Supreme Court Hears Takings Case

In oral arguments before the Supreme Court, the Federal government appears to argue that temporary flooding is never a taking of private property. This case has echoes of RSA’s amicus brief in the Harmon rent control challenge in which we argued that a temporary taking, if continued long enough, must be a taking. It will be interesting to see if the Supreme Court decision in this case (Arkansas Game and Fish Commission v. U.S.) provides any fodder for another attempt at overturning rent controls.

                                                    – Jack Freund, Executive Vice President, Rent Stabilization Association 

(Views and opinions expressed are those of the author and do not necessarily reflect the policy or position of the RSA.)


Justices Press Lawyers for Broad Solutions




WASHINGTON — The Supreme Court heard arguments in two very different cases on Wednesday, one about flooding and the other about murder. Together, they illuminated a central preoccupation of the justices: how to fashion legal principles that will not only resolve the disputes before them but also work when applied by lower courts in countless other cases.


In both arguments, the lawyers with the better answer to that question seemed poised to come out ahead.

“What I want is the definition of the operable baseline that we can use in order to define whether or not there has been a taking,” Justice Anthony M. Kennedy said, for instance, to a lawyer for the Arkansas Game and Fish Commission. The commission is seeking millions of dollars from the federal government for timber it says was destroyed by intermittent flooding caused by the Army Corps of Engineers.

The lawyer, James F. Goodhart, hedged, proposing a balancing test that would weigh how substantial the government intrusion on private property was. “I guess I must say it may not be a bright line,” Mr. Goodhart said.

He returned to the point unprompted a half-hour later. “I don’t know, Justice Kennedy, where the line should be drawn,” he said.

Justice Ruth Bader Ginsburg asked whether a single flood could ever be a taking.

Mr. Goodhart responded that “it’s going to going to depend on the facts, Your Honor, in the case.”

Justice Sonia Sotomayor pressed him. “Tell me how your rule makes this a manageable situation,” she said, and he repeated his balancing test.

Edwin S. Kneedler, a lawyer for the federal government, took the more promising categorical approach, proposing two different lines. Temporary flooding is never a taking of private property, he said. And harm caused by flooding downstream from a dam, as opposed to flooding from the reservoir it creates, is also not a taking, he said.

The second distinction seemed to strike some of the justices as overreaching. Justice Antonin Scalia said, “That doesn’t seem to me particularly fair.”

Justice Kennedy said the second distinction reminded him of “the old moral of refuge that the rocket designers take.”

“You know,” he said. “I make the rockets go up. Where they come down is not my concern.”

Justice Elena Kagan was disqualified from the flooding case, Arkansas Game & Fish Commission v. United States, No. 11-597, presumably because she had worked on it as United States solicitor general.

The question in the murder case was how to decide when a state court has actually ruled on an issue. The point matters because a 1996 federal law limits federal court review of state convictions where an argument has been “adjudicated on the merits” by a state court.

But people convicted of serious crimes often make many arguments, and state courts often reject them wholesale in terse decisions. Last year, in Harrington v. Richter, the Supreme Court ruled that a state court decision was “on the merits” even though it offered no reasoning at all.

The question in the case argued on Wednesday, Johnson v. Williams, No. 11-465, was what to do about a decision that addressed one argument but said nothing about another. (That other argument was over whether the removal of a juror in a murder trial violated the Sixth Amendment’s guarantee of an impartial jury.)

Stephanie Brenan, a deputy California attorney general, said judges should be assumed to have considered all arguments presented to them whether they address them directly or not. Kurt D. Hermansen, a lawyer for the inmate, Tara Williams, said federal courts should examine the issue case by case.

Justice Kennedy proposed an alternative. “If you took $28.52 out of the state’s judicial budget and bought them all a stamp which just says, ‘We have considered and rejected all constitutional claims,’ then there would be no problem,” he said.

Ms. Brenan said such language was already implicit in all rulings.

