Supreme Court to Review Rent Control Laws

Oh look, here's something from the Wikipedia entry, ... from England and Wales. Good stuff.

^ For example in England and Wales the Law of Property Act 1925 s149(6) abolished leases for lives, and a lease expressed to be for a life is converted into a lease for 90 years, terminable on the death of the tenant.

>again, you are defending tenants rights in this case by defining this in terms of a relationship between 2 parties, and yet you don't respect the very basic principles of this relationship.

What do they do in Denmark? Any links you can provide?

yes, England has a peculiar history of relationships towards their "own" land, property, and tenants.

sour loser

What about in South Sudan? Anything relevant to NYC?

doesn't become you

Really? Your interest is kicking old people, who have lived in their places since 1971, out of their apartments for some false ideal of landlord's rights. Landlords who, if they've purchased their place any time since 1971, knew full well about this law in place.

right just like robocop. we covered this already, no one is kicking out old people. they are protected as a group. and the main issue here is not new York landlord's rights but how we as individuals and as a society define real property ownership rights.

>right just like robocop. we covered this already, no one is kicking out old people. they are protected as a group.

So this is about righting a wrong from 1971?

[wrong quotation selected]

>but how we as individuals and as a society define real property ownership rights.

So this is about righting a wrong from 1971?

for me personally? oh I don't give a shit. it's just interesting how people feel about this.

Lucille:

Leases to real property create property rights in real property, not personal property. Sorry. That's a legal question and the answer is quite clear.

From a finance perspective, however, leases are nearly identical to secured lending (mortgages/UCC loans). Finance guys spend a lot of time playing with the fact that lawyers (and the tax code, bankruptcy code and eviction rules) view owning with a secured loans as very different from renting, but financially they are interchangeable.

http://www.google.com/m?q=is+a+coop+real+property&client=ms-opera-mobile&channel=new

I was referring to your coop comment and it actually appears that we are both right. it is not real but personal property, but it seems to be treated like real property by the tax code.

http://www.nyc.gov/html/dof/html/business/business_rec_rptt.shtml

regardless of the legal status of coops, which are still purchased shares and fundumentally different from rent regulated temporary leases, I have a problem with your dismissal of maybe the most significant driver of progress and human cultural evolution - legal ownership of property.

Virtually all property is subject to government imposed property taxes .... Which look a lot like rent payments.

so you dismiss the very idea of ownership then? it's one thing to argue that renting is financially wiser at a particular perils of time, but what you are saying is something completely different.

PERIOD of time. damn kindle.

give the new interpretation of the law, I dont see how it can be argued that the owners of rent regulated properties are not being deprived of fair compensation.

Add a few more negatives marco. I had to read that three times to understand what side you are on.

Lucille: Corporate shares are personal property. That's why coop owners take UCC loans, secured by personal property rather than mortgages, against them.

However, shares don't create real property rights, such as the right of occupancy. If that isn't clear to you, I suggest taking buying a share or two of Goldman Sachs, heading downtown, and trying to use them as a legal title to occupy, or even enter, their offices. Coop owners own the corporation, but the only right they have to their unit is as tenants.

The coop owner's rights of occupancy come from the lease, which creates real property rights just like any other lease of real property.

I said nothing against property, which is an important tool, if not exactly "the most significant" driver of human culture. Fire, writing, farming and a few others probably beat it.

I only objected to the proposal made by several writers above that the Supreme Court or the NYS legislature expropriate, without compensation, the settled property rights of stabilized tenants and then turn over the stolen property to incumbent landlords. If you believe that it is acceptable to steal the rights of tenants and give them to others, then you should be willing to extend that principle to coop tenants as well. Sauces, goose, gander and so on.

Marco -- the RS law guarantees landlords fair compensation. The LL here wants what economists call "monopoly rents" -- compensation for something he did nothing to create that he can command because the law has granted him a monopoly on something that other people want or need. Nothing fair about that.

