The Supreme Court on Tuesday turned down a major property-rights challenge to rent control laws in New York City and elsewhere that give tenants a right to stay for many years in an apartment with a below-market cost.
A group of New York landlords had sued, contending the combination of rent regulation and long-term occupancy violated the Constitution’s ban on the taking of private property for public use.
The justices had considered the appeal since late September. Only Justice Clarence Thomas issued a partial dissent.
Thomas said the “constitutionality of regimes like New York City’s is an important and pressing question,” but the landlords failed to show evidence they had been prevented “from evicting actual tenants for particular reasons.”
A ruling in the case could have directly affected 1 million apartments in New York City, and it may have had a significant impact in California as well.
The California Apartment Assn. had urged the justices to hear the New York case and said “many of its members are located in the local jurisdictions subject to rent control laws, including San Francisco, Los Angeles, San Jose, Oakland, Sacramento, Santa Monica, Berkeley, Pasadena, Alameda and Beverly Hills.”
Rent control has been upheld on the grounds it is a regulation of property, not a taking of it by the government. But the court’s conservative majority has shown a recent interest in bolstering property rights.
Two years ago, the Supreme Court struck down a California law that authorized union organizers to go on to farms and agriculture facilities to recruit new members for the farm workers union.
In a 6-3 ruling, Chief Justice John G. Roberts Jr. said the owners of private property have a “right to exclude” others. Citing that principle, the New York landlords said they should have a right to exclude renters after their lease has expired.
In January, the court heard a property rights challenge to developers fees that could have a broad impact in California.
George Sheetz sued El Dorado County near Sacramento after he was assessed a $23,000 fee for a permit to put a manufactured home on a lot he owned.
The county said the fees, set by legislation, paid for new and expanded roads in the area, and the California courts ruled for the county.
But the justices sounded closely split in Sheetz vs. County of El Dorado on whether these building permit fees amount to a taking of private property by the government.
In New York City, several owners of small and mid-sized apartments sued and alleged the new rent control laws have gone so far that “their property is no longer their own. New York has expropriated it,” they said.
They pointed to changes made in 2019 that make it harder to exclude tenants after their leases have expired, even if the owner wants to give the space to their own family members.
Where rent control was once defended as a temporary solution to severe housing shortage, they said the laws now “grant tenants a perpetual option to renew their leases, transforming term leases into government-mandated life estates.”
The New York cases are 74 Pinehurst LLC vs. New York and 335-7 LLC vs. City of New York.