Supreme Court Decides At Least Some NYC Apartments Will Remain Affordable

For more than 40 years, finding a rent-stabilized apartment in New York City has been like winning the lottery. Earlier this morning, the U.S. Supreme Court shot down a challenge to the rent-stabilization regulations, meaning at least a million city residents will continue to pay rent that is only a fraction of what their neighbors pay

The challenge had been brought by lawyers for a Manhattan couple who claimed that their constitutional rights were being violated by rent-stabilization rules that capped the rents on three apartment units they rented out.

At $1,000/month, the tenants in those one-bedroom units are only paying half of what other renters in the same building are being charged.

“The Constitution gives us the right to decide who will live in our own home and under what terms,” one of the landlords said.

While some opponents of rent-stabilized apartments have said that landlords are being taken advantage of by tenants who can afford the market value for their rent but who are benefiting from an outdated regulation.

However, Bloomberg News reports that the median income for tenants in rent-stabilized pads was $37,000 in 2011, with only about 4% of those tenants earning $150,000 or more. Meanwhile, the average rent for an unregulated apartment in Manhattan is currently over the $3,000/month mark.

We do have to wonder if the city and census numbers on median income for rent-stabilized tenants includes all those people whose names are on the lease but who actually sublet for significantly more money than what they pay to the landlord.

The plaintiffs in the case had appealed to the Supreme Court after a federal appeals court panel in New York state issued a unanimous ruling to reject the lawsuit.

New York City Rent Limits Left Intact by Supreme Court [Bloomberg]

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  1. eldergias says:

    If it is illegal to charge above $X to rent an apartment, it should be illegal to charge above $X to sublet the apartment.

    • az123 says:

      In a lot cases it is not legal to sublet the apartments in the first place… if the lease holder is not living there it would go back to the open market

    • LorgSkyegon says:

      Rent control only applies to a your primary residence. It’s one reason Charlie Rangel got into trouble several years ago.

  2. umbriago says:

    Hey, I had to go look, but sure enough, Article XVI, Section 12: “The people are granted the right to decide who will live in their own homes and under what terms.”

    • TuxthePenguin says:

      Yep, its right there below Section 11 detailing our right to privacy.

    • huadpe says:

      The part in question is Amendment V, which states in relevant part “nor shall private property be taken for public use, without just compensation.”

      The owners were arguing that by preventing them from evicting tenants, or being able to charge market rate, the government had taken their property, and would have to compensate them for that taking.

    • GinChevyChase says:

      What’s there to not understand? Every American has the right to hang a pair of bear arms on their wall.

  3. Loias supports harsher punishments against corporations says:

    I think there needs to be an income check for tenants, and to ban subletting.

    • Tim says:

      Income check? So like … show us how much you make. Okay, we’re glad you make that amount. Do you mean a maximum income limit?

      And subletting is illegal in most cases in rent-controlled property.

      • sponica says:

        and there’s a difference between rent control and rent stabilization…my apartment building was rent stabilized but my apartment unit was not. and I think our lease prohibited subletting in principle, but as long as you informed the landlord of who was leaving and who was taking the space, he was fine with it.

      • damicatz says:

        It is perfectly reasonable for a landlord to want tenants who make at least a certain amount. Landlords want to know that any prospective tenants are going to be able to pay the rent.

  4. Conformist138 says:

    “”The Constitution gives us the right to decide who will live in our own home and under what terms,” one of the landlords said.”

    Oh, nice try. Economically, rent control is a bad idea, but that statement is bogus. If you are renting a complete unit to someone, it is not considered “your own home” anymore and no, the constitution does not give landlords the rights to dictate any and all terms and conditions for renters.

    • Prodigy220 says:

      In that case wouldn’t it be considered a business, and don’t businesses have the right to stipulate what goods they will sell, and how much they will sell them for? A business should have the right to deny service to anyone based on any reason they want, the free market will decide how to most efficiently place goods.

      • kujospam says:

        Except a state and city can change the rules for a business if it so desires, and in some cases the feds can. There are tons of laws for businesses that they have to follow.