FG: their lease gives them the right to occupy the physical material representation of corporate shares they OWN. they OWN the right to occupy that home indefinitely, barring financial ruin. in contrast, the mutually agreed upon temporary nature of a renter lease is the foundation of the landlord/tenant relationship, it is the essence of it. are you seriously suggesting these are equal?

monopoly rent is not an economist term, but a Marxist one. and you got that definition wrong, too! monopoly rent refers to owners of LAND that produces a unique good, like a certain type of grape for wine. monopoly in the economic sense also doesn't apply because there are many different competing landlords. Lol not only are you kind of clueless as an economist, you're also a shitty Marxist!

that's mean, but come on, it's funny.

"monopoly rent is not an economist term, but a Marxist one"

Marx is considered an economist by basically every economist. Most econ programs I know of require at least some of his works as part of the introductory curriculum. Normally just so the professor can tear it apart, but still.

And "Monopoly Rent" is indeed a maintream economics term, to boot. It generally refers to legal monopolies, like patents and trademarks. THAT I learned in Econ 1 - I mean HIGH school Econ 1!

Now YOU seem laughable.

omg lol jason was that everything you hoped it would be?

http://www.google.com/m?client=ms-opera-mobile&channel=new&q=%22monopoly+rent%22

I freely admit to googling all the technical things you guys talk about. I went to art school, not business school. but even I knew the Marxist context of the term monopoly rent, lotsa rich kid class warriors in art school. when I google anything truly "mainstream economist" there are tons of references and definitions. not the case with monopoly rent. so until an actually smart finance persons here confirms this, I will just assume you don't know what you're talking about. it's been known to happen

Lucille -- nice theories, but wrong on all counts.

-Coop owners LEASE the right to occupy. No lease, no right to occupy. That's why coop owners have leases. They are TENANTS of the building's landlord, which is a corporation. The whole point of a corporation is that the shareholders do NOT own the "physical manifestation" and therefore are not responsible for the obligations it assumes or the injuries it causes.

But the point I was making was about tenants in general, whether coop leaseholders or not. You seem to think that there is something in property law that says it is ok to steal leaseholds but not freeholds, or that freeholders have no right to alienate occupancy rights. That's not US law.

Look at it this way: No one is forced to sell their home just because you think they aren't middle class enough, or someone thinks they are lazy, or the neighborhood has gotten better and a newcomer with more money would out bid them in an auction today. Tenants have exactly the same right during the term of their lease (or lives, for RC tenants, who do not have leases). And RS (and coop) tenants have the right to renew their lease on good behavior.

RS, RC and coop leases works just like any other property right: the property right holder has the right to keep the right even if other people want to bid on it.

--As for "economic rents" I suggest you google the term. You'll find it much more popular with right wing public choice theorists than Marxists. Harmon, who did nothing to create this apartment and paid nothing for it, wants to charge more than his marginal cost to provide housing services. That extra is what "economic rents" refers to.

Economists -- left and right wing alike -- agree that no one has a moral right to collect economic rents. On the contrary, if the market worked in real life the way it does in the simple economic models, consumers would always get the economic rents, since competition is supposed to drive prices down to marginal cost. Harmon, who isn't building anything, just wants to profit from the fact that the actual producers (builders and renovators) are not working fast enough to bring prices down to costs. He is trying to get the courts to give him economic rents that he couldn't get in an ideal market -- that makes him a "rent seeker", the key villain in public choice theories, or in the language of Rush and the Leninists, a "parasite".

--The theory behind RS is that it reproduces the results a competitive market would generate, by preventing Harmon from taking advantage of a market failure to charge more than his marginal cost and giving the tenant exactly what tenants would get in a fully efficient market: a price based on costs, not scarcity or local monopoly or the difficulties tenants have in moving.

RS doesn't apply to unsubsidized new construction to assure that the economic incentives of a functioning market still apply: if demand for apartments rises above supply, the price on new apartments will go up, which will give builders excess profits, which will induce more building, which will bring supply up to meet demand, which will bring prices back down to marginal cost where they should be.

RS doesn't work perfectly, but it works better than, for example, the coop/condo market, where prices have been above marginal costs for a decade. And unlike the mortgage/UCC market, which is heavily subsidized by the tax deduction, Federal guarantees, and government backstopping of banks, it works without subsidies and with quite a bit less regulatory staff than is necessary for "owners".

2 quick things, you specifically said monopoly rent not economic rent. and answer the question point blank. do you believe that a rental lease is the same thing as a co op lease. Yes or no. keeping in mind you yourself just wrote their landlord is a corporation........in which they own stock. I will read the rest later and respond point by point if you like.

