Landlord Turns to Supreme Power on Rent
Upper West Side landlord James Harmon is tired of his rent stabilized tenants paying well below market rate for the apartments in the five-story West 76th Street brownstone he inherited, so he’s turned to the U.S. Supreme Court to relieve him—and the rest of the state—of rent regulations. Harmon filed a lawsuit against the chair of the Rent Guidelines Board, Jonathan Kimmel, and the commissioner of New York State Homes and Community Renewal, Darryl Towns, alleging that the rent regulations violate his Fifth Amendment right to receive compensation from the state for what he says is the taking of his property. When the court ruled that there was no taking of property, Harmon appealed on the basis of the 14th Amendment, claiming that he had been denied the right to due process. That’s what caught the attention of a law firm in California, Pacific Legal Foundation, which has jumped in in support of Harmon’s case to ask the Supreme Court to hear his appeal.
R.S. Radford, the attorney who filed the amicus brief on behalf of the firm, as well as the conservative policy think tank the Cato Institute and the Small Property Owners of San Francisco Institute, said that Pacific Legal takes on cases that affect the public interest.
“Jim Harmon and his wife own a building in New York City that has some rent controlled units that are occupied, apparently, by fairly affluent tenants, and he simply can’t use the property the way he would like to,” Radford said, explaining his interest in the case.
Harmon, who could not be reached for comment, told the Daily News last week that he wants to be able to pass the building on to his children and grandchildren, and that the rent regulations pose unfair limits on his rights as a property owner.
Radford frames it as a few lucky renters unfairly gaming the system.
“How is society better off because these three folks have a claim to fame in his building? The answer to that should be up to the courts,” Radford said.
But the ramifications of this lawsuit, if it were kicked back to the lower court and eventually came out in Harmon’s favor, would go far beyond one local landlord.
“If this were to happen, we’re talking about more than a million rent regulated apartments in New York that would suddenly cease to be rent protected,” said Sue Susman, president of the Central Park Gardens Tenants’ Association. “I’m guessing that 96 percent would be people who cannot afford to rent elsewhere. The median income for rent stabilized tenants is $36,000.”
Susman said that while that kind of decision is still years away, if it ever comes, she’s already hearing from tenants who are afraid of how the case might affect them.
Other groups have petitioned the court on behalf of Harmon, including the Rent Stabilization Association of New York, a trade association of about 25,000 landlords and building owners that has been arguing for years, in many venues, that New York’s rent regulations place undue burdens on building owners and hurt the housing market.
“After more than 50 years of rent regulations, it’s time for the courts to rule that the rent laws as currently structured are unconstitutional because they have not in any way, shape or form corrected the issues they were intended to address,” said Mitch Posilkin, general counsel at RSA. They argue that the state is doing nothing to actually ameliorate the continual housing emergency, defined as a vacancy rate of less than five percent, and that rent regulation was intended to be temporary.
Posilkin said that RSA advocates for a gradual phase-out of rent regulations, and that other government programs should step in to help those who can’t afford market rate rents.
Radford agreed. “It would be so much simpler and so tremendously less expensive, both directly and in terms on the market as a whole, for the city and the state of New York to issue rent subsidies to people whose income is so low that it’s a hardship,” he said.
The Supreme Court has asked the city to file a response by Jan. 4, 2012, and will then decide whether to hear the case.
Source: The West Side Spirit