US Supreme Court rejects rent control challenge

Crain's New York

 

High court declines to hear the case of a Manhattan couple who claimed that New York City’s rent stabilization law was forcing them to subsidize tenants in their Upper West Side brownstone.

April 23, 2012 12:45 p.m.

Published: April 23, 2012 – 12:45 pm

{Bloomberg} The U.S. Supreme Court refused to hear an appeal that would have challenged New York City’s rent stabilization laws. The decision was released Monday morning.

Landlords James and Jeanne Harmon, who own a five-story, six-unit brownstone at 32 W. 76th Street claim that the city’s rent stabilization laws unconstitutionally forces them to subsidize three of their tenants who pay rents that are 59% below market. The Harmons’ case, which began in 2008, was rejected by a federal district court and a New York State Supreme Court. Mr. Harmon appealed the decision to the U.S. Supreme Court and late last year there was a sign of hope when the Court ordered the city and state to respond to the petition, something that previous courts did not require.

“We still believe that the Constitution does not allow the government to force us to take strangers into our home at our expense for life,” said Mr. Harmon, in a statement. “Because of rent stabilization, it will now continue to be difficult for us to keep our home of five generations. We will not demolish our home as the federal courts suggested that we should do if we did not like the law.”

The brownstone has been in Mr. Harmon’s family since 1949. He inherited it in 1994. According to Mr. Harmon’s petition, “New York City’s Rent Stabilization Law 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.” Mr. Harmon, who resides in the building with his wife, claims that as a result the building’s value has been reduced substantially and his family is deprived of appropriate income. Continue reading

Supreme Court disappoints landlords, rejects rent-control challenge

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New York City's rent-control ordinance limits the rents of more than a million apartments. (Mark Lennihan / Associated Press)

By David G. SavageApril 23, 2012, 8:50 a.m.

WASHINGTON — The Supreme Court on Monday rejected a constitutional challenge to New York City’s famed rent-control ordinance, a post-World War II housing measure that limits the rents of more than a million apartments.

The court’s action is a setback for property-rights activists, who had hoped a more conservative court would protect landlords and a free market in rentals. For decades, critics have said rent-control laws deny property owners the right to fully profit from their investment.

The justices, four of whom grew up in New York City, turned away an appeal from James and Jeanne Harmon, who own a five-story brownstone building on West 76th Street in Manhattan. The couple says they have no choice but to rent three apartments on the upper floors for less than half of their market value.

They also say that one of their tenants can pay a $1,500-a-month mortgage on a Long Island house because he pays only $951 a month to rent a unit in Harmon’s building. Continue reading

High Court Turns Aside Rent Case

Wall Street Journal

NY POLITICS

Updated April 23, 2012, 10:18 p.m. ET

By BRENT KENDALL And JACOB GERSHMAN

WASHINGTON—The U.S. Supreme Court on Monday turned away a constitutional challenge to New York City’s decades-old rent regulations, refusing to take up the case of an Upper West Side landlord and his wife who argued that the government had violated their rights by forcing them to subsidize their tenants.

The high court refused without comment to hear the appeal of James and Jeanne Harmon, the owners of an Upper West Side brownstone. The couple sought to strike down the rules shielding three of their tenants—and about two million other New Yorkers—from market prices.

Lower courts had rejected the plaintiffs’ rent-control challenge. The case gained little attention until the Supreme Court in December requested that New York officials file written responses to the plaintiffs’ high-court appeal. That the court would signal any interest in taking a fresh look at a long-established law surprised legal experts on both sides. But the Harmons ultimately failed to persuade at least four justices to hear the case.

“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, a senior counsel at the city’s law department.

The Harmons argued that the rent rules amounted to a government seizure of private property without just compensation, violating the Fifth Amendment. One of their longtime tenants, an executive recruiter, pays about $1,000 a month for a one-bedroom unit, while owning a weekend home in the Hamptons. The couple also contended that the long sustained “public emergency” underpinning the rent controls violated due process.

High Court Denies Certiorari in Rent Stabilization Case

By Brendan Pierson Contact All Articles

New York Law Journal

April 24, 2012

 

The U.S. Supreme Court announced on April 23 that it will not hear a lawsuit challenging the constitutionality of New York City’s rent-stabilization law.

The case, Harmon v. Kimmel, 11-496, was filed against the city in 2008 by James Harmon and his wife, Jeanne. The couple owns an Upper West Side brownstone with six apartments, of which three are rent stabilized. The Harmons argued that the 1969 rent-stabilization law, intended to respond to a housing shortage, was an unconstitutional taking of their property.

Southern District Judge Barbara Jones (See Profile) dismissed the case in February 2010, and Judges Amalya Kearse (See Profile), Robert Sack (See Profile) and Robert Katzmann (See Profile) of the U.S. Court of Appeals for the Second Circuit affirmed the dismissal in March 2011. The Supreme Court’s refusal to hear an appeal marks the end of the case.

“We are pleased that the Supreme Court will allow the existing court rulings dismissing this case to stand,” Alan Krams, senior counsel in the Appeals Division of the Corporation Counsel’s office, said in a press release. “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.”

James Harmon said in an e-mail that the Harmon family was disappointed in the court’s denial of cert. “We still believe that the Constitution does not allow the government to force us to take strangers into our home at our expense for life. Even our grandchildren have been barred from living with us. That is not our America.”

“We are deeply disappointed that the United States Supreme Court did not accept what we believe to be relevant and legitimate property rights concerns of all New York City rent-regulated property owners, who have endured 70 years of rent regulation in one form or another,” Joseph Strasburg, president of the Rent Stabilization Association, which filed an amicus brief on the Harmons’ side, said in a press release.

 

Source: New York Law Journal.

NYC Rent Control: US Supreme Court Won’t Hear Harmon V. Kimmel

WASHINGTON — The Supreme Court won’t hear an appeal that seeks to end rent stabilization laws in New York City.

The high court on Monday refused to hear an appeal from James and Jeanne Harmon, who have lost earlier court attempts to get rent stabilization laws thrown out.

The Harmons' building in the Upper West Side.

The Harmons inherited a building with three rent-controlled apartments near Central Park on Manhattan’s Upper West Side. The Harmons say rent stabilization laws forces them to rent the apartments at rents 59 percent below market rate. They argue that by giving the tenants lifetime tenure with succession rights, the government has illegally taken their property.

A federal judge and the 2nd U.S. Circuit Court of Appeals in New York City threw out their lawsuit. The high court refused to review that decision.

 

Source: The Huffington Post.

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.

Supreme Court May Take On Rent Regulations As City Council Wants More Say Over RGB

04/16/2012 09:34 PM
By: Zack Fink

As the U.S. Supreme Court put off a decision on whether or not to hear a case challenging the constitutionality of the city’s rent regulation laws, some city legislative leaders demanded more say over appointments to the city Rent Guidelines Board. NY1’s Zack Fink filed the following report.

While the U.S. Supreme Court did not agree to hear the case, a process known as granting certiorari or “cert,” it did not deny the petition either.

That leaves the door open for the high to court to consider its first New York city rent regulation case since the 1920s.

“I don’t think there is much to read into it. I think the court obviously has a very large docket. They looked at hundreds of cases this past week, they granted cert in one case. They denied cert in many other cases,” said attorney Mathew Brett.

The case stems from a rent-regulated brownstone on Manhattan’s Upper West Side. The owner, Jim Harmon, who declined to be interviewed by NY1, is trying to evict at least one of his three-rent regulated tenants to use for a family member. One of those tenants owns a house in the Hamptons.

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