The Supreme court may soon decide if New York state and city rent regulation laws (rent control/ rent stabilization) are constitutional.
An Upper West Side couple who own a Beaux-Arts brownstone at 32 West 76th Street between Central Park West and Columbus Avenue have been in federal court during the past few years attempting to overturn the rent regulations protecting their tenants. One of those tenants pays about $1,000 a month and has lived in the one-bedroom unit since 1976.
While I support affordable housing for poor and middle class families there are many affordable housing programs in NYC besides rent regulation such as HDFC coops, Mitchell Lama, 80/20, section 8.
Perhaps in the outer boroughs middle and lower income families actually live in rent regulated apartments, but the coveted Manhattan rent stabilized apartments are in some of Manhattan's most sought-after buildings.
Many buildings that converted to coops or condos 25 years ago under non-evict plans sill have regulated tenants today that didn't buy as well as recent conversions such as the Apthorp. Many of the tenants occupying these apartments are upper middle class or wealthy, connected Manhattanites that were fortunate enough to get the apartments 25-30 years ago or inherited them or " have connections" including former mayors, congressman, celebrities, real estate brokers and friends of landlords.
Mayor Bloomberg does not live in Gracie Mansion, he's a billionaire and his own $48 million dollar townhouse is a nicer mansion than Gracie Mansion but when Ed Koch was Mayor he preferred his $300 rent stabilized Greenwich Village apartment over Gracie Mansion. It must be a nice apartment.
My first NY apartment was stabilized it was also in an upper west side townhouse owned by a couple but I gave it up when I bought a coop more than 20 years ago. I became a home owner while my income was less than half the income threshold for rent stabilized apartments.
Many of these tenants are holding out for huge payments from a developer or coop/condo board to vacate. Many rent regulated tenants have been offered $Millions for their apartments that they don't even own. Many own in The Hamptons and Florida defeating the purpose of affordable housing.
When I started in real estate and took floor duty, locals would come in the office and say "they were considering buying in the neighborhood but they're currently in a rent stabilized apartment so it would have to be "a really fabulous apartment and a really great deal". After showing apartments all over the Upper West side to these fortunate and privileged legal tenants, I learned the hard way they will never find a better deal than their rent regulated apartments.
Many of them never bought their own apartments when their buildings converted to coops and condos even though they were offered insider prices. To many regulated tenants their 50-60% below market rent was better than buying. Even though many of these apartments today are worth 3-5 times what they could have bought them for - why pay a mortgage and maintenance when your rent is lower than just the maintenance you would have to pay as an owner. As a rent regulated tenant the law provides you with more rights and priveledges than owners and shareholders that purchased in the same building.
According to the Wall Street Journal the Second Circuit Court of Appeals tossed out the couple's suit last March, but they filed petition for certiorari in the Supreme Court, and, the high court has asked New York City and the tenants to respond. Attorney's for New York City and the NY state Attorney General are preparing their arguments to fight the suit.
The Fifth Amendment to the Constitution provides that "no person shall be . . . depriv but they receive no sued of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Rent control is subsidized housing but not by the city state or federal government. It is subsidy mandated by the government that requires property owners to subsidize legally privledged tenant leases in their buildings. The property owner/landlord receives no subsidy or tax credit from the government.
Maybe the United States Supreme Court will end regulation or force the city and state to subsidize the owner/landlords.