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An Introduction to the NYC Rent Guidelines Board
Table of Contents

HISTORY OF THE BOARD AND THE RENT REGULATION SYSTEM
(PART III)

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(Part I) (Part II) (Part III)

Noteworthy Aspects of Selected Court Cases

Along with the development of the state and local laws discussed in the preceding section, frequent litigation over the past 30 years has done much to shape the operation of the Rent Guidelines Board and the rent stabilization system. What follows is a list of court decisions and some notes on how these decisions may have reinforced or changed the system and the Board's role in it. Some of the cases involve Rent Guidelines Boards that operate outside of the City under a mandate similar to that of the N.Y.C. Rent Guidelines Board. The cases themselves should be directly consulted for further information on the facts and issues involved in each.

  1. 8200 Realty Corporation v. Lindsay
    27 N.Y.2d 124, 313 N.Y.S.2d 733 (1970)
    - The New York Court of Appeals upheld the constitutionality of the real estate industry self-regulation system. Although noteworthy from a historical perspective, this case is no longer directly relevant to rent stabilization since the Rent Stabilization Association is no longer statutorily involved in administration of the rent regulations.
  2. Associated Builders/CHIP v. N.Y.C. Rent Guidelines Board
    Supreme Court N.Y. Co., Special Term Part I (1974) Index No. 11928/74
    - The court rejected RGB guidelines on the grounds that they were not accompanied by a detailed explanatory statement.
  3. Strausman v. Herman
    52 A.D. 2d 882, 383 N.Y.S.2d 59 (2d Dept.1976), aff'd 42 N.Y.2d 1053 (1977)
    - The Appellate Division found that an affidavit by the Chairman of the Nassau County RGB stating that a DHCR ruling was consistent with the intent of the rent guideline it was interpreting was sufficient to support the validity of the ruling. Thus, the annulment of that ruling by a lower court was reversed. Therefore the courts will give the Board's interpretation of its own orders great weight.
  4. Allyn Realty Corp. v. Herman
    56 A.D.2d 626, 391 N.Y.S.2d 685 (2d. Dept. 1977) [Involves Nassau County RGB]
    - The court ruled that the literal meaning of Board orders should be adhered to unless the literal interpretation of such meaning would lead to an absurd result.
  5. Incorporated Village of Great Neck Plaza v. Nassau Co. Rent Guidelines Board
    60 A.D. 2d 593, 400 N.Y.S.2d 120 (2d Dept. 1977)
    - The Appellate Division ruled that the Nassau County RGB's failure to consider financing costs, vacancy rates and data reasonably available with respect to owners' net incomes, as required by 4(b) of the Emergency Tenant Protection Act of 1974 (a provision corresponding to 26-510(c)) resulted in the invalidation of its guidelines.
  6. Rent Stabilization Association v. N.Y.C. RGB
    98 Misc 2d 312, 413 N.Y.S.950 (1978)
    - The Supreme Court, New York County, ruled that the Open Meetings Law applies to RGB Meetings. Because of violations of this law, the court ordered that the RGB hold further meetings to promulgate new guidelines but refrained from establishing court ordered guidelines in the interim period.
  7. Coalition Against Rent Increase Passalongs v. Rent Guidelines Board of N.Y.C.
    104 Misc 2d 101, 427 N.Y.S.2d 660 (Sup. Ct. N.Y. Cty. 1979) aff'd 176 A.D.2d 343 (1980)
    - The Supreme Court, New York County, ruled that reopening of RGB guidelines for adjustments after the July 1, annual adjustment was permitted. This, however, is no longer permissible under the Omnibus Housing Act of 1983. - Also, the court noted, "...all rent controls in the City of New York [citations omitted] have a twofold purpose: to limit profiteering in a market marked by housing shortage and to conserve and improve the housing stock of the City of New York."
  8. Incorporated Village of Great Neck Plaza v. Nassau County RGB
    69 A.D. 2d. 528, 418 N.Y.S.2d 796 (1979)
    - The court ruled that Nassau County RGB is not a state agency and therefore is not subject to the State Administrative Procedure Act (SAPA). Following the same rationale, the New York City RGB is also not subject to SAPA.
  9. Liotta et. al. v. RGB
    547 F. Supp. 800 (S.D.N.Y. 1982)
