By David M. Greenwald
Executive Editor
The Supreme Court declined to hear a challenge to New York’s rent control and tenant protection laws—a challenge that had implications for California’s tenant protection measures—including potentially proposed ordinances in Davis.
The petitioners in the Pinehurst v. New York are NY landlords who challenged New York City’s rent stabilization laws.
Among other things, they argue that “New York City’s regulations grant tenants and their successors an indefinite, infinitely renewable lease terminable only for reasons outside of the landlord’s control.”
Thus they argue that “they have suffered a per se taking as a result.”
The California Apartment Association and the San Francisco Apartment Association felt strongly enough that they submitted an amicus brief in support of the New York landlords.
“It’s disappointing that they’re not going to hear the case,” said Whitney Prout, executive vice president of legal affairs for the California Apartment Association, in response to the court’s decision not to hear the case.
In response, Justice Clarence Thomas called the constitutionality of such regimes “an important and pressing question.”
He noted, “The Second Circuit rejected petitioners’ takings claims at the pleading stage, but at least one other Court of Appeals has accepted similar claims.”
The problem he notes is with this specific case and he points the way to overcome that problem.
Thomas writes, “The petitioners’ complaints primarily contain generalized allegations about their circumstances and injuries. But, to evaluate their as-applied challenges, we must consider whether specific New York City regulations prevent petitioners from evicting actual tenants for particular reasons.”
He added that “petitioners’ facial challenges require a clear understanding of how New York City regulations coordinate to completely bar landlords from evicting tenants.”
He concludes, “The pleadings do not facilitate such an understanding. However, in an appropriate future case, we should grant certiorari to address this important question.”
Does he speak for others on the court and is the handwriting on the wall that this case did not represent a clear cut test of these issues? It’s hard to know. Even on this very conservative court, Thomas represents a bit of an outlier.
The Mercury News reported Tuesday that “California Apartment Association is currently bringing its own case against Alameda County in federal court, arguing that its eviction moratorium violated property owners’ rights.”
In their amicus, the California groups note, while the case deals with “New York’s draconian rent and eviction control laws,” that “many jurisdictions in California impose similarly severe restrictions on property-owners’ rights.”
They cite San Francisco’s which they argue has “one of the most stringent rent control regimes in the country, dating back decades. Tenants dominate the San Francisco electorate, and elected officials are well aware of this political reality.”
Nor is San Francisco alone, they add.
They cite other communities like Oakland, Los Angeles, Berkeley, Santa Monica, East Palo Alto, and West Hollywood.
The state of California has also passed more limited forms of rent and eviction controls, noting that in 2018 and 2020, votes rejected a ballot measure that would have repealed the Costa-Hawkins Rental Housing Act.
They warn, “It appears the voters will face yet another attempt to repeal the Act in 2024.”
The Takings Clause, they argue, “contains no exception for rental housing properties; they, too, cannot be taken without just compensation. But the standards currently being enforced by the Second Circuit (and other lower courts) means that local governments are increasingly free to deprive those owners of all of the key rights of ownership—to exclude, occupy, use, change the use of, and dispose of their property—so long as it is done incrementally.”
The issue, which has become more heated now as the rising cost of housing—particularly rental housing—is seen as necessary to protect renters from getting priced out of their homes, particularly in some of the most expensive rental markets in the country, many of which are in California.
The pushback, however, is that while these measures are helpful to tenants in the short, they lead to less construction of new housing which leads to more expensive housing in the long term.
The Justice for Renters Act qualified for the November 2024 ballot. It proposes to eliminate the California statewide ban on rent control and would give local governments the power to enact laws that could stabilize rents and prevent them from skyrocketing year after year.
It also aims to tackle a root cause of homelessness by making housing more accessible to those on the edge of becoming homeless.
The California Apartment Association believes this is an “attack” on the Costa-Hawkins Act. And critics are worried that the act could discourage the construction of new housing units, incentivize landlords to remove existing ones from the rental market and reduce the supply of available rental properties, and exacerbate California’s housing shortage.
Personally, I take the approach that we need to build both supply for both subsidized and market rate “affordable housing” but also take measures to protect people already in housing from getting priced out of their homes.
Rather than fighting rent control and tenant protections, I believe landlords should take measures to make these efforts less necessary—bringing rental growth and evictions under control.
While the Supreme Court decision not to take up this issue will push the inevitable confrontation down the road, the note by Justice Thomas shows that the handwriting may be on the wall at some point—and that could have disastrous consequences.
