,650 a month, according to a story in The Wall Street Journal.
James Harmon's grandparents bought the home in 1949 and he grew up there. After Harmon and his brother inherited the house in 1994, he took out a $1.5 million mortgage to buy his brother's share, The New York Times reported. James and Jeanne Harmon moved back into the building in 2002.
Rent-control laws are rare in the United States. Only a few cities have such laws, and none on the scale of New York.
New York Attorney General Eric Schneiderman is defending the case, arguing that the rent-stabilization laws are constitutional and that the case does not deserve Supreme Court review. He writes in his brief:
By regulating evictions and the pace of rent increases, the [rent-stabilization law] protects tenants, particularly the elderly and disabled, from dislocation, and limits the disruption to neighborhoods and communities that would result from dramatic changes in rental rates and rapid turnover of tenants year to year.
You can read more about the legal arguments at The Wall Street Journal's Metropolis blog.
The fact that the Supreme Court is considering the case has surprised legal observers.
"I thought this was a well-settled question of law for the better part of the century," Andrew Scherer of Columbia University, an expert on landlord-tenant laws, said to The Wall Street Journal.
What do you think of rent control? Should the Supreme Court take this case?
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PS: Couldn't the Los Angeles County Tax Collector give us a break on property taxes based on how far below fair market rent we're being forced to rent our units for?
While the Liberal cries his crocodile tears over the plight of the elderly and disabled, he proposes even more of this poison that left these people in this situation to start with. What the Liberal (Marxist) in this country really wants is for the state to own and maintain all property a la the Soviet Union--to the same end.
This is one the Republicans should hate but I am quite sure they desperately want the Supreme Court to take. It should be hated by them because of their strong State Rights stand. Keep the Federal Government out of the states. This is one I agree with. Leave it at the state level. However as we all see it is a states right issue unless the state doesn't agree with them and then it becomes a Federal issue.
I do agree that the lease should not be able to be passed on. When the initial tenant leaves that should put the apartment back in the hands of the owner. I understand that was put in place to protect a family should someone pass, however if they are going to leave it in place it should certainly only apply to members of the immediate family. No cousins, aunts, in-laws, grand kids etc.
In this particular case I agree with other posters that have said these people knew they had a rent control building when they purchased. They are correct in stating that the value paid was a direct reflection on the rent controlled apartments. They now want to increase that value of the building by changing the laws. I guess to me it is a sign of greed that they are not grateful to have received such a wonderful inheritance to begin with.
California does grant rent increases but caps the percentage annually. This seems fair to both renters and owners.
You are forgetting about the HDRC who employs 10,000 nyc people and the courts that would be put out of
business if the SCOUS court finds this illegal.
Who besides royalty passes down real estate they don't own to heirs? Don't forget about the people who have businesses devoted to finding these controlled apartments. How many NYC politicians will have to move?
People don't retire to Florida, they "ESCAPE" to Florida. The problem is, they are escaping from their own insanity....and they bring all those dumb-ss ideas down here with them! This place is getting nutty as New York. GO AWAY!
A Yankee lady wrote to the newspaper that we should be "glad" they're here because they bring their money. I'm sorry, but there's NO WAY you have enough money to make me "glad".
Rent stabilization laws are the only reason that the middle class can afford to live in NYC. Take those laws away and you'll be left with the very wealthy and the very poor. The people who are, unjustly, taking advantage of the system are a minority. There are plenty of people who need those laws, and deserve the protection that rent stabilization affords them.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.
msn real estate is social
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