The BulleTin Board

Rent regulation in the spotlight

Compiled by Russell Steinberg

We the people

Dollars and cents

According to the Harmons petition, NYC landlords lose an estimated $2.6 billion annually due to rent regulation, which costs the city around $283 million in lost property taxes.

The fate of rent regulation in NYC could be hanging in the balance. Upper West Side landlords James and Jeanne Harmon filed a lawsuit arguing that the U.S. Supreme Court should strike it down as unconstitutional. The court could decide as early as April 16 whether it will hear the case.

Some 2.5 million people in NYC live in rent-regulated housing. A rent-stabilized tenant who lives in the Harmons brownstone at 32 West 76th Street pays only $951.22 a month for her apartment, while the market-rate unit next door rents for $2,650, according to court documents.

Harmon history

John Hylan

Gradual increase

A housing emergency

R e n t r eg u l at i o n b eg a n w i th th e E m erg e n c y R e n t Laws o f 1 9 2 0, wh e n NYC M ayor J o h n H ylan tr av e l e d to A lb a n y, u r g i n g th e a d o pt i o n o f r e n t b i l l s to a d d r e s s a severe housing s h ortag e . Th e n i n 1 9 4 3, r e n ts w e r e frozen across NYC. Supreme Court building Rent regulation has existed in som e form ev er since. (NYC Rent Guidelines Board)

In 1969, NYC mayor John Lindsay enacted the Rent Stabilization Law, which created the Rent Guidelines Board and charged it with establishing guidelines for rent increases. In 2011, the board authorized a 3.75 percent increase for one-year lease renewals, and a 7.25 percent increase for two-year leases. (NYC Rent Guidelines Board)

Nationwide impact?
The high court hasnt considered the constitutionality of rent-stabilization laws since the Pennsylvania Coal Co. v. Mahon case of 1922. If it hears the Harmon case and rules in the landlords favor, the decision could eventually lead to the elimination of rent regulation. (Commercial Observer)

Leaving the program

In 2010, around 17,000 city apartments left rent stabilization. One reason is income deregulation, which let apartments become destabilized when the rent rises above $2,500 per month, or household income rises above $200,000 annually. Also in 2010, about 12,000 units became rent stabilized, mainly because landlords hoped to receive tax benefits.

John Lindsay

32 West 76th Street

995 FIFTH AVENUE | The Residence

Full 16th Floor New 2012 Design Last Sponsor Sale No Board Approval 14 Rooms 7 Bedrooms Bathrooms 9.5 Bath 10 Ceilings 8,360+/- sq. ft. $30,000,000

22 April 2012 www.TheRealDeal.com