Justice Scalia, who is often attracted to bright line rules, said allowing case-by-case determinations would produce endless litigation. “In many cases, especially capital cases,” he said, “one could argue for years over whether, in fact, there was enough indication that the court did not consider it or not, right? And every year is a reduction of sentence, so to speak.”

Source: The New York Times

Tossed-Out $20 Tenants Turn Millionaires in Mumbai

By Pooja Thakur on June 25, 2012


Thousands of rent-controlled tenants in Mumbai paying $20 a month, and often less, are being turned into millionaires by developers tearing down crumbling colonial mansions to build luxury towers for the rich.

South Mumbai, including a stretch of prime land hugging the Arabian Sea, has about 500 dilapidated stone structures dating back to the early 1900s with a potential redeveloped value of about $40 billion, according to Pujit Agarwal, managing director at Orbit Corp. (ORB), a Mumbai-based developer that derives about 80 percent of its revenue from redeveloping old buildings.

“For generations, most tenants were living a hand-to-mouth existence, barely making two ends meet,” said Agarwal, whose firm is one of around 75 vying to oust Mumbai’s rent-controlled residents. “Now, with redevelopment, these tenants have become multimillionaires overnight as capital values of the properties they occupied soared.”

Home prices in Mumbai have climbed to a record 10,833 rupees ($200) per square foot, doubling in three years, according to Liases Foras Real Estate Rating & Research Pvt, a research company based in the city. Continue reading

New York Gets To Keep Its Broken Housing Market

By  May 18, 2012, 8:00 AM

New York City has, without a doubt, the most dysfunctional housing market of any large city in America. A lot of New Yorkers like it that way – and it looks like they will be able to keep their broken system for the foreseeable future.

If you live someplace where normal forces of supply and demand govern housing, you may be surprised to learn that New York tenant advocates were quite pleased when Mayor Michael Bloomberg recently declared that his city is experiencing a housing emergency. This “emergency,” defined in this case as a vacancy rate in rental housing of less than 5 percent, has existed continuously since 1969.

In most other places, such a tight housing market would have long ago been brought into balance by some combination of rent increases and new construction. The two are related. Rent increases would prod some tenants to look for cheaper housing outside the five boroughs, and it would encourage more development of new housing stock by boosting economic returns for landlords.

But under New York’s 1969 Rent Stabilization Law, so long as the city continues to face a housing emergency, it can set maximum permissible rent increases for about 1 million apartments, according to The New York Times.

The Supreme Court recently declined to hear a case that challenged the constitutionality of the rent stabilization law. The court had, somewhat unexpectedly, asked for some additional information before ultimately deciding not to proceed with the case. This led to some brief speculation that the longstanding rent controls might be in danger. Continue reading

‘Ruined’ by rent control

Ny Post

‘Ruined’ by rent control

Landlords may lose home


Posted:2:37 AM, May 6, 2012

The lawsuit that almost overturned the city’s rent-control laws only succeeded in upending the lives of the Upper West Side couple who brought the case.

After the Supreme Court refused to hear New York’s highest-profile lawsuit challenging rent control, landlords James and Jeanne Harmon said they may have to sell the five-story town house at the center of the battle — a brownstone their family has called home for three generations.

The case has been costly. The couple had to put off retirement, they cannot provide homes for their grandchildren and they are treated like pariahs by some neighbors on West 76th Street.

“We feel total uncertainty about the future at age 69,” James Harmon, a Vietnam veteran and former federal prosecutor, told The Post. “This was devastating to our family because the house is part of our family. This is the place I grew up, and this is the place my mother died. We should be able to keep this house, but we don’t know if we can continue to do that.”

Harmon argued the city’s 43-year-old rent-regulation laws violated the Fifth Amendment, which protects private property from seizure for public use without “just compensation.” Harmon claimed the rent law denies him that compensation, forcing him to bankroll the lifestyles and second homes of his tenants.