    - Property owners argued in federal court that a loud and boisterous atmosphere at an RGB meeting precluded fair and rational deliberations and resulted low rent increases which constituted a denial of due process to the owners. The United States District Court for the Southern District found that in instances where state law provides an adequate remedy to initially seek redress of alleged due process violations, a plaintiff must seek state court review of the issue before it seeks review in federal court.
  10. Matter of Muriel Towers Co.
    117 Misc. 2d 837 (Sup. Ct. N.Y. Co. 1983)
    - The Supreme Court, New York County, found that the "circus atmosphere" (created by the exercise of constitutional rights by a "vocal citizenry") at an RGB meeting did not prevent rational deliberations by the Board. The Court also found that the Board's consideration of tenants' ability to pay in setting guidelines is proper.
  11. METHISA v. RGB
    Supreme Court N.Y. Co. Index No. 21444/84(1984)
    - A 0% adjustment guideline for hotel rents following hearings in which evidence of extensive neglect and deprivation of services in these buildings was presented was upheld. According to the court, the RGB is permitted to consider the nature of the services provided as part of its examination of expenditures. Such consideration is not penal nor quasi-judicial in nature and thus does not exceed the RGB's jurisdiction.
  12. Stein v. RGB
    127 A.D. 2d 189, 514 N.Y.S.2d 222 (1st Dept. 1987)
    - The Appellate Division, First Department ruled that supplementary Board orders or re-openers are permissable to protect the public from the impact of changed economic conditions in the housing market. [Reopening the guidelines in the same guideline period is no longer permissible since the passage of the Omnibus Housing Act of 1983. See #7]
  13. RSA v. Dinkins, RGB / Gesmer
    Sup. Ct., N.Y. Co., Index No. 11506/90; 167 A.D.2d. 179, 562 N.Y.S. 2d 411 (1st Dept. 1990), app. den. 77 N.Y.2d. affd. 809 (1990)
    - The Supreme Court, New York County, ruled that absolute impartiality in landlord-tenant matters is not a prerequisite to appointment as a public member of the RGB. In addition, the court held that the qualifications of Ellen Gesmer, which included 11 years experience as an attorney handling housing related matters, met the statutatory requirement of "at least five years experience in either finance, economics or housing." (See note in next case)
  14. RSA v. Dinkins, RGB / Friedheim
    Sup. Ct., N.Y. Co. - N.Y.L.J. 4/3/91 p.22, col. 1
    - The Rent Stabilization Association (RSA) sought to have Oda Friedheim, a tenant member of the RGB removed, alleging that she was an officer in a tenant organization in violation of the Rent Stabilization Law. The court ruled that a Quo Warranto action brought by the Attorney General was the exclusive means for contesting title to a public office in New York State. [Note: The exclusive right of the Attorney General to contest title to office was raised on appeal in the Gesmer case as well. The Appellate Division chose to follow the lower court's ruling on the merits - and never addressed this standing issue.]
  15. 23 Realty Associates v. Tiegman et al.
    Sup. Ct., Co. of N.Y. Index No. 12465/91 App. Withd. 176 A.D.2d. 1251 (1st Dept. 1991)
    - A rent stabilized hotel owner claimed that hotel guidelines from 1984 through 1990, were adopted without any lawfully required investigation, or proper consideration of all guideline components and criteria. The court ruled that the City had "marshaled considerable data to show that RGB enacted its guidelines after giving due consideration to the [required] criteria". - The Court also ruled that all challenges except the challenge to the most recent guideline were time barred by a four month statute of limitations.
  16. RSA v. Dinkins / RGB
    U.S. District Court, S.D.N.Y. (J. Stanton) 805 F.Supp. 159 (S.D.N.Y 1992), affd. 5 F.3d 591 (2d. Cir. 1993)
    Note: Since this case directly concerns the RGB's methodology, a summary of the District Court's opinion is provided. This summary is for informational purposes only. The plaintiff dropped the challenge against the RGB methodology on appeal, and the Second Circuit Court of Appeals reviewed the case de novo. Therefore, the decision of the District Court is not binding precedent.

