Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

New York City Can’t Force Owners to Rent Their Property Forever

by June 12, 2023
June 12, 2023

Thomas A. Berry and Nicholas DeBenedetto

New York City has maintained a system of rent control since the 1940s. Property owners in the City are subject to a thicket of regulations that affect their ability to rent and limit their right to exclude—arguably the most fundamental right in the “bundle” of property rights. The cornerstone of the City’s rent control regime is the Rent Stabilization Law (RSL) which was enacted in 1969 and has been amended on multiple occasions—most recently in June 2019. The RSL has been the subject of several lawsuits throughout the decades.

There are approximately one million units under the purview of the RSL, comprising half of all New York City apartments. The RSL authorizes a government board to set annual maximum rent increases for stabilized units. This board is required to consider tenants’ ability to pay as one factor in setting rents, alongside owners’ costs and housing affordability.

The RSL severely limits property owners’ rights to occupy, use, change the use of, and dispose of their property. The RSL requires owners to renew tenants’ leases in perpetuity with very few exceptions, and those exceptions are entirely within the tenants’ control. Additionally, these renewal rights may be passed on to any member of a tenant’s family who has lived in the tenant’s apartment for two years.

Once a tenant occupies a stabilized unit, an owner may not retake possession of the apartment for personal use. Only upon a demonstration of “immediate and compelling necessity” may an owner reclaim just one of his or her units. And buildings held in the name of a corporate entity have no personal use allowance at all.

The RSL also severely restricts owners’ rights regarding the buildings themselves. Owners may not withdraw their buildings from residential use, change their units to commercial rentals or cooperatives, leave their property vacant, or demolish their property.

A not‐​for‐​profit trade association representing many New York City apartment building owners sued to challenge the RSL in federal court, but the Second Circuit upheld the law. Now the owners are petitioning the Supreme Court to take their case. Cato, joined by the Manhattan Institute, has filed an amicus brief supporting that petition.

Our brief makes three key points. First, the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid (2021) casts serious doubt on the constitutionality of the RSL, since the City has appropriated building owners’ right to exclude and granted that right to third parties. All of the Supreme Court’s precedents addressing the constitutionality of rent‐​control statutes long predate the per se rule for physical takings articulated in Cedar Point, which calls for those precedents to be reexamined.

Second, there is already a circuit split between the Eighth and Second Circuits over whether property owners can allege that rent control effects a per se taking under Cedar Point. We argue that the Eighth Circuit correctly followed the Supreme Court when it held that a per se takings claim could proceed against an eviction moratorium, while the Second Circuit erred here in denying plaintiffs’ claim against New York City.

Finally, we argue that the Supreme Court should take this opportunity to reaffirm the foundational takings principle that government cannot require a subset of society to privately incur costs that should rightfully be borne by society as a whole. The RSL impermissibly imposes societal costs on property owners alone when it forces them to charge lower rental rates based on tenants’ ability to pay. For all these reasons, the Supreme Court should take the case and ultimately reverse the Second Circuit.

0
FacebookTwitterGoogle +Pinterest
previous post
The Fed’s Questionable CBDC Campaign
next post
It’s Not Just About Small Caps; Look Here Too

You may also like

Are Government Prohibitions Effective?

May 20, 2024

Solar Panels, Open Lands, and Federalism

November 6, 2024

It’s Either Chaos or This Plan: Paul Ryan...

June 27, 2024

US Withdrawal from the World Trade Organization Would...

May 15, 2025

Rather Than Litigate Over Encampment Sweeps, San Francisco...

August 31, 2023

The Perils of the Hegemon

November 10, 2023

My Thoughts on Letters in Black and White

May 25, 2023

Why So Much Public Land?

February 20, 2025

Kennedy Says Cut Subsidies for Farmers and Junk...

September 6, 2024

House Budget Committee Seeks to Reform Emergency Spending...

July 24, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Rescissions: A Small but Welcome Step Toward Spending Discipline

      June 5, 2025
    • DAVID MARCUS: Why Navy ships should not be named for gay rights icons

      June 5, 2025
    • GREGG JARRETT: Biden, the ‘marionette president; and the case of the runaway autopen

      June 5, 2025
    • Trump Practically Bans Travel and Immigration from 12 Countries with Flimsy Security Justifications

      June 5, 2025
    • ‘He’s not a big factor’: Trump’s Senate allies dismiss Elon Musk’s calls to ‘kill the bill’

      June 5, 2025
    • Fears grow that Tata Steel could be excluded from Starmer-Trump trade deal

      June 5, 2025

    Categories

    • Business (8,147)
    • Investing (2,008)
    • Politics (15,523)
    • Stocks (3,127)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved