Supreme Court Won’t Hear Challenge to New York Rent Control Regulations

 

Posted Apr 23, 2012 9:12 AM CDT
By Debra Cassens Weiss

 

The U.S. Supreme Court has refused to hear a challenge to New York’s rent control regulations.

A plaintiff in the Fifth Amendment case was James Harmon, a former prosecutor who runs a corporate investigations firm. The high court denied cert today, SCOTUSblog reports.

Harmon inherited his New York brownstone in the 1990s. One of his tenants who pays $1,000 in monthly rent also owns a home near the shore in Southampton.

 

Source: ABA Journal.

The Supreme Court Denies Certiorari in Challenge to NYC’s Rent-Control Law

 

Posted by Trevor Burrus

Today, the Supreme Court declined to review Harmon v. Kimmel, a case challenging New York City’s rent control law. For a case that merely had the possibility of getting to the high court,Harmon has received a surprising amount of attention. A lot of this attention is due to the persistence of Mr. Harmon, who has admirably been fighting this important battle on behalf of thousands of similarly situated landlords who are forced to subsidize cheap rents, often for tenants who can easily afford to pay the market price. According to the Wall Street Journal, one of the Harmons’ rent-controlled tenants even “owns a second home near the shore in Southampton, where she spends weekends gardening and playing tennis.”

As I said in January in a Reason.tv video, rent control is something that nearly every economist can agree on: it lowers the amount of housing, it lowers the quality of housing, it raises the total costs of finding and securing housing, and it doesn’t even guarantee that those who need cheaper housing will get it. Nevertheless, it seems as if rent control will remain as much a part ofNew York City’s culture as Broadway theatre and pizza.

In addition to the ill-effects of rent control on a housing market, perhaps the most pernicious aspect is that it allows lawmakers to force the costs of subsidizing others onto private individuals. New York Citycould certainly create a program in which tax dollars are used to directly subsidize the rents of those in need by giving money either to the tenant or to the landlord. The city could also provide more state-built, low-income housing. Either program could achieve the goals of rent control without many of the accompanying negative effects (although, of course, both programs would have many horrible problems of their own).

Such taxpayer-funded programs, however, would not serve the immediate goals of many city politicians: to provide benefits seemingly without cost. In a way, rent-control laws are a lot like the individual mandate of Obamacare currently under challenge in the Supreme Court. Both allow lawmakers to use regulatory requirements in lieu of raising taxes to pay for a program (I discussed how this works in Obamacare here). Rent-control laws permit lawmakers to avoid the political accountability of taxpayer-funded, on-budget subsidization by forcing individual property owners to subsidize tenants in the name of the “public good.” Whatever the merits of such a proposal, innocent landlords such as the Harmons should not be forced to become pawns in lawmakers’ attempts to avoid losing the next election.

It is unfortunate that the Court will not hear the case, but I applaud Mr. Harmon for bringing much-needed attention to an important issue.

Now we wait and see: Harmon’s final reply brief at the Supreme Court

 

No. 11-496
IN THE
Supreme Court of the United States
ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
A
(800) 274-3321 • (800) 359-6859
JAMES D. HARMON, JR. and JEANNE HARMON,
Petitioners,
v.
JONATHAN L. KIMMEL, in his offi cial capacity
as MEMBER AND CHAIR OF THE NEW YORK
CITY RENT GUIDELINES BOARD, CITY OF NEW
YORK; DARRYL C. TOWNS, in his offi cial capacity as
COMMISSIONER, NEW YORK STATE HOMES AND
COMMUNITY RENEWAL,
Respondents.