      • Conformist138 says:

        Businesses are told all the time what they can and cannot do. For example, landlords are legally prohibited from discriminating based on race or gender. Renting a room inside your house where you are living is entirely different from a landlord renting a complete, private unit. There are rules for both, but they are different. Landlords cannot treat complete rental units as their own “homes”.

        That said, rent control has serious negative side effects, particularly when only part of the city is rent controlled- it inadvertently causes the rates of uncontrolled units to inflate more rapidly. It also limits landlord incentives to repair buildings or improve conditions, so highly controlled buildings are most likely to fall into disrepair or be purposefully left vacant. Rent control should be argued from an economic perspective. Arguing that “It’s my constitutional right to do whatever I want because I have an ignorant understanding of the word ‘freedom’” doesn’t work. Too many people assume any law they don’t like must be unconstitutional. Plenty of crappy laws are constitutional- they’re just bad ideas. The constitution doesn’t really have a way of filtering out all bad ideas.

        • damicatz says:

          The only thing that matters is that it is private property. There is no natural right to take over someone elses property or to dictate who they can and cannot rent to. Doing so is tantamount to theft.

    • Derigiberble says:

      I can’t believe anyone would advance such an argument with a straight face. Following it to the logical conclusion any tenant laws of any form are unconstitutional.

    • damicatz says:

      Freedom of Association.

      NAACP v. Alabama.

      • Conformist138 says:

        It’s a bit late, so maybe I’m tired and missing something… what does the state of Alabama demanding a list of members from the NAACP have to do with any of this?

  5. jrs45 says:

    What a disgusting ruling. Totally unfair to the landlords, as well as other potential tenants.

    • ajaxd says:

      There is no such thing as fair or unfair. It’s either legal or illegal (unconstitutional) – that’s what the court had to decide. Personal opinions and feelings of the judges are irrelevant.

      • dangermike says:

        You’re half right. The decision to make is one of constitutionality. However, very few decisions are unanimous. The differences are mostly due to differing premises on which each justices’ argument is based, and those are absolutely the personal beliefs, opinions, and biases of the people making the decision. This is why it is a panel of judges rather than a single one, why the judicial branch is separate from executive and legislative, and why the vetting process for each seat is so grueling.

      • jrs45 says:

        Of course there is such a thing as fair an unfair. In this case, the judge and the law is blatantly unfair, and unjust. The law is far from perfect, and the government should have no right to dictate what rent should be.

    • RvLeshrac says:

      Totally, fuck the poor, kick them out on their asses. Because THAT certainly won’t cause bigger problems than “Oh, I can’t screw people on the rent.”

      • El_Red says:

        1000$ per month? I don’t think the poor can afford it.

        Are those apartments government owned?

      • damicatz says:

        It is private property. Really and truly this should not be a difficult concept to grasp.

        Do they not teach that stealing is wrong in kindergarten anymore?

  6. aerodawg says:

    So how much below market value CAN the gov’t force you to rent your property out for before it’s considered a taking for the purposes of the 5th amendment? 1/2? 1/4? 1/10? Nothing at all?

    It certainly is sad that we couldn’t even get 4 SCOTUS justices who wanted to talk about the question….

    • Marlin says:

      This is not even a State issue, its a local city issue. The SC tries to use their limited time on larger issues.

      If this rule was so harted it would have been changed a long time ago. Instead it affects very few and does as it was intended.
      “median income for tenants in rent-stabilized pads was $37,000 in 2011″
      37k in NYC is not much of anything, esp after fed, state, AND local NYC city taxs.

      • aerodawg says:

        I’m sorry but IMO the gov’t taking from the citizenry without compensation is a pretty big issue. How many people it effects is absolutely immaterial. Where would we be if SCOTUS has punted in some of the landmark civil rights cases by saying “Oh well it just effects a few people and it’s a state and local issue anyway.”

        In essence, rent control takes from the landlord and gives to the tenant for some benefit to society as the state sees it. In most cases, that’s acceptable as long the state compensates the person for the taking. Imminent domain being used to take land for a school is a very good example.

        In this case, the landlords are having some amount of value taken from them essentially in perpetuity without any sort of compensation. Trying to argue that forcing them to rent at below market rates forever isn’t taking money from them is ludicrous.

