PLF supports constitutional challenge to NYC’s destructive rent controls

WASHINGTON, D.C.; April 12, 2012: Tomorrow (Friday, April 13), the justices of the U.S. Supreme Court are scheduled to consider whether to accept Harmon v. Kimmel, a suit targeting New York City’s rent stabilization law as a violation of the Fifth Amendment ban on the uncompensated taking of private property. If the court votes to hear Harmon, an announcement could come on Monday.

As the nation’s leading legal watchdog organization for property rights — and a longtime litigator against rent regulations that deny owners control of their property and a free market return on investment — Pacific Legal Foundation has been strongly supportive of the New York challenge.

PLF Principal Attorney R. S. Radford authored PLF’s amicus brief urging the justices to hear Harmon. He issued this statement in support of the Harmon challenge:

R.S. Radford Principal Attorney

“New York City’s so-called rent stabilization rules are aggressively subversive of basic rights and rational public policy. Tenants in rent-stabilized units are allowed to stay for as many years as they like. They can even pass their units along to their heirs. For all intents and purposes, these units have been seized from the owners. The landlord isn’t just robbed of any say in who occupies the unit, but also of any freedom in pricing it. An arbitrary cap on rental rates ensures that they’re far below market.

“Instead of helping the poor or advancing any other legitimate policy goal, the city’s suffocating rent regulations deter construction of new apartments. And many tenants sheltered by rent control are wealthier than the landlords who they’re underpaying. In short, New York’s rent control is government-choreographed confiscation that cries out for Supreme Court review.”

The lawsuit was brought by 68-year-old James D. Harmon, who lives in a five-story brownstone that has been in the possession of his family for 63 years. He holds title, but his “ownership” is undermined by the fact that three of his six apartments are governed by the Rent Stabilization Law, meaning that the city has granted the tenants and their successors a permanent claim on the units. The three have already occupied their apartments for a cumulative period of 90 years. The government-set rates that they pay Mr. Harmon are 59 percent below market — and considerably below what the tenants (one of whom owns a home near the Long Island shore) could pay.

“Dating as far back as the World War II era, New York has always touted rent control as an ‘emergency’ response to housing shortages,” said PLF’s Radford. “But rent controls make things worse, not better. Squeezing landlords actually creates shortages by discouraging people from getting into the rental business. It’s as if the city’s firefighters showed up at a burning house with gasoline instead of water.”

About Pacific Legal Foundation
Donor-supported Pacific Legal Foundation (www.pacificlegal.org) is the leading legal watchdog that litigates for limited government and property rights, in courts across the country.

PLF just won its sixth precedent-setting victory for liberty and limited government at the U.S. Supreme Court — Sackett v. U.S. Environmental Protection Agency, in which we defeated EPA’s attempt to exempt itself from judicial review when it curtails the use of private property by labeling it as “wetlands.”