The Supreme Court rejects property rights challenges to rent control in New York and California

(Julia Nikhinson/Associated Press)

The Supreme Court rejects property rights challenges to rent control in New York and California

David G Savage

February 20, 2024

The Supreme Court on Tuesday rejected a major property rights challenge to rent control laws in New York City and elsewhere that give renters the right to stay in an apartment with below-market prices for many years.

A group of New York landlords had filed a lawsuit alleging that the combination of rent control and long-term occupancy violated the Constitution’s ban on seizing private property for public use.

The judges had been considering the appeal since the end of September. Only Justice Clarence Thomas issued a partial dissent.

Thomas said the “constitutionality of regimes like New York City is an important and pressing issue,” but that landlords failed to provide evidence that they were prevented from “evicting genuine tenants for certain reasons.”

A ruling in the case could have directly affected 1 million apartments in New York City, and it could have had a significant impact in California as well.

The California Apartment Assn. had urged the justices to hear the case in New York, saying: “Many of its members are in local jurisdictions subject to rent control laws, including San Francisco, Los Angeles, San Jose, Oakland, Sacramento, Santa Monica , Berkeley, Pasadena, Alameda and Beverly Hills.”

In the past,

Rent control is enforced because it is a regulation of property, not a government takeover of it. But the Court’s conservative majority has recently expressed interest in strengthening property rights.

Two years ago, the Supreme Court struck down a California law that allowed union organizers to go to farms and agricultural facilities to recruit new members for the farmworkers union.

In a 6-3 ruling, Chief Justice John G. Roberts Jr. said. that the owners of private property have the “right to exclude others.” Citing that principle, New York landlords said they should have the right to evict tenants after their leases expire.

In January, the court heard a proprietary challenge to developer fees that could have a broad impact in California.

George Sheetz sued El Dorado County near Sacramento after he was assessed a $23,000 fee for a permit to place a manufactured home on a lot he owned.

The county said the fees, set by the legislation, paid for new and expanded roads in the area, and California courts ruled for the county.

But the judges in Sheetz vs. County of El Dorado sounded very divided on whether these building permit fees amount to the government taking private property.

In New York City, several owners of small and mid-sized apartments have filed a lawsuit, claiming that the new rent control laws have gone so far that “their property is no longer their property. New York has expropriated it,” they said.

They pointed to changes implemented in 2019 that make it more difficult to lock out tenants after their lease expires, even if the owner wants to give the space to their own family members.

While rent control was once championed as a temporary solution to the severe housing shortage, they said the laws now “provide tenants with a perpetual option to renew their leases, converting term leases into government-mandated residential neighborhoods.”

The New York cases are 74 Pinehurst LLC vs. New York and 335-7 LLC vs. the City of New York.


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