Appeals Court Decision Favors New York City Tenants

A federal appeals court sided with New York City tenants in two cases that jeopardized rent stabilization rules enacted in 2019, reports Mike Leonard in Bloomberg Law. “The US Court of Appeals for the Second Circuit upheld amendments to the New York City Rent Stabilization Law, saying they complied with due process and the takings clause of the Fifth Amendment, which requires the government to pay fair market value when it seizes property for a public purpose.”

Judge Barrington D. Parker acknowledged the argument made by many economists that rent control laws are inefficient at achieving their goals, but wrote that “the caselaw is exceptionally clear that legislatures enjoy broad authority to regulate land use.” The judge rejected arguments that a rent control law constitutes a physical or regulatory taking. “He also rejected the due process claims, saying rent stabilization rules—whether wise or not—have a direct link to the concerns lawmakers were seeking to address, such as homelessness, transience, and the displacement of low-income residents, including essential workers.”

The landlord groups involved in the case plan to take it to the Supreme Court, saying through a spokesperson, “We always expected these issues to be decided by the Supreme Court and look forward to moving the case forward.”