Lucille - Yes, as far as I know, a coop lease is a lease, governed by exactly the same law as any other lease. Of course, when the tenants own the landlord, they are likely to negotiate somewhat different terms. It may be easier to trust the LL, for example, eliminating the common problem in rentals that tenants fear being overcharged for improvements.

On monopoly rent. Hm. You got me. I wrote monopoly rent because the economic rents here largely result from the landlord's local monopoly power: once a tenant has lived in an apartment for a while, there is no good substitute (unless the tenant is as mobile as Inonada). The standard general term is economic rents, although economic rents often result from monopolies and not just in Marxist theories.

lucille, how about this for government intrusion. It's actually happening today, vs. worrying about an action from 1971 that doesn't impact you one way or the other?:

http://www.usatoday.com/tech/news/story/2012-03-20/job-applicants-facebook/53665606/1

"Coop owners LEASE the right to occupy. No lease, no right to occupy. That's why coop owners have leases. They are TENANTS of the building's landlord, which is a corporation. The whole point of a corporation is that the shareholders do NOT own the "physical manifestation" and therefore are not responsible for the obligations it assumes or the injuries it causes. "

they lease the right to occupy the space which is a physical manifestation of the shares they own. the most obvious difference between this type of lease and a rental lease is that should the landlord in either situation wish to terminate at any time, the residential landlord owes his tenant nothing, whereas the corporation still has to somehow return tenant's shares. if you go back and reread my word, i never said they owned the apartment outright. i said they owned the right to occupy it until they are no longer able to maintain their responsibilities to the corporation, ie building.

"But the point I was making was about tenants in general, whether coop leaseholders or not. You seem to think that there is something in property law that says it is ok to steal leaseholds but not freeholds, or that freeholders have no right to alienate occupancy rights. That's not US law. "

can you please define both leasehold and freehold as you understand these terms. freeholder owns the parcel. leaseholder owns property rights to parcel for a specific period of time. it's in the definition! leasehold cannot be permanent! leased occupancy rights cannot be permanent without a stake in the ownership of parcel. because that doesnt make any sense.

"Look at it this way: No one is forced to sell their home just because you think they aren't middle class enough, or someone thinks they are lazy, or the neighborhood has gotten better and a newcomer with more money would out bid them in an auction today. Tenants have exactly the same right during the term of their lease (or lives, for RC tenants, who do not have leases). And RS (and coop) tenants have the right to renew their lease on good behavior. "

no, people cannot be forced to sell their home just because some prick wants it. THEY OWN IT. tenants DO have that same right during the duration of their lease. but their lease cannot be permanent, a lease, by definition, is limited. and while co op tenants do have to abide by the rules of their building, their continued residency is does not depend solely on what you call good behavior. the board can't just tell them to leave, they own a part of the corporation. i realize there are ways a board can force you to sell, but that's pretty rare. for the most part, they can't make you sell if you don't want to, and if you don't sell it's still your home.

"RS, RC and coop leases works just like any other property right: the property right holder has the right to keep the right even if other people want to bid on it. "

no, only the co op lease holder does. he owns a part of the corporation. others, in a fair world, would reach the end of their temporary-by-definition lease and return property rights to the party that does own it.

googled economic rents. now i know.

"Economists -- left and right wing alike -- agree that no one has a moral right to collect economic rents. On the contrary, if the market worked in real life the way it does in the simple economic models, consumers would always get the economic rents, since competition is supposed to drive prices down to marginal cost. Harmon, who isn't building anything, just wants to profit from the fact that the actual producers (builders and renovators) are not working fast enough to bring prices down to costs. He is trying to get the courts to give him economic rents that he couldn't get in an ideal market -- that makes him a "rent seeker", the key villain in public choice theories, or in the language of Rush and the Leninists, a "parasite". "

Harmon wants to profit from the fact that the "economists" you claim have a moral objection to profits from market anomalies in one or more capacities conceived, created, fueled, and promoted a real estate bubble of massive proportions, whether they understood this or not. i am fairly certain that any Leninist worth their salt would be more offended by the parasitic "economists" than Mr. Harmon. and i am actually not sure whom Rush is calling parasites these days. i think women who have sex? but not the men who have sex with them. idk. maybe no one told rush where babies come from.

ps. if the market worked irl as it does in simple economic models, most "economists" would find themselves unemployed.

