Writing at Time magazine, Yale Law School lecturer Adam Cohen takes notice of New York City landlord James Harmon’s legal challenge to the city’s rent stabilization law. As Cohen sees it, rent control and rent stabilization are both perfectly constitutional, but he still worries that Harmon may attract five sympathetic votes from the Supreme Court. He writes:
The Supreme Court has repeatedly upheld rent control, going back to 1921. In 1988, in Pannell v. San Jose, it ruled 6-2 that San Jose’s law did not violate the Constitution — in an opinion written by the very conservative then Chief Justice William Rehnquist. In 1992, in Yee v. City of Escondido, the court unanimously rejected a claim that a rent-control ordinance was an unconstitutional taking of property — just the issue Harmon is raising.
These rulings should settle the question. But rent-control opponents clearly think they have a chance, given how pro-corporation the court is today…. They argue that rent control unconstitutionally deprives landlords of the right to charge as much rent as they want. They like to point to extreme cases of people benefiting who do not need it — like the actress Faye Dunaway, who until recently had a $1,048.72-a-month one-bedroom on the Upper East Side of Manhattan Continue reading →
The handsome five-story brownstone located at 32 West 76th Street in Manhattan doesn’t look like it belongs at the center of a contentious legal struggle. But that impression changes when you learn about the recent activities of its owner, 68-year-old James D. Harmon Jr.
Harmon, a former federal prosecutor who once served as chief counsel to President Ronald Reagan’s Commission on Organized Crime, has filed a powerful legal challenge asking the U.S. Supreme Court to strike down New York City’s four-decades-old rent stabilization law. At first, New York officials thought so little of Harmon’s challenge that they waived their right to file an opposing brief with the Supreme Court. But those officials got a rude awakening when the Supreme Court asked them to respond to Harmon’s petition anyway, signaling that somebody at the Court took the legal challenge seriously.
“If you wanted to destroy a city’s housing – short of bombing – the best way to do it is rent control,” says Cato legal associate Trevor Burrus.
While most cities in America long ago got rid of rent control, New York remains a bastion of government-mandated limits on what landlords can charge renters. About 50 percent of New York’s rental market is affected by rent control or rent stabilization, policies that keep rents artificially low and produce housing shortages, higher overall housing costs, and all sorts of corruption.
The court case Harmon v. Kimmel may finally bring an end to rent control laws that have been on the books in one form or another since the 1940s. James D. Harmon owns a building in Manhattan where the tenants are paying rents that are about 60 percent below the going market rate. After losing various legal battles at lower levels, Harmon has petitioned the Supreme Court to hear his argument that rent stabilization is a form of takings that should be prohibited under the Constitution. The Court has not yet announced whether it will hear the case but has asked the state and city of New York to respond to Harmon’s argument.
Cato’s Burrus wrote a friend of the court brief on the case and explains why rent control and rent stabilization are bad at promoting affordable housing and abridgments of economic freedom.
Shot and edited by Joshua Swain.
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