Tenant advocates aim to join lawsuit challenging rent regulations

Tenant advocacy groups are looking to join a lawsuit that challenges the rent stabilization system. Photo Credit: Linda Rosier

Tenant advocacy groups filed paperwork last week seeking to intervene in a landlord-brought suit challenging the state’s rent stabilization laws.

In a letter to U.S. District Judge Margo Brodi, lawyers for Tenants & Neighbors and Community Voices Heard said thousands of rent stabilized renters stand to lose their homes if the Rent Stabilization Association, the Community Housing Improvement Program and individual owners prevail in nullifying laws that have limited rent increases since 1968.

"Their members, as rent-stabilized tenants facing potential loss of their homes, are also uniquely positioned, and motivated, to assist in the just and equitable adjudication of these issues," the letter, filed on Friday, noted.

Reiterating arguments made by the city and state, Tenants & Neighbors and Community Voices Heard noted the owners’ complaint did not include any allegation that a plaintiff or a member of the industry trade groups involved had lost a specific sum due to the application of the rent stabilization laws. Landlords purchased property with the knowledge it was subject to the laws, and decades of precedent shows the limitations do not amount to an unconstitutional "taking" of private property, according to the memo drafted by The Legal Aid Society, Legal Services NYC and Selendy & Gay PLLC, which are representing the tenant groups.

The landlords filed a federal lawsuit in July, shortly after the state passed a handful of regulations strengthening the rent regulations system.

The owners pointed out the impact rent regulations have historically had on their industry, arguing that they are compounded by the new rules. For example, owners have long been obligated to almost always renew leases and to honor succession rights when tenants who relocate pass off their agreement to relatives they have lived with. Landlords’ flexibility is now even more limited, given that recent amendments make it harder to turn over units, raise their rents and move apartments into the private market, the complaint said.

"The (Rent Stabilization Law) effectively denies property owners the right to possess and use their own property," their complaint said.

The filing highlights the case of Bryan Liff, who in March 2019 closed on a $2.1 million purchase in Harlem, with eight rent-stabilized studios. His family planned to combine four units into a home for themselves and collect rental income on the other four units. Liff sent notices of nonrenewal to the tenants and spent $25,000 preparing for the build out, the complaint said.

But weeks later, regulatory changes limited owners’ personal use to one regulated unit and Liff’s tenants threatened legal action if they were forced to vacate, the filing said. The document said the family would have been happy to sell the building and break even, but it believed their investment lost 20 to 25% of its value since the new rules passed.

The city, whose Rent Guidelines Board and other officials were named in the suit, and the state submitted filings indicating they planned to request that the complaint be dismissed. The tenant groups also stated they would make this move, if allowed to join the case.

The state noted in court papers that the bulk of the plaintiffs’ concerns relate to aspects of the rent-stabilization scheme that have been in effect for half a century, and challenges to such regulations must be made within three years of the rules’ passage. Prior legal challenges to rent stabilization have failed, the state said.

The city argued that the allegations, if true, do not rise to the level of constitutional violations.