        If the state feels it’s necessary to provide low income housing on the island of Manhattan, then they should subsidize it using tax dollars, a solution that has been ruled legally acceptable many times. But then again, I know exactly why they don’t do that it. If there are public subsidies the costs must be kept in the public budget and can’t be hidden away in book keeping losses to landlords…..

    • Derigiberble says:

      Um, try 0; as in it is entirely within the local jurisdiction’s power to completely ban particular forms of renting. For example NYC and many other cities have done just that with so-called vacation rentals.

      NYC has rent controls, and has for a long, long time. These landlords knew what they were getting into so there is no issue with taking.

      • aerodawg says:

        Totally different situation. In that case the gov’t is not forcing you to let anybody live there for free, they are saying you can’t rent it at all.

        Otherwise the property is still yours to effectively do with as you please which is not the case with rent controlled apartments…

        • Derigiberble says:

          No, it is the same situation because nobody is forcing these people to rent out the apartments they own. The housing laws allow the landlord to pull the apartment off of the market at the end of a lease term to live in or do what they desire with it (with the exception of re-renting it). This applies even if the apartment is rent-stabilized and thus would normally be subject to an automatic right of renewal.

          NYC and NY State are fully within their regulatory rights in stipulating that if you want to rent out a property you own you must follow these rules. If you don’t agree with those rules then don’t rent the apartment, simple as that. You are not constitutionally entitled to make a particular income off something.

          • damicatz says:

            Governments do not have rights. People have rights. Negative rights (as in, rights that oblige inaction versus fictitious positive rights which spell out entitlements). As in, the right not to have a bunch of leftist government tyrants come in and dictate how much you have to rent your private property for. Or who you have to rent it to.

            New York (both city and state) is a liberal zoo. It’s no wonder that it’s consistently ranked among the least free states by Mercatus (http://mercatus.org/freedom-50-states-2011).

          • aerodawg says:

            “You are not constitutionally entitled to make a particular income off something.”

            So in your view we have no property rights at all? Would you agree with the gov’t condeming your property for imminent domain purposes at a rate that was 1/10 the fair market value? If the answer is no, then why are you ok with the gov’t condeming the rental value of the property for the “public good?” As I see it, what you really want is for the cost of “affordable housing” to be carried by just a few individuals.

            As I said below, if the gov’t deems “affordable housing” necessary for the good of society, then they should subsidize it with tax dollards and have the cost openly carried by society. But the problem is that then the cost does become public instead of hidden away on the books of some landlord.

      • damicatz says:

        There is no moral or ethical justification for doing so.

        And yes, the government has that power in that they have the guns and that, like any criminal, if you do not comply with their demands, they will use those guns against you.

        Doesn’t make it any less reprehensible.

  7. Markitect says:

    Basic economics: Rent controls result in housing shortages. They also deprive the property owner of fair market value and are therefore unjust. But how is this supposed to be unconstitutional? The property was not taken. The solution is to get rent controls outlawed, which is unpopular with lower income voters who benefit from them. Yet another form of income redistribution.

    • bnceo says:

      Never understood rent control. Can’t afford to live there? Fine. Go move. Other parts of the country are cheaper to live in. You are NOT entitled to live in the big city.

      • jvanbrecht says:

        I don’t think you can get a rent controlled apartment anymore, those that are rent controlled, problably have the original renters name on paper (although how many times they have been sublet, or if the original renter is still even alive), and are grandfathered in, if they were to move out, the next tenant does not get the apartment at the rent controlled price, rather the fair market rate.

        • dreamking says:

          You can’t sublet a rent controlled apartment. You can however, have a family member move in for two years, and de facto their name is added to the lease.

    • castlecraver says:

      >>The solution is to get rent controls outlawed, which is unpopular with [the majority] who benefit from them. Yet another form of [democracy].

      FIFY.

  8. Coelacanth says:

    I think the author is confusing Rent-Controlled with Rent-Stabilized

    Many units are rent-stabilized in that rents can only be increased by a certain percentage year by year, until the monthly rent reaches/exceeds $2,000 at which point they become fully “market-rate”, if I recall correctly. I also seem to recall they’re not that difficult to find.

