|High Court Has Apparent Interest in Challenge to Rent Stabilization
by Samuel Newhouse, published online 12-21-2011
This month, the U.S. Supreme Court ordered that the city file response papers by Jan. 4 to the petition of James Harmon, 68, and his wife, the owners of a five-story brownstone on the Upper West Side in Manhattan.
Having lost his case at both the trial court and the Circuit Court, the city waived its right to file opposition papers to Harmon’s petition to the nation’s high court, presumably confident that the Supreme Court would deny cert and dismiss Harmon’s petition. However, one of the nine justices (it is unknown which) has told the city to file response papers, indicating an apparent interest in the case.
“New York City’s Rent Stabilization Law (RSL) has forced the Harmons to lease apartments permanently to three tenants-in-possession for over 90 tenant years (and their designated successors) without regard to financial need,” Harmon writes in his complaint.
The Rent Stabilization Law of 1969 was originally predicated on a housing emergency “created by war, the aftereffects of war and the aftermath of hostilities,” although that was changed in 1974 to being based on the city’s “vacancy” rate.”
Since 1969, the stated goal has been “the transition from regulation to a normal market of free bargaining between landlord and tenant,” Harmon quotes the legislative documents.
“In all that time, the RSL has not achieved its stated objectives,” Harmon writes.
Harmon’s building has six apartments, three of which are rent-stabilized, and those tenants pay about 59 percent of market rate. The building has been his family’s home for five generations and six decades.
According to the complaint, lower courts told Harmon that the law was against him, that rent stabilization is indefinite and that he can either sell the building or demolish it to get rid of his tenants. The building is in a historic district and cannot legally be demolished.
Harmon has also been in litigation in Housing Court for over two years trying to get one of his rent-stabilized tenants to vacate an apartment so that Harmon’s grandchild can move in.
Half of the city’s 2,092,363 rental units are subject to rent stabilization, and the estimated $4 billion cost is born by market rate tenants, Harmon states, writing that market rate rents would be 15 percent lower without rent stabilization laws.
“Contrary to popular myth, the RSL is not targeted to help the needy, and here it does not. A person could make millions of dollars annually and still qualify for a rent stabilized apartment. The RSL is not about affordable housing. It is all about luck… a racket in which property owners and market rate tenants always lose….and that is a matter of common knowledge,” Harmon writes.
Harmon, an attorney, complains that one of his rent-stabilized tenants even bought a second home on Long Island in 1991.
One person subletting a rent-stabilized apartment at Harmon’s home was featured in a 2000 New York Times article, where they describe the one-bedroom apartment with a spacious terrace renting at $1,190 a month as “practically free.”
Harmon’s immigrant grandparents bought the building in 1949, sold it to Harmon’s parents in 1953 and 16 years later it became subject to rent stabilization. In 1994, Harmon inherited the building when his father died, as well as three tenants in possession of rent-stabilized apartments in the building.
In 2006 and 2009, the City Council reaffirmed rent stabilization laws. Before the 2006 hearing began, City Council Speaker Christine Quinn promised a “fun-filled hearing” intended “to make sure we are not losing rent protected units … [and] renewing intact, with no weakenings, our rent protection laws of the city of New York,” Harmon quotes from City Hall transcripts.