    The District Court Opinion

    - The RSA initiated a challenge in federal court alleging inter alia that the guidelines over several years failed to account for the effects of inflation on owners net operating income. They argued that this failure, along with an inadequate hardship mechanism, resulted in an unconstitutional taking of property because such adjustments were essential to maintaining a "reasonable return on the property as an investment." The court stated that "a 'reasonable return' is not protected by law in this circuit" (p.163). Instead, the court made clear that the relevant test at issue is whether or not economic viability is impaired. Citing a prior case the court noted, "the crucial inquiry...is not whether the regulation permits plaintiffs to use the property in a 'profitable' manner, but whether the property use allowed by the regulation is sufficiently desirable to permit property owners to sell the property to someone else for that use." Id. The court did not conclude that the RGB failed to provide owners with a reasonable return, but found that even if the RSA's allegations to that effect were true, an unconstitutional taking would not necessarily have occurred. The court also emphasized the difficulty of mounting a facial challenge to rent regulations, noting that unlike an "as applied" challenge where a concrete injury to an individual plaintiff is demonstrated, in facial challenges plaintiffs must "establish that no set of circumstances exists under which the act would be valid."

    The Opinion of the Second Circuit Court of Appeals, 5F 3d 591(2d. Cir. 1993)
    - On appeal to the Second Circuit, the plaintiff dropped the challenge against the RGB's methodology but pressed the claim that DHCR's hardship rent increase procedures (explained in detail at 74 to 76) were facially unconstitutional because such procedures did not guarantee an adequate return. The appeals court concluded that such claims could only be framed in an "as applied" challenge, and that "the proper recourse is for the aggrieved individuals themselves to bring suit" (p. 595). The court noted that although such an approach to a suit "may appear inefficient and burdensome, it is the only way to present a federal court with the type of live 'case or controversy' demanded by the Constitution. Moreover, it is the only realistic way to be able to resolve it fully and fairly." Finding that the RSA lacked proper standing to bring an as applied challenge, the Second Circuit unanimous affirmed the District Court's decision.

  17. The Greystone Hotel v. City of New York, the Rent Guidelines Board et al.
    98-9116 (2d. Cir 1999) (unpub. op.) affg. 13 F. Supp. 2d. 524 (S.D.N.Y. 1998)
    - The owner of a "Class B" hotel argued that the RGB violated its rights to due process and equal protection by granting lower rent increases than those given for apartments. The owner also argued that the rent stabilization law and code effected a physical and regulatory taking of its property. Because the property retained some economic value no regulatory taking was found. Because the owner initially chose to use the hotel as a rental property, no physical taking was found. With respect to the relatively lower rent adjustments given to hotel owners the owner claimed that it was being forced to address the affordability problems of lower income tenants. The court found that the "RGB considered tenant hardship in accordance with a statutory scheme that mandated this consideration in conjunction with a host of other factors that explicitly weigh landlord costs" (p.3). Because the RGB made "a rational attempt to accommodate the conflicting interests of protecting tenants from burdensome rent increases while at the same time ensuring that landlords are guaranteed a fair return on their investment" no due process or equal protection violation was found, citing Pennell v. City of San Jose, 485 U.S. 1, 13 (1988). Notably, the Court declined to permit this decision to be used as a precedent in subsequent proceedings. Thus, while it resolved the dispute between the parties, it may not be cited as precedential authority in future legal proceedings.
  18. Benroal Realty LP v. Nassau County Rent Guidelines Board
    Supreme Court, Nassau County, N.Y.L.J. 2/14/01 p.31, col. 6
    - The Nassau County Rent Guidelines Board linked its rent adjustments to whether or not each affected community under its jurisdiction offered a Senior Citizen Rent Increase Exemption (SCRIE). Tenants in communities without a SCRIE program received higher rent increases than tenants in communities with a SCRIE program. The Supreme Court, Nassau County, ruled that the Nassau County RGB had "no statutory or inherent authority to extend the state statutory benefits of SCRIE for eligible seniors to non-eligible tenants generally."

The Constitutionality of Rent Regulation

The constitutionality of rent regulation is an issue commonly raised in discussions about the RGB's orders. Because it is rarely analyzed, an extensive treatment of the issue is provided below.

The Takings Clause of the Fifth Amendment to the United States Constitution, made applicable to the states through the Fourteenth Amendment, provides that private property shall not be taken for public use without just compensation. The Takings Clause has been a source of great dispute and scholarly debate for over a century. Today, the relevant test is whether the law advances a legitimate state interest and does not deny all economically viable use of property.