  9. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    In my area, we don’t have rent control or rent stabilization. With the influx of the gas industry, housing has become short, and many landlords are raising rents to take advantage of the gas worker’s deep pockets. So low income renters are being faced with increased rents they can’t afford, waiting lists for government and subsidized housing is months long, and now we’re starting to see more homelessness. I saw a room for rent for $1K per month.

    I can’t blame the landlords for wanting to make money, as they own the properties and they’re in business to make money, but when rents increase so drastically, it’s really tough on the people at the bottom of the income brackets.

  10. VashTS says:

    I am one of those guys who struggles to pay rent in NY. If you work full-time that should be enough to support a basic lifestyle, rent, food, utilities…but its not. I am constantly short on change, but I work, and work hard. My point being rent stabilization helps me. It’s still not enough, sadly.

    • Talmonis says:

      According to some “people”, you’re lazy and it’s your fault that you’re not rich. Isn’t that fun?

      • chocula78 says:

        According to Vash he is entitled to all basic needs because he works full time. No, you are not entitled to anything.

        If you are struggling with basic needs and you work full time, I think it’s time to change your situation to improve it. I’m not saying your lazy, but don’t complain if you continue to do the same thing over and over and expect a different result.

        Some choices Vash has: Improve his income or decrease his cost of living. Either is really not that difficult.

        • Talmonis says:

          Straight from the horse’s mouth folks. You don’t deserve to have your basic needs met after working 40 or more hours a week. Indeed, to make ends meet in a reasonable amount of time (far more actual work than the rich will ever do) you need to pay them MORE money and MORE years of your life, to buy a piece of paper that says you’re allowed to make more. Hell folks, at least there used to be laws that made these scum’s great grandparents feed and house their slaves. This is their new strategy, serfdom! Enjoy!

          Truly, these swine will not be happy until our cities look like the slums of India. Walled off from the rest of us, they’ll be able to mock us from above with impunity.

    • damicatz says:

      What have you done to try and increase your income? What have you done to try and get a raise?

      What have you done to further your career opportunities? Have you considered finding a roommate? Have you considered living in another city where the apartments are cheaper?

  11. dreamking says:

    This article is wrongly lumping rent-stabilized with rent-controlled apartments. Rent-stabilized apartments can still be over $2,000 in rent, but can only increase the rent in small, precise amounts each time a lease comes up. There is an exception for renovations/amenity improvements. Most of the million apartments this article is referring to are rent-stabilized. Each year, we lose about 1-2% of these to market-rate or demolition.

    Approximately 30-40,000 apartments are rent controlled. Each year, we also lose about a net 1-2% to demolition, rent-stabilization or market-rate. These are the ones stuck on the same incremental, tiny increases, but started from far lower amounts.

    The main problem with why rent is so expensive in NYC is because of the restrictions on building dense housing (seems crazy to say, but it’s true). Only about 60,000 housing units have gone up since the mid-90s, and almost all of it is luxury housing. Between the 60s and 90s, only about 60,000 new units went up (though these were evenly split between luxury and not-luxury). This is not a NET number. It’s not recorded how many housing units were destroyed during these two periods. Meanwhile the city only dropped to 9% below peak population during the troubles. We’re now back, exceeding 1950 peak population, and high rents have been an overwhelming issue since the end of the war. The only reason the rent-control laws still exist at all is because the laws define what constitutes a housing ‘crisis’ (under 5% occupancy rate). It is the longest-running ‘crisis’ in the country. Think about that: even during the worst of the 70s and 80s, the city never went above 3% occupancy. The city housing stock stands approximately at 1.3% occupancy.

    What we need are 275,000,000 square feet of housing dropped over 15 years. We need to bring back SROs in a way that is manageable. We need to buy Yonkers, or Hudson County NJ, or infill the coast along Brooklyn. We need to think big if there is ever to be an end to the city’s housing ‘crisis’. The situation pits large-scale landowners against small-scale ones, crushing New Yorker tenants and single-building owners in the middle. Small-scale owners want to overturn the rent-control laws because they suffer the most from them. Large-scale owners do not, as any release of the laws that would make any kind of short-term difference upsets their income expectation applecart. What we need to do is screw over these people’s vested interests if we’re going to retain a vibrant city of mixed classes. Mixed classes are part of the recipe for the long-term health of the city. The city will never be like it was in the 40s and early 50s (we’ll likely never need 4,000,000 semi-skilled industrial workers in one spot ever again), but likewise the city can’t survive on the finance industry. For all the problems Bloomberg has brought on himself, he understands this and has tried to change things around with the science campus, education reform and Silicon Alley promotions. (He still crapped out on mass transit and housing, though.)

