Some Good News out of the Court

The Supreme Court will not hear New York City landlord's case against rent control, which means that the appellate court ruling against them will stand.

I am pleased and surprised.

Last October, the justices declined to review a challenge to the constitutionality of New York’s rent-stabilization system, which applies to just under half of New York City’s rental housing and (among other things) limits rent increases and generally requires landlords to renew a tenant’s lease. On Thursday, the justices denied review in two cases presenting the same question, with Justice Clarence Thomas filing a statement regarding that denial.

The rent-stabilization system at the center of 74 Pinehurst v. New York and 335-7 LLC v. New York has been in place for over 50 years. It applies to approximately one million homes in New York City – 44% of all rentals. Under the system, a board appointed by the mayor sets the rate at which landlords may increase rents each year, and landlords must generally renew a tenant’s lease when it expires.

In 2019, the state enacted changes to the rent-stabilization system that were intended to provide more protection for tenants. Among other things, under the 2019 amendments landlords can only reclaim one rent-stabilized apartment for their own use or the use of their family. The law also allows courts to put an eviction on hold for a year even after determining that the tenant violated the lease.

In 74 Pinehurst and 335-7 LLC, a group of landlords went to federal court to challenge the rent-stabilization system. They argued that the system created both a “taking” of property under the Fifth Amendment, both as a general matter and as applied to them. For example, two of the landlords, Dimos and Vasiliki Panagoulias, want to set aside an apartment in their family’s building for another family member but are not permitted to do so. And the value of their buildings, the landlords said, has fallen as much as 60 to 70%. But the lower courts rejected those arguments, prompting the landlords to come to the Supreme Court earlier this year.

After considering the cases at 12 consecutive conferences, the justices denied review without any additional explanation.

In a two-page statement, Thomas emphasized that the “constitutionality of regimes like New York is an important and pressing question” on which the federal courts of appeals have taken different positions. But, Thomas explained, this case might not be a suitable one in which to consider the constitutionality of such regimes, because the challengers’ filings “primarily contain generalized allegations about their circumstances and injuries,” rather than the kind of analysis that would allow the justices to understand how the city’s regulations work. But “in an appropriate future case,” Thomas concluded, the justices should grant review “to address this important question.”

It looks like Thomas basically said, come back with a lawyer who knows how to file a case, so the potential for a ruling in support of landlords is a distinct possibility in the future.