Generally speaking, constitutional scholars have all but given up arguing that rent regulations inevitably result in an unconstitutional taking of private property.56 The few scholars who persist in such attacks often founder on definitional grounds. If even the smallest degree of price or rent regulation results in an unconstitutional taking because the "natural" order of the market is altered in a way which favors one party over another, every act of government which economically disadvantages someone to the benefit of another becomes suspect. Virtually every law has some burden shifting economic impact. Economic interests, as measured in pure market terms, are constantly being diminished or enhanced by governmental action. Only property rights, a limited subset of such interests, receive constitutional protection. As Harvard law professor Frank Michelman has explained, if every existing "legally sanctioned advantage is property" we are gradually "forced to recognize in every act of government a redefinition and adjustment of a property boundary [for which compensation must be paid]. The war between popular self government and strongly constitutionalized property now comes to seem not containable but total."57

Constitutional norms shaped by settled precedent and adjusted by evolving practical concerns are precisely what prevent this "war" from spreading. Within our democratic system, property (and the power that attaches to it) is thus treated as a legal norm - informed but not controlled by economic analysis.58 The reasonable expectations of property owners are supported by legal protections that operate outside of any abstract or purely economic definition of property. But expectations alone do not define property rights. As constitutional scholar Laurence Tribe has observed:

Grounded in custom or necessity, these expectations achieve protected status not because the state is deigned to accord them protection, but because constitutional norms entitle them to protection. These norms, however, cannot be expressed entirely within the language of expectations; that path is a circular one inasmuch as expectations are themselves subject to governmental manipulation. Instead, the norms must reflect a mix of several concerns -- including regularity... autonomy ...and equality. Without appeal to such concerns we are defenseless against the alluring but fatal argument that, since it is government that gives, government is free to take as well.59

Some scholars have suggested that we should look back to the original intention of the Framers to determine what was meant by the term property at the time the Bill of Rights was adopted. Even if the Fifth Amendment's prohibition against taking property terminated the conceptual development of what is meant by "property", thereby freezing what was included in the term in 1791, locked in with it would be the operative meaning property received under the common law - a meaning which, as previously discussed, failed to immunize against price and rent regulations.60

As with all language, what is meant by a legal term or phrase is inseparable from the experience of its users. A legal term which remains in use for centuries is subtly remolded by the evolving culture, manipulated by pressing interests, nuanced by changing contexts and animated by the unique frame of reference brought to bear by each new interpreter. No special exception exists for the term property. Thus, "property" may one day incorporate within its meaning an inviolable right to demand any price that a market might allow; or it may include fewer rights than are presently secured. In any reasonable construction of the term property and the rights it implies, the correct constitutional balance will hang somewhere between established understandings and emerging practical concerns. As Professor Michelman puts it, "balancing - or, better, the judicial practice of situated judgment or practical reason - is not the law's antithesis but a part of law's essence."61

Scholarly disputes about the nature of property and the extent of constitutional protections are likely to continue as long as scholars, property and the Constitution are around. There is, however, a rather large body of authoritative court decisions that deal with the "takings" issue, along with a number of other constitutional concerns raised by the regulation of rents.

While "takings" claims have presented the most notable challenge, rent regulations have also been attacked as violative of substantive and procedural due process, equal protection, the Contracts Clause, as exceeding Congressional war powers, violating the doctrine of separation of powers, imposing involuntary servitude, and as an unconstitutional quartering of troops.62 Few such challenges have been successful.

The U.S. Supreme Court's Treatment of Rent Control Laws

The first significant constitutional challenge to rent controls followed the adoption of post World War I controls in Washington D.C. and New York City. These "due process" challenges were rejected in an opinion written by Justice Oliver Wendall Holmes in 1921.63 Notably, Justice Holmes' recognition of the concept of what is now referred to as a "regulatory taking," postdated these decisions by one year.64 The only instance where the United States Supreme Court has stricken a rent control statute came in 1924 when Justice Holmes found that the wartime justification of the rent controls had come to an end.65 On two occasions World War II era rent controls were unsuccessfully challenged before the U. S. Supreme Court.66

The most recent Supreme Court decision on a rent control ordinance, Yee v. City of Escondido,67 involved a physical takings claim. In Yee the U.S. Supreme Court held that where owners of rent regulated mobile home lots or "pads" had opened their property to occupation by others (the initial pad renters), they could not "assert a per se right to compensation based on their inability to exclude particular individuals", including those who purchased mobile home units from prior tenants, and thus succeeded them in their right to a rent controlled pad. The court explicitly decided not to review a regulatory takings claim which had not been raised at trial.