"--The theory behind RS is that it reproduces the results a competitive market would generate, by preventing Harmon from taking advantage of a market failure to charge more than his marginal cost and giving the tenant exactly what tenants would get in a fully efficient market: a price based on costs, not scarcity or local monopoly or the difficulties tenants have in moving. "

let me ask you, how can a system that works against the actual competitive market reproduce results of the competitive market? Mr. Harmon is not taking advantage of market failure, he is taking advantage of the market, FINANCEGUY. i don't even know what market you are describing, where proces are based on costs. is ANYTHING priced based on cost anymore? i have difficulty moving. can you be a doll and come over and bring me that box of samoas on the counter? thanks, FG, you're a real pal.

"RS doesn't apply to unsubsidized new construction to assure that the economic incentives of a functioning market still apply: if demand for apartments rises above supply, the price on new apartments will go up, which will give builders excess profits, which will induce more building, which will bring supply up to meet demand, which will bring prices back down to marginal cost where they should be. "

what? the main driver of unnaturally growing re prices that are inconsistent with growth in local incomes has been financing, financeguy.

"RS doesn't work perfectly, but it works better than, for example, the coop/condo market, where prices have been above marginal costs for a decade. And unlike the mortgage/UCC market, which is heavily subsidized by the tax deduction, Federal guarantees, and government backstopping of banks, it works without subsidies and with quite a bit less regulatory staff than is necessary for "owners". "

yes, that's right, you can finance your purchase. rent is cash money that's due every month. that last sentence doesn't even make sense.

i think you're a free market guy who doesn't know it. the problem you have with the re market and really the way our economy works is the unfairness of manipulation driven by powerful interests. gues what the only real and effective solution to that is? i respectfully rest my case.

yeah, this is the part where i gloat about sitting out the social media madness. will YOU go get me those samoas?

"Harmon wants to profit from the fact that the "economists" you claim have a moral objection to profits from market anomalies in one or more capacities conceived, created, fueled, and promoted a real estate bubble of massive proportions, whether they understood this or not."

i left ouy a very important verb from that list. DENIED.

"Lucille - Yes, as far as I know, a coop lease is a lease, governed by exactly the same law as any other lease. Of course, when the tenants own the landlord, they are likely to negotiate somewhat different terms. It may be easier to trust the LL, for example, eliminating the common problem in rentals that tenants fear being overcharged for improvements. "

i would think the main diffrence between the 2 is one is a for profit entity while the other is a non profit. just a thought.

"On monopoly rent. Hm. You got me. I wrote monopoly rent because the economic rents here largely result from the landlord's local monopoly power: once a tenant has lived in an apartment for a while, there is no good substitute (unless the tenant is as mobile as Inonada). The standard general term is economic rents, although economic rents often result from monopolies and not just in Marxist theories."

no landlord has monopoly power in a city with block after block of stacked boxes people call home, where two thirds of the population rents. it is insane to suggest, and let alone believe, otherwise.
i think by "monopoly" you mean "basic need" and those are nowhere near eachother in definition.

Lucille, you wrote about 100 lines. Why not just hold you breath until you get your way?

Your economic and legal theoretical nonsense have no place in New York City. We aren't New Jersey, Cambridge Massachusetts, Santa Monica, or South Sudan.

And, this being New York, there should be no surprises. This law has been in place for decades. Anyone wanting out of the law wants out because they have an economic agenda. So ask yourself lucille, are you feeling lucky, punk? I mean, why do you lucille want to change what would solely benefit one interest group who is no more or less right than some other? Why this of all issues are you so enraged? You should be more focused on the fact that the Datsun brand is being revived.

Why not complain about taxi medallions?
How about NYS redistricting?
What about the fact that one of the U.S. Senators from NYS is entirely useless for our state?
How about that one of the most active NY City Councilmembers advocating the occupation of downtown Manhattan represents uptown Manhattan?

i hate when you're bitchy like this.

Bitchy?

bitchy

I think this is a matter or interpreting the law properly. Not about who it benefits.

