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The Dead Hand Of Rent Control
Normally, the public takes little notice when the United States Supreme Court refuses to review a decision from the lower courts. That was, however, not the case in connection with 74 Pinehurst (2023), which allowed to stand the misnamed Housing Stability and Tenant Protection Act of 2019. The act was passed by the progressive forces in the New York State legislature to tighten the squeeze on landlords throughout New York City. Its key provisions all cut in one direction, which is to entrench and expand the city’s 1969 rent stabilization law (RSL), under which landlord rents are regulated as if they were public utilities whose rent increases are in the first instance pegged to state-determined increases in cost.
More specifically, the 2019 act reduces the freedom of landlords to evict tenants at the end of a lease or to impose rent increases both to cover costs and to capture the gain in market values of their properties. At one time, high-value rent control units were subject to “vacancy decontrol” when rents reached a certain level. In addition, the permissible level of rent control increases was sharply curtailed on those apartments that were renting, as many in New York City were, below the existing RSL cap, such that the current rent became the new rent cap, even for units whose rents were reduced during COVID, and the rent increases that once allowed for capital improvements were all sharply cut. There were no offsetting adjustments made in favor of the landlords. The price crunch was so palpable that even as early as October 2022, sixty thousand RSL units were empty, close to twofold the level of a year prior.