In Pennell v. San Jose,68 the court found no constitutional infirmity in a rent control ordinance which permitted the consideration of tenant hardship in a mechanism for special rent adjustments. Applying a rational basis standard of review, among other things, the court held that the hardship provision neither rendered the ordinance facially invalid under the Due Process clause, nor violated the Equal Protection Clause. The court recognized that "a legitimate and rational goal of price or rate regulation is the protection of consumer welfare."69 Perhaps most importantly, the Court declined to consider the appellant's claim that the hardship provision resulted in a regulatory taking. Finding that there was "no evidence that the 'tenant hardship clause' [had] in fact ever been relied upon by a hearing officer to reduce the rent below the figure it would have been set at on the basis of other factors set forth in the Ordinance"70 the majority declared the regulatory taking claim premature. In a notable dissent, Justice Scalia, joined by Justice O'Connor reached the regulatory takings issue and concluded that, because the hardship provision forced some individuals (landlords) to bear a public burden alone (i.e. support low-income tenants), the hardship provision resulted in a regulatory taking.

The dissent in Pennell suggests that policy makers should be wary about the constitutionality of any measure that imposes a discrete regulatory burden on owners due to the fact that they may have low income or hardship tenants in their building. It implies that the elimination of abnormal rents through rent controls is clearly constitutional. However, imposing a public welfare burden on individual owners may not be.71

In Greene v. Mirabel 72 the court dismissed for want of a substantial federal question a takings claim challenging the 7 1/2% statutory limit on annual rent increases under New York's rent control law. While the statute in question permitted a higher increase if landlord's could prove that the return on their investment was less than 8 1/2%, the landlords asserted that they were denied "hardship" adjustments before the Division of Housing and Community Renewal and in state courts.

Challenges to Rent Regulation laws before the New York Court of Appeals

Extending the application of recent U.S. Supreme Court decisions in the regulatory takings area, the New York Court of Appeals struck down two rent protection measures between 1989 and 1995, and upheld two others.

In Federal Home Loan Mortgage Corporation v. New York State Division of Housing and Community Renewal,73 the New York Court of Appeals held that units in a formerly rent stabilized building which underwent cooperative conversion regain the protection of rent stabilization if the building loses its cooperative status upon foreclosure of an underlying mortgage. This result was particularly unwelcome in the banking community. The market value of properties foreclosed upon could be expected to vary significantly depending on whether the property experienced free market rents or regulated rents following foreclosure. Hence the Court's decision to recognize a reversion to rent regulated status effectively raised the incentive on the part of financial institutions to arrange for workouts - as an alternative to foreclosure in financially troubled cooperatives.

Although the court in Federal Home Loan Mortgage Corp. appeared to have responsibility for addressing the narrow question of whether the building reverted to rent stabilized status,74 it also considered constitutional objections to the law which permitted this reversion.75 First, it addressed the plaintiff's claim that the law effected a physical taking. Recognizing that "the essence of plaintiff's dispute is not that it is being forced to use the property in a new or undesirable manner, but that the rent it charges in terms of the rental leases should be market based and not subject to regulation under the [Rent Stabilization Law]" the court found that "no new use of the property had been forced upon plaintiff, and no unconstitutional physical taking has been effectuated."76

The court also rejected a regulatory takings claim. Notably, in addressing the regulatory takings claim the court reiterated its recognition of the legal framework for finding a regulatory taking used in Manocherian v. Lenox Hill Hospital,77 and earlier in Seawall Assocs. v. City of New York.78

In Federal Home Loan Mortgage Corp., the Court of Appeals wrote:

The legal framework for finding a regulatory taking is well settled in this State. As we recently reiterated in Manocherian v. Lenox Hill Hospital regulation of private property rises to the level of an unconstitutional taking if the regulation (1) denies the owner all economically viable use of the property or (2) does not substantially advance a legitimate State interest. 87 N.Y.2d at 335.

