The Supreme Court has been tapped to take up a petition over a case challenging New York City's rent stabilization law, arguing the recently enacted measure has a "detrimental effect on owners and tenants alike."
The plaintiffs in the case include the Rent Stabilization Association of NYC (RSA) and the city's Community Housing Improvement Program (CHIP), arguing the Rent Stabilization Law (RSL) violates the takings clause of the 5th Amendment.
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"What New York has essentially done is commandeered these apartments and said they're going to be rental properties effectively in perpetuity," Andy Pincus, a partner at Mayer Brown who has argued 30 cases before the high court and is representing CHIP and RSA, told the Washington Examiner.
The recent petition stems from the groups' 2019 lawsuit asserting that the RSL violates the due process rights of property owners and affects both physical and regulatory takings of property that it regulates.
The RSL has had a "detrimental effect on owners and tenants alike and has been stifling New York City's housing market for more than half a century," the plaintiffs wrote in their high court petition, adding that it "appropriates owners’ right to exclude and other property rights."
After being dismissed at the district court level, the case moved to the United States Court of Appeals for the 2nd Circuit in late 2020, where it affirmed the lower court decisions.
The petition pending before the Supreme Court, known as Community Housing Improvement Program v. City of New York, is supported by 14 amicus briefs, marking a notable level of interest in a case that has yet to be taken up by the court.
The high court could decide whether to take the case as early as this fall.
The Cato Institute wrote in a brief that the high court's 2021 decision in Cedar Point Nursery v. Hassid cast a skeptical view on RSL's legality because the measure appropriated building owners' right to exclude and gave it to third parties. That decision struck down a California law that gave union organizers the right to enter farm property and speak with agriculture workers.
Plaintiffs point to the Supreme Court's "right to exclude" holding in Cedar Point as one of their primary bases for why the RSL constitutes a physical taking, Michael Johnson, communications director for CHIP, explained to the Washington Examiner.
But the 2nd Circuit disagreed with the notion that the Cedar Point decision does not negate the long-standing history of upholding laws regulating landlord-tenant relationships, such as the rent-stabilization law against, saying that's due to landlords voluntarily entering into rental agreements with tenants.
The appeals court also disagreed that rent increase limits create a regulatory taking, a theory that was floated in a dissent by justices Antonin Scalia and Sandra Day O'Connor from the 1988 decision in Pennell v. City of San Jose, arguing that notion had never been adopted by a majority of the court.
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The plaintiffs suggest their case should be ripe for review, in part because of a split between the 2nd Circuit and the U.S. Court of Appeals for the 8th Circuit.
That 8th Circuit ruling struck down a COVID-19 eviction moratorium in Minnesota because it infringed upon the “right to exclude existing tenants” from private property, holding it was a physical taking.
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