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Letitia James praises 2nd Circuit decision on rent stabilization as victory for families

February 10, 2023 Brooklyn Eagle Staff
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On Monday, the U.S. Court of Appeals for the Second Circuit rejected constitutional challenges to the state’s rent stabilization laws, which drew praise from Attorney General Letitia James.

“Today’s decision is a victory for families that work day and night to keep a roof over their head,” Attorney General James said. “As we continue to address the nationwide housing crisis, we must spare no effort in protecting tenants and defending affordable housing options for New Yorkers. We will continue to defend the constitutionality of our laws and fight to ensure New Yorkers can afford to live in their homes and communities.”

The decision came following an amendment to the Housing Stability and Tenant Protection Act of 2019. The following September two challenges were immediately brought and a district court judge for the Eastern District of New York dismissed both challenges. That decision was appealed, and the Second Circuit finally upheld the lower court’s ruling on Monday.

The landlords who appealed the case contended that the amendment passed to the law in 2019 violated the takings clause of the Fifth Amendment and due process clause of the Fourteenth Amendment. Specifically, the law limited the landlords’ ability to raise rents attributed to major capital improvements and individual apartment improvements. The law also repealed vacancy decontrol and high-income decontrol.

According to the decision, there are approximately 946,000 rent stabilized apartments in New York City and 189,000 of those units are occupied by families living below the poverty line and 600,000 are occupied by families who qualify under HUD classifications as at least low-income.

The court held that the amended law did not violate the takings clause. States have the broad power to regulate housing conditions in general and the landlord-tenant relationship in particular, and there are several grounds for a landlord to terminate a lease.

The court also held that a due process challenge was not available to the landlords in the case as liberties protected by due process, “do not include economic liberties.” The court added that even if it allowed the due process challenge to move forward that it would still fail the rational-basis test.

“Here, the (amended rent stabilization law) was primarily enacted to permit low- and moderate-income people to reside in New York City when they otherwise could not afford to do so,” said the decision. “It is beyond dispute that neighborhood continuity and stability are valid bases for enacting a law.”

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