Unlike the Manocherian case, however, [discussed below] the Court found that extending the protection of the Rent Stabilization Law to the former cooperative shareholders would "serve the same legitimate State interest served by application of the RSL in a housing shortage - 'preventing eviction and resulting vulnerability to homelessness of the identified beneficiaries"'. Having found the proper nexus, the court rejected the plaintiff's regulatory taking claim.

Manocherian v. Lenox Hill Hospital,79 is a rather complex case which held that the extension of rent stabilization protections to leases held by not-for-profit hospitals for ultimate use by hospital employees (as subtenants) resulted in a regulatory taking.

With the adoption of the Omnibus Housing Act of 1983 the New York State Legislature tightened rules with regard to sublets by, among other things, limiting the right to sublet to tenants who intended to return and occupy their units at the termination of the subtenancy. Since not-for-profit hospitals could not be prime/occupying tenants, the effect of this law was to terminate the rent stabilized status of leases held by such entities. As a result, a number of hospital employee/subtenants faced eviction. To remedy this unintended consequence the New York State Legislature adopted Chapter 940 of the laws of 1984, which restored rent stabilized status to these leases.

This re-establishment of rent protection for a non-occupying corporate entity was challenged by the plaintiff as a regulatory taking. Relying upon the takings standard articulated in Seawall, and finding that the Chapter 940 did "not protect and benefit specific occupant subtenants, but rather erect[ed] a subsidized housing regime for Lenox Hill Hospital's preferential allotment" the New York Court of Appeals held that Chapter 940 "suffers a fatal defect by not substantially advancing a closely and legitimately connected State interest."80 The court thus drew a distinction between a non-occupant corporate entity and housing consumers who intended to occupy their apartments. The court appeared to be influenced to some degree by the perpetual status of the hospital as a corporate tenant and by the fact that the hospital employees could be evicted upon discharge from their employment. These facts, the court ruled, contravened two key goals of rent protection "occupant protection and eventual market redemption."81

Notwithstanding the various considerations which appeared to weigh in the court's finding, this was the first time that the New York Court of Appeals ruled that a rent law produced unconstitutional subsidies. The ruling appears to suggest that any legislative attempt to protect non-occupying consumers (e.g., business and not-for-profit entities) in a market where rents are effected by a legislatively recognized housing shortage, will run into constitutional difficulties.

In Rent Stabilization Assn. v. Higgins,82 the New York Court of Appeals upheld an administrative regulation promulgated by the New York State Division of Housing and Community Renewal which granted unmarried partners of a permanent character succession rights of the same type enjoyed by surviving spouses. Among other claims raised by the appellants, the regulation was challenged as permitting a forced physical occupation of the property resulting in a per se taking. Relying upon Yee, the court concluded that "[b]ecause the challenged regulations may require the owner-lessor to accept a new occupant but not a new use of its rent-regulated property, we conclude that appellants have failed to establish their claim that, facially, a permanent physical occupation of appellant's property has been effected." The appellants also raised a regulatory taking claim. Dismissing the claim, the court found no deprivation of an economically viable use of the property and no failure to advance the legitimate state interest of protecting persons against the possible loss of their homes.

Although not directly addressing a rent regulation law in the same sense as Higgins, Manocherian and the Federal Home Loan Mortgage cases, these decisions have been influenced to some degree by Seawall Associates v. City of New York.83 Seawall involved an attempt to prevent the further decline and loss of single room occupancy housing by imposing a moratorium on the alteration, conversion or demolition of such housing. The law allowed an exemption for those who were willing to pay $45,000 dollars per unit into a low-income housing fund. In addition, the law mandated that unused units be repaired and rented out. Finding that the buy- out provision amounted to a form of "ransom" and that the rent up provision resulted in a forced physical occupation of the property, the New York Court of Appeals ruled that the law resulted in an unconstitutional taking. The foregoing developments suggest that long established, traditional rent control measures appear likely to survive judicial scrutiny against takings claims. On the other hand, new and novel extensions of such protections have met with mixed success. Particular care should be given to whether there is a clear nexus between such measures and previously established or recognized "legitimate state interests." The noteworthy aspect of some of these cases, particularly Manocherian, is that they suggest that the legislature's identification of new or expanded state interests are subject to close judicial scrutiny.