That is true law will always be open to interpretation, and while this is the case people will take advantage of it.

Lucille:

Nothing in either the law or the "essence" of leases makes them terminable or non-renewable at the will of the landlord. It depends on the lease and the law.

Once the LL has entered into a lease, it no longer owns the rights it sold in the lease. In NYC since WWII, that means that a LL that voluntarily rents a unit subject to RC/RS has sold the right to possession during the term of the lease and any renewals (RS), or the subsequent statutory tenancy (RC). It's a free country -- you don't have to become or remain a RC/RS landlord. But in this, as all free markets, the law determines what you are and are not allowed to set as the terms of the deal. Harmon sold the right to possession and now he wants it back, for free, without the consent of the owner of that right. That's what we call "Indian giving" presumably because we felt free to renege on the deals we made in the Indian treaties; it's not a right that he should have in a free market.

--As for renewals, RS and coop leases, iirc, are written for a limited term with the right to renew. This is not unusual. Virtually all the land underneath London is owned by the Queen and a couple of Dukes -- who mostly rent it to the building owners on 99 year renewable leases. IIRC, the right to renew is statutory, with some provision for arbitration if the parties can't agree on a rent; presumably the statute was passed because building owners (tenants) feared exploitation if they improved the property in the last 30 years or so of the lease. Trinity Church and Columbia University have or had similar arrangements in NYC.

I don't know if the judges would allow a lease written to last forever, but some London landleases have 1000 year terms, which seems close enough.

In earlier periods, English law imprisoned rural tenants who failed to renew their leases...

--As for corporate law, no shareholder owns the "physical manifestation" of anything. That would defeat two of the primary purposes for which businesses incorporate: 1. to ensure that shareholders are not responsible if something goes wrong and the business owes a lot of money; if shareholders owned the business as in a partnership they'd be responsible for it, its debts, and torts resulting from its property. And 2. to ensure that individual investors have no right to take any corporate asset for themselves or force the corporation to divide property among the shareholders (partners can do that).

If you want to own the "physical manifestation" of your unit, you should buy fee simple or a condo without an encumbering lease. When you buy a coop, what you buy is the shares of a corporation that is barred by law from paying a dividend. That gives you nothing but the right to vote for the board. All the rest of your rights come as a tenant and are defined by the lease. That's why your lawyer will insist that you not buy the shares until the board approves you as a tenant.

Sometimes the rights are separated: Most coops allow their shares to be inherited, but not the lease. (The law allows corporations to restrict transfer of stock in their articles, and allows leases to be written as transferable or not). So the heir has no right to become the tenant unless the board approves her/him. If it doesn't, the heir has shares but no apartment.

--Of course I believe in free markets. I just don't believe in changing property law to expropriate one group in favor of another for the sole purpose of redistributing income upward or to politically or judicially favored interest groups. We change property law all the time. But we shouldn't upset settled expectations simply in order to increase inequality and inequity or in the cause of greater harm to the greater number.

-- Monopoly power need not be absolute. Read any of the rent/buy threads. One "buy" argument invariably is that once a renter is settled in, the LL will raise the rent above what it could charge a newcomer. That's monopoly power. The LL can't do it to Inonada, because he'll pick up and move. But families, especially affluent, large, packrat families, find that hard. So do people who customize their space or become accustomed to it, including virtually all children. Add a low vacancy rate, which means that at the moment when you actually need to find an apartment, competition is actually quite limited, and monopoly power is likely to be quite large. As you correctly point out, real world markets rarely work like the intro econ models, and this one certainly does not.

RS was meant to solve those market failures.

And, yes, you are correct that it is less subject to finance-related distortions than the badly regulated, heavily subsidized, owner-occupied market.

(I'm confused about what lesson you mean for me to draw from the bubble, however. Bubbles are inherent properties of capital markets, which are inherently unstable (google Minsky); bubbles and panics appear in even the simplest computer models of markets (google "Santa Fe Institute Sugarscape"). Markets only function "freely" and usefully when surrounded by massive regulation to prevent cheating and, especially, to stop those with more economic power from using their power to seize still more power, as Harmon wishes to do.)

"That's what we call "Indian giving"

Ironic that someone advocating for people's right to remain in their homes would use such an offensive term.

sure, I can do some google homework. let's just hope I won't have to explain this Minsky guy's work to you later. it's a guy, right?