  12. cornstalker says:

    So we’re now saying “rent-stabilized” instead of “rent-controlled?” Was this decided by the same committee that voted to start calling tax hikes “revenue increases?”

  13. damicatz says:

    Just who the hell do you think you are telling a private property owner what price they MUST rent their property out at? Do you own that property? No? Then it’s none of your business what price the landlord sets. You can choose not to rent from them. Really, it’s that simple.

    Like all government meddling, rent control does exactly the opposite of what it is supposed to do. No one wants to build property in a city run by tyrants that think they have the right to dictate how much you charge for rent, especially when there are plenty of cities that don’t do this. By discouraging development, an artificial scarcity is created which…..(wait for it)…. DRIVES PRICES UP. By reducing or eliminating profits, the landlords that haven’t been driven out of the city lack the necessary funds for maintenance or building improvements.

    You don’t like the price charged? Move on in your search. Buy property of your own. Move to a cheaper city. But you don’t have to right to use guns and other forms of violence (directly or via government proxy) to take over someone else’s property and force them to lower their rent because you think they are too expensive.

    • Talmonis says:

      Silly Republitarians, you keep screaming about “Rawr, gummint takes ma munny with guns!”. You don’t understand that these programs that keep the low income masses in homes with basic nessecities, are the only thing that keeps you safe from them. Angry, hungry, jobless and homeless masses? Sure, deal with all of them without that darn “gummint” intervention. Hell, for people that are purported to be well versed in history, none of you can correlate why the French bend over backwards for the poor. Here’s a hint: it’s because last time people were poor, hungry, homeless, jobless and angry in France, THEY CUT THE RICH’S HEADS OFF.

      • damicatz says:

        Yeah, because wanting people to respect private property rights is so totally like what the good king of France did. I mean, I can see how wanting control over your own property is like executing people without cause and stealing their stuff.

        The fact that someone is poor does not give them the right to steal someone else’s property or to use coercion and violence to force someone to give them something at a price they want.

    • cynner says:

      I don’t know what the law is in NY, but in San Francisco anything built after 1979 (the year the Rent Ordinance took effect) is exempt from rent control. All single-family homes and condos are exempt too.

  14. Warren - aka The Piddler on the Roof says:

    This may or may not be applicable to the article, but what the hell?

    I live in weird ole Portland, OR. We have arguably the best public transportation system in the country (some say, the entire galaxy). We have income restricted apartments downtown and it leaves me to ponder this: If someone who worked his/her ass off and went to college to get an education and a good job can ride the light rail to go to work downtown, why the f*ck can’t people with no education that earn less money do the same thing?

    Where is it written that those with a GED and three delinquent kids are entitled to live downtown? Is there a law on the books? I can totally understand affordable housing for the disabled and/or elderly who need to be close to hospitals and such for regular treatment, but it annoys me to no end when I find a great apartment at a great price and then discover I can’t live there because I make ‘too much money’ (which is laughable). How is that not discrimination against people who worked hard to get an education and decent-paying job?

    FYI, I’m writing this on my lunch break so keep the snark to yourself. ;-D

    • SheTastesLikesCigerecxh says:

      This. Why is that? Why do people who do not work and are otherwise not disabled need apartments in town?

  15. TinaBringMeTheAx says:

    One bedroom duplex one block from Central Park on the Upper West Side: Under $900.

    You bet I love rent stabilization!

  16. HogwartsProfessor says:

    I don’t know anything about renting in NYC, but I just wanted to say that picture is awesome.

  17. Cerne says:

    Contrary to the Consumerist headline this will actually continue to make finding affordable apartments in NYC incredibly hard. Also is it too much to ask that a consumer oriented blog believe in personal property rights?

  18. Libertas says:
  19. Talmonis says:

    This man has the most epic beard of all time. I love him.