Go To:
(Part I) (Part II) (Part III)

An Introduction to the NYC Rent Guidelines Board
Table of Contents

Footnotes

56 But see Epstein, Rent Control and the Theory of Efficient Regulation, 54 BROOKLYN L. REV. 741 (1989) and Responses by various authors in 54 BROOKLYN L. REV. 1215 (1989).

57 Quoting Michelman, Takings, 1987, 88 COLUMBIA LAW REVIEW 1600, 1627-28 (1988).

58 As Justice Holmes put it in his famous Lochner dissent, "... a constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire. It is made for people of fundamentally differing views, and the accident of our finding certain opinions natural and familiar or novel and even shocking ought not to conclude our judgment upon the question of whether statutes embodying them conflict with the Constitution of the United States." 198 U.S. 45, 75 (1905).

59 Tribe, American Constitutional Law, pp. 608-609.

60 See text at page 16.

61 Supra, note 57 at 1629.

62 See Radford, Regulatory Takings Law in the 1990's: The Death of Rent Control?, 21 SOUTHWESTERN UNIVERSITY LAW REVIEW 1019 (1992) (internal citations omitted).

63 Block v. Hirsh, 256 U.S. 135 (1921) (dealing with Washington, D.C.'s rent control laws); See, also, Marcus Brown Holding Co. v. Feldman 256 U.S. 170 (1921) dealing with New York City's rent control laws.

64 In Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922), (Justice Holmes recognized that if a regulation goes "too far" it will be recognized as a taking).

65 Chaselton Corp. v. Sinclair 264 U.S. 543 (1924).

66 Bowles v. Willingham, 321 U.S. 503 (1944) and Woods v. Cloyd W. Miller Co., 333 U.S. 138 (1948).

67 503 U. S. 519, (1992)

68 485 U.S. 1 (1987)

69 Id. at 13.

70 Id. at 11.

71 Compare Parrino v. Lindsay, 29 N. Y. 2d 30 (1971). In Parrino the New York State Court of Appeals had occasion to consider whether a temporary local law which generally froze rents for elderly persons with household incomes of less than $4,500, was unconstitutional. In citing the temporary nature of the measure and the fact that the rent levels paid had already been upheld as constitutionally valid, the Court of Appeals refused to find a denial of equal protection. The court also found that a regulatory taking had not occurred. This portion of the decision was criticized in a case that went before the Supreme Court of New Jersey a few years later. In Property Owners Association of North Bergen v. North Bergen, 378 A.2d 25 (1977) a North Bergen ordinance which provided that elderly tenants earning less that $5,000 annually would be immune from rent increases was found to result in an unconstitutional taking. There the Court held,

"A legislative category of economically needy senior citizens is sound, proper and sustainable as a rational classification. But compelled subsidization by landlords or by tenants who happen to live in an apartment building with senior citizens is an improper and unconstitutional method of solving the problem." 378 A.2d at 31.

Justice Scalia quoted this passage approvingly in his dissent in Pennell noting that the Supreme Court of New Jersey was dealing with "the same vice I find dispositive here" 485 U.S. at 23. Perhaps the Parrino case can be distinguished on the grounds that it dealt with a temporary measure and that the rent levels had already been found constitutional. The New Jersey Supreme Court was clear in its disagreement with Parrino, however, and passed over the opportunity to distinguish it from the North Bergen case. After noting that Parrino's "factual circumstances are not present here" the Court added, "and we do not find Parrino persuasive." 378 A.2d at 31.

72 485 U.S. 983 (1988).

73 87 N.Y. 2d 325 (1995).

74 This question had been certified from the United States Court of Appeals for the Second Circuit where the case had been under consideration. Id.

75 Rent Stabilization Law, NYC Admin. Code Section 26-504.

76 87 N.Y.2d at 335.

77 84 N.Y.2d. 385 (1994).

78 74 N.Y. 2d 92 (1989). See also Lucas v. So. Carolina Coastal Council 505 U.S. 1003 (1992).

79 84 N.Y.2d 385 (1994), cert den., 514 U.S. 1109 (1995).

80 84 N.Y.2d 385, 386 (1994).

81 84 N.Y. 2d at 394.

82 83 N.Y.2d 156(1994).

83 74 N.Y.2d 92 cert den. 493 U.S. 976 (1989).


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