Although there are only 40,000 units under rent control (RC), there are about 1 million under rent stabilization (RS). RC units go to RS when they leave RC. Assuming 3% rent increases, if a unit starts RS at $1000/mo, it would take 26 yrs to reach $2000. If it starts RS at $1500/mo, it would take 11 yrs to reach $2000. After $2000, it would be decontrolled, but only if hhi is > $175k. As you can see, RC/RS has a huge impact on the NYC market.

Lol thread killer. way to miss the point with your logic and facts!

RS and RC give landlords rent increases based on a very high percentage of the costs of any "improvements" which are defined to include simply replacing obsolete and worn out parts. And there is virtually no way to catch landlords who lie about the cost of improvements, so many of them are receiving far more than even the statutory rate of return. With an MCI in place, RC tenants can be given 15% per year increases on top of the regular increase. http://www.housingnyc.com/html/resources/dhcr/dhcr24.html

Also, under RC, landlords are entitled to have a Maximum Base Rent set that gives them a fair return on capital value; if rents are below that number, they are entitled to 7.5% annual increases until it reaches it. http://www.housingnyc.com/html/resources/dhcr/dhcr22.html. MBR is easily manipulated: for one thing, MCIs increase MBR, so just keeping the facade and furnace repaired should keep it moving up. For another, MBR is based on property value, so if you sell the property for an excessive price, the new buyer is entitled to a higher MBR: two landlords trading buildings should be able to generate pretty much any MBR they want.

In short, the only LLs who are getting 3% increases are ones who want handouts for nothing and aren't maintaining their buildings. Any landlord that has not gotten the MBR on a RC apartment up to decontrol levels, with collectible rents rising at 7.5% or 23% per year, just isn't trying very hard.

@ReMom

The current allowable increases for RS apartments are 3.75% for 1-yr. leases and 7.25% for 2-yr. leases. Also, the statute that allows for high-rent/high-income deregulation now requires that the apartment has a legal regulated rent of $2,500, or more, per month AND that
the apartment is occupied by persons whose total annual household income exceeds $200,000 in each of the two preceding calendar years

This topic remains silly and the outrage false.

How about Florida's Stand Your Ground law in light of the recent shooting?

New York Landlord Moves to Upend Rent-Stabilization Law at Court
2012-04-22 23:00:00.2 GMT

By Greg Stohr and Henry Goldman
April 23 (Bloomberg) -- James Harmon is so upset about New York rent laws that allow some tenants in the Upper West Side brownstone he owns to pay about 60 percent less than market prices that he’s making a federal case out of it.
Harmon and his wife, Jeanne, are asking the U.S. Supreme Court to overturn those rent limits, and as early as today the high court will say whether it will take up their challenge.
The Harmons are targeting a 43-year-old state statute that has become part of New York’s fabric, shaping its neighborhoods along with the wallets and lifestyles of millions of city residents. The law covers almost half the city’s 2.2 million rental units, drawing the ire of property owners who say it violates their freedom to get what the market will bear.
“The Constitution gives us the right to decide who will live in our own home and under what terms,” said Harmon, 68.
Supporters say the rent-stabilization law protects tenants from what otherwise would be among the highest prices in the country, out of reach for many New Yorkers.
Rent-stabilized apartments have become the stuff of both lore and scandal in New York. Former Mayor Ed Koch lived in one for years. So have celebrities from Cyndi Lauper to Carly Simon, according to the New York Times. Representative Charles Rangel, a Democrat and the former chairman of the tax-writing House Ways and Means Committee, was fined $23,000 last month for using a rent-stabilized apartment in Harlem as a campaign office.

Ordinary People

Yet the median income for those in the 987,000 rent- stabilized households last year was just $37,000, according to the city’s most recent housing and vacancy survey, released in February. And only 4 percent of households in rent-stabilized units had incomes of $150,000 or more in 2010, according to the U.S. Census Bureau.
“We would have Dickensian conditions,” said Allison Tupper, 72, a retired school teacher. She pays $2,233 a month for a four-room, first-floor apartment with access to a small garden on West 46th Street in Manhattan, in the once rough-and- tumble neighborhood known as Hell’s Kitchen that’s now rapidly gentrifying. “People would be living in the streets.”
Tupper takes in a combined $3,700 a month from Social Security and her teacher’s pension. She said one-room studios in her seven-unit building can go for as much as $3,000 a month.
The median monthly rent for unregulated apartments citywide was $1,369 in 2011; for rent-stabilized units it was $1,050, the city survey showed. Yet in Manhattan, average rents hit a record
$3,418 in March, Citi Habitats, a brokerage firm, said in a report this month.

