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.
“Unfortunately, rent control is a disaster for all but the privileged minority who are protected by it. As much as any other single factor, it is responsible for the desperate housing crisis that has plagued New York City for the past twenty years. Like a lot of failed government programs, rent control grew out of a decent idea that ended up backfiring. It began as a temporary federal policy in 1943, when the government froze the rent on every apartment in America as a way to provide affordable housing for returning veterans. Once that was achieved, in 1948, the law was rescinded. But New York City adopted its own rent-control law in 1962. Under its statue, any dwelling built before 1947 was subject to rent control. In effect, the city created an inalienable right for five million New Yorkers—namely, low-priced housing.
It sounded wonderful. The only problem was that the city had no intention of underwriting it. Instead, it forced landlords to subsidize tenants. The costs of fuel, labor, and maintenance rose steadily, but the city refused to let landlords raise their rents to keep pace with inflation, much less the market itself. When landlords simply couldn’t make ends meet anymore, they began abandoning—or torching—their buildings. Between 1960 and 1976, approximately 300,000 housing units in New York were abandoned. Whole neighborhoods in the South Bronx and Brooklyn turned into ghost towns. The city, in turn, lost hundreds of millions of dollars in real-estate taxes.