The Harmons occupy an elegant one-bedroom apartment on the building’s parlor floor. They rent six one-bedroom units: three at market value and three at rent-stabilized rates 59 percent below market.

The Harmons moved into the building in 2005, after they took out a $1.5 million mortgage to buy Harmon’s brother’s share of the building they inherited. Continue reading

Rent Control Violates Property Rights: Why Occupy 76th Street Is Not Fair

OP/ED | 4/30/2012 @ 2:55PM


If James and Jeanne Harmon, residents of the Upper West Side of Manhattan, ever call 911 to report a home invasion, they probably shouldn’t expect the NYPD to respond.

Mr. and Mrs. Harmon are senior citizens and the owners of a five-story brownstone on West 76th Street.  They live in the first floor apartment and several unwanted tenants occupy the upstairs apartments.  Under New York’s Rent StabilizationLaw (RSL), Mr. and Mrs. Harmon are required to continue renting the apartments at vastly below-market rents.

The Harmons challenged the constitutionality of the RSL in federal court, claiming that the law violates the Fifth Amendment (“nor shall private property be taken for public use without just compensation”), the Contracts Clause (prohibiting States from “impairing the obligation of contracts”) among several others.  Having lost in lower courts, including a snide opinion from the U.S. Court of Appeals for the Second Circuit, the Harmons appealed to the U.S. Supreme Court.  Last week, the Justices refused to hear their case.  As a result, the Harmons will likely be forced to provide subsidized housing to their tenants (and their descendants) forever. Continue reading

Rent Spikes Denied

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Supreme Court says “No” to Upper West Side landlord, keeping rent control intact

By Sean Creamer and Anam Baig

Earlier this week, the Supreme Court weighed a decision that could have meant the destruction of rent regulation in New York. The court decided on Monday morning, after several delays and requests for more information, not to hear a case brought by Upper West Side resident James Harmon against the state’s rent regulation laws. While supporters of Harmon’s fight grumble and regroup and advocates of rent regulation breathe a collective sigh of relief, many people have said that they were surprised that the challenge went this far in the first place, and that the fight to keep rent regulations in place is not likely to end any time soon.

City and state agencies charged with defending rent regulation reiterated the long-standing viability of the law, even as it is has faced legal challenges in the past.

“We are pleased that the Supreme Court will allow the existing court rulings dismissing this case to stand. Rent regulation in New York City has a long history, and the court properly left it to elected state and city officials to decide its future,” said Alan Krams, senior counsel of the Appeals Division, in a statement issued by the New York City Law Department.

While rent control is designed to enable people who cannot afford market-rate rents to stay at a comfortable level in the city, one disgruntled property owner decided that his tenants were taking advantage of this system. Harmon sued to overturn the regulations that he said amounted to the taking of his property, since he was not able to rent the units out at market rates. Continue reading

Supreme Court ducks lawsuit on rent regulation

NY Daily News



Published: Wednesday, April 25, 2012, 4:00 AM

Oh, to have been a fly on the wall when the justices of the Supreme Court discussed whether to consider a challenge to the constitutionality of New York rent regulations as applied to one Manhattan property owner.

The petition for a hearing filed by James Harmon, whose family has owned and lived in a five-story upper West Side brownstone for decades, scared the bejeezus out of tenant advocates and the Democratic establishment.

Why? Because he made a powerful argument that the law forced him to rent in perpetuity to tenants and their heirs at well below market rate, thus depriving him of full enjoyment of property, thus, in effect, taking his property without compensation in violation of the Fifth Amendment.

The court’s inscrutable handling of the matter suggested at least one justice was inclined to put it on the calendar, but in the end it wasn’t to be. A majority said no without explanation, which is in keeping with the court’s standard procedure.

By our reckoning, that was a sad mistake. Harmon waged a valiant uphill fight seeking a statement from America’s highest legal authority about the limits of one man’s private property rights. The question was fundamental and deserved an answer.


Source: NY Daily News