‘Worst Chaos’

Gladys Puglla earns $38,000 a year as a bill processor in the city’s Administration for Children’s Services and pays
$1,138 a month for a three-bedroom apartment in the Bushwick section of Brooklyn. A similar unit in the area could go for $1,400, said Heather Glassberg of MCR Realty in Brooklyn.
“We have a lot of low- and middle-income families that live under rent control, and if they take it away, there’s going to be the worst chaos,” said Puggla, 48. “I’m already housing my family, and I will have to put them in one room and rent out the other.”
New York’s history of rent regulation goes back to 1920, when a post-World War I housing shortage prompted the state to enact temporary rules, upheld two years later by the Supreme Court. The federal government imposed emergency controls during World War II as part of a nationwide push to prevent rents from soaring in cities central to the war effort.
The current system dates to 1969 when the state responded to rising rents and falling vacancy rates by enacting the Rent Stabilization Law, which now governs almost all the city’s rent- limited apartments, including those of the Harmons.

Few Vacancies

Under the law, cities may limit rents if their vacancy rates are less than 5 percent -- a test New York easily meets.
Its vacancy rate in 2011 was 3.12 percent, the city survey showed.
The system limits annual rent increases to a percentage set by the Rent Guidelines Board -- 3.75 percent for a one-year lease in the most recent adjustment. About 40,000 units are still covered under the older rent-control regime, which ties increases to a landlord’s operating costs.
Landlords may begin charging market rates only under limited circumstances, as when a vacant unit reaches $2,500 a month. For occupied apartments, the rent must hit that threshold and the household income of the tenants must be at least $200,000 for two consecutive years.
The law gives tenants rights to remain in an apartment or pass it on to a family member.

Harmon’s Brownstone

The Harmon family has owned the West 76th Street brownstone since 1949, when James’s grandparents bought it with a $22,000 mortgage, according to court documents. James and his brother inherited the building in 1994, and James bought out his sibling’s interest in 2005 for $1.5 million.
The Harmons live on the first floor. The three upper floors each have two units -- one rent-stabilized, one market-rate. The tenants in the low-rent apartments have all lived there since at least 1982. One owns a home in the Hamptons, purchased for $320,000 in 2001, according to the Harmons’ 2008 complaint.
James Harmon, a lawyer who is representing himself in the case, says he began contemplating legal action after reading a 2000 New York Times story about his building. The story -- “30- Year-Old With a Lease on Real Estate Karma” -- quoted the tenant saying the $1,190 monthly rent was “practically free.”

Unconstitutional ‘Taking’

The Harmons contend the rent-stabilization law is an unconstitutional “taking” of private property without compensation. They say that previous Supreme Court decisions allow rent-control laws only for emergency situations and that New York’s decades-old system has effectively become permanent.
A New York-based federal appeals court threw out the Harmon suit on a 3-0 vote, rejecting their contention that the law was akin to a physical occupation of their property.
“This simple case challenges the power of the city and state of New York to impose on the Harmons the unconstitutional burden of involuntarily and permanently renting a part of their residence to tenant-strangers,” the couple argued in their appeal.
Tim Collins, a real estate lawyer and former executive director of the Rent Guidelines Board, said that even with rent regulations, landlords have benefited from government housing policies.
“If anyone got a big windfall from government intervention, it was the Harmon family,” said Collins. “Over the past half-century, the city’s restrictive zoning, landmarks and fire regulations helped suppress housing supply, which greatly increased the value of apartment buildings.”

Long-Shot Odds

New York City and state are both urging the Supreme Court to reject Harmon’s appeal without a hearing -- something the court does in 99 percent of its cases.
Previous Supreme Court decisions say that judges “should not sit as super-legislatures reviewing matters of economic policy, but should ask only whether a legislature’s policy judgments are rational,” New York Attorney State General Eric Schneiderman argued in court papers.
The high court signaled interest in the case in December, when it asked the city and state to respond to the Harmons’ bid for review. Even so, the Supreme Court’s history with rent control suggests the odds may be against the New York couple. In 1992, the court unanimously upheld a California city ordinance regulating rents in mobile-home parks.
The justices were unanimous again in 2005 when they backed Hawaii’s limits on the rent that oil companies can charge gas- station dealers. Writing for the court, Justice Sandra Day O’Connor said judges generally shouldn’t second-guess lawmakers about the efficacy of economic regulations.
Should the court take up this case and strike down the law, more than a few New Yorkers will find themselves on the move.
“I try not to think about it,” said Tupper, the Hell’s Kitchen resident. “Maybe I’m in denial. But rationally I know this court could do anything.”

By Greg Stohr and Henry Goldman
April 23 (Bloomberg) -- The U.S. Supreme Court rejected a challenge to New York City’s decades-old rent-stabilization system, leaving intact rules capping prices on almost a million units in one of the country’s most expensive cities.

http://www.nytimes.com/2012/04/24/us/supreme-court-declines-to-hear-rent-control-challenge.html

Posts are using stabilized and rent control synonomisly. Is the supreme court looking at both or strictly rent control.

Since they declined to take the case, they're looking at neither.

Oops... Didn't check spelling before I sent that off..hope my mom isn't reading

Were you surprised that the Supreme Court declined to hear this case?

There needs to be more light shed on this ongoing problem in New York city. With property prices and rental prices soaring, the last thing we need is more people making use of the system to pay less on rent. This is absolutely unfair to those who pay at market rate. The law is wrong at times, and it is the right of the people to challenge it.

Mariov - http://www.starrausten.com

"RS, RC and coop leases works just like any other property right: the property right holder has the right to keep the right even if other people want to bid on it."

If the RS/RC has this "right"... it means the owner DOESN'T HAVE THE RIGHT. We are taking away rights from one class and handing to another... without any real justification.

>If the RS/RC has this "right"... it means the owner DOESN'T HAVE THE RIGHT.
Correct

>We are taking away rights from one class and handing to another
No, this is nothing new by any stretch.
Interesting you put it in terms of class though.

>without any real justification.
Really, this was all just made up and persisted for more than half a millennia?

difference is folks running around talking about renter "rights"

do old ladies have the right to $1 movies and 10 cent bagels?

why not? prices have jumped and they cant afford them.

the portuguese seem to think overhauling rent regulation laws is a good idea, and rental stock accounts for only 20% of all housing there.

http://news.yahoo.com/analysis-portugal-rent-reform-aims-save-builders-collapse-095814464--business.html

holy crap it takes 18 months to evict a non paying tenant in protugal. hey, say what you want about new york's housing laws, at least we're not portugal.

Glad we are setting our sights so high.

"we might not treat women or gays well, but at least we're not Saudi Arabia"

http://www.flickr.com/photos/tychay/3304711150/

>do old ladies have the right to $1 movies and 10 cent bagels?

Senior citizen discounts.

But certainly I can appreciate the comparison between an apartment and a bagel. I guess there's room in the hole in the bagel.

> Senior citizen discounts.

Where are the $1 movies in Manhattan? And senior citizens have "rights" to discounts?

If the movie theater is going bust because it is filled with $1 patrons, it doesn't have the right to raise prices?

>If the movie theater is going bust because it is filled with $1 patrons, it doesn't have the right to raise prices?

So your campaign is pro-landlord, anti-senior citizen. Nice

Old people have very powerful lobbies influencing washington on their behalf. Sweet little granny is not at somewhereelse's mercy. No matter how much he wants her bagel.

granny doesn't need to influence Washington. No judge challenges granny. Even if the legislature challenges granny, the judge won't challenge granny. Granny is in charge. Eat your bagel.

> So your campaign is pro-landlord, anti-senior citizen. Nice

No, the campaign is for property rights.

Property rights? So you are an owner?

I own property... just not an apartment.

what do you own? parking spot or a condo in miami?

Isn't it obvious? He owns a bagel.

Many bagels. They come in bulk.