Legal War Over NYC Rent Regulations

Wall Street Journal ^ | March 6, 2012 | Wall Street Journal staff

[nathanbedford]

What’s the difference between price controls on milk and price controls on rent? Do landlords in Manhattan and trailer-park owners near San Diego have the same rights? Is rent stabilization in New York City a foolish racket or a rational policy to help tenants?

The fate of New York City’s rent laws could hinge on answers to these questions. As the Journal reported Monday, the U.S. Supreme Court is taking a surprisingly serious look at a federal lawsuit in which a Manhattan couple is trying to overturn the regulations shielding their tenants.

[nathanbedford]

I am sure many FReepers join me in a visceral reaction to rent control. I find it repugnant to a Lockean respect for property which I hold fundamental to the rights of man.

I think the New York City rent control laws are organized theft of the landlords' incidents of ownership of real property by the city of behalf of the tenant. Politicians are often not very bright but they are smart enough to count and they have figured out that there are more tenants who vote than landlords.

We see the entitlement society oozing outward into every aspect of American life with the center of the virus located in Washington DC. Rent control is but one example of politicians buying votes by confiscating property and transferring it to voters

But let me ask a more difficult question. If we FReepers believe that a state has the power reserved by the federal Constitution to prohibit abortion or to prohibit buggery among consenting homosexual adults who act in the privacy in their own apartment bedrooms, why does the state not have the power to control the rent for the whole apartment?

[Dilbert San Diego]

I’ve heard that rent control severly hurt New York City real estate, and actually led to a decline in availability of apartments. I’ve heard that rents actually increased when new apartments come on the market.

I don’t know all the ins and outs, but I’ve heard that rent control “grandfathers” in long term tenants at a lower rent, while new tenants can be charged more. So in effect, longer term tenants get subsidized.

And, I’ve heard that New York has had thousands of abandoned apartment buildings, as landlords couldn’t raise the rent to pay their own operating costs of these buildings.

Rent control, as happens with other governmental controls, distorts the market.

[Sherman Logan]

To answer your final question, the 14th Amendment is usually considered to have brought state and local governments under the limitations imposed on government power in the Bill of Rights and other parts of the Constitution.

The original Founders would probably have agreed that states, and by extension cities, have such power. They were by no means libertarians. They were in favor of limitations on federal power as a means of protecting the governmental power of states, which prior to the Civil War implemented a great many laws we would find unconstitutional today. Including violations of freedom of speech, religion and press.

Whether the 14th was originally intended to bring states under constitutional limitations is a whole other question.

[cryptical]

If we FReepers believe that a state has the power reserved by the federal Constitution to prohibit abortion or to prohibit buggery among consenting homosexual adults who act in the privacy in their own apartment bedrooms, why does the state not have the power to control the rent for the whole apartment?

That's quite the assumption you're making. I'll grant abortion, maybe, although it appears that the Feds have taken that power away from the states. I'm not buying the states power to regulate private conduct between two consenting adults. Rent control is a taking from the property owner, and interferes in peoples right to contract.

[Navy Patriot]

Ya picked two poor examples, abortion is the the taking of human life without due process and representation for the human, and buggery is a public health matter for mortal communicable diseases.

[nathanbedford]

I agree in theory and in practice with every one of your observations and can conceive of no good reason to support rent control unless I were a politician running for reelection

[nathanbedford]

The federal Constitution does not require individuals to dispense due process before taking a life, it places that duty upon the state. Generally, it is not the state that performs the abortions but private citizen. So your argument is that there must be somewhere in the federal Constitution a requirement that compels a state of the union to prohibit abortion by a private citizen.

Is there?

As to communicable diseases being spread by buggery, are they not also spread by heterosexual intercourse? Does the state have the power to prohibit heterosexual intercourse because of the spread of STDs?

How does this fit into the federal Constitution?

I'm not raising these points to be cute or to be unduly contentious, but I do think it is important for us to understand the bases upon which we assert our conservative principles over the lives of others.

For the record, I am adamantly opposed to abortion and believe it should be outlawed. As to buggery, I would not vote in favor of a referendum permitting it but neither would I unleash the criminal law against acts committed by consenting adults in private.

[Red Badger]

Rent control creates slums.
That is the object.
Create situations where there are ‘victims’ that need politicians ‘help’.
The more ‘victims’, the more votes.
Renters outnumber landowners, so there are more voters that need ‘help’ than landowners......

[nathanbedford]

And, as I am in no doubt you are aware, it is not clear how much of our rights derived from the federal Constitution, especially the Bill of Rights, are incorporated against the states by virtue of the 14th amendment.

One thing I that we both can agree about without having previously discussed the matter, the drafters of the 14th amendment did not intend that the powers of the state would be limited by "emanations and penumbras" which only Supreme Court Justices could feel and see.

So far we have property rights, contract rights, due process rights, offered up by posters as reasons why the states are properly constitutionally prohibited from enacting rent control.

[Pearls Before Swine]

What’s the difference between price controls on milk and price controls on rent?

A matter of sign. Rent controls are price limits, which induce shortages; milk price controls are price supports, which cause higher than market prices and induce surpluses.

Rent controls are bad if you're a landlord but look "good" if you are a renter; milk price supports look good if you're a farmer, but you pay for them as a taxpayer and a milk consumer.

[Tanniker Smith]

No one builds apartment buildings anymore because they could become subject to rent regulations in the futre. Better to build condos/co-ops, sell them and be done with them.

[count-your-change]

Firstly, Dos the state, in fact, NOT have the power to regulate an economic activity such as renting out a living space?

[napscoordinator]

If they are able to drop rent control, it will end up a disaster. I know that sounds crazy, but if they rent those apartments for the price they should or could than all of those millions of “poor” people will be moving south and make states like North Carolina and Virginia even more purple. You have to give and take. Or am I not looking at this correctly.

[brityank]

To go along with what Red Badger said - ask your Rent Controlling politician to create a non-voidable Law establishing that Taxes will be collected under those same Rules.

I can hear it now — “WE can’t do THAT - that’s DIFFERENT !!”

[Buckeye McFrog]

If they are able to drop rent control, it will end up a disaster. I know that sounds crazy, but if they rent those apartments for the price they should or could than all of those millions of “poor” people will be moving south and make states like North Carolina and Virginia even more purple. You have to give and take. Or am I not looking at this correctly.

They will just riot where they are, and we will all end up providing them new housing at taxpayers expense.

[Londo Molari]

I like rent control in NYC — it keeps the scum in the city instead of oozing out into the suburbs (except the Poconos in PA).

[Navy Patriot]

Both state abortion and private abortion may be regulated by the state. Due process for state actions, and the right to life (Ninth Amendment) a civil right allows the state to regulate private citizens actions to conform to the law and due process.

The Constitution is purposed for (among other things) to "promote the general welfare" allowing restrictions on the liberties of infected individuals regardless of the orientation of their sexual contact. This is tested existing law.

[nathanbedford]

As you are aware, the answer to your question is self evident, of course the state has the power to regulate economic activity including renting out living space.

The question is when does that regulation run afoul of the Federal Constitution? Does the New York rent control law violate the federal Constitution and if it does, why? In other words what right, presumably of the landlord, found in the federal Constitution has been violated and has been applied to the states by the 14th amendment or otherwise?

[PapaBear3625]

I’ve heard that rent control severly hurt New York City real estate, and actually led to a decline in availability of apartments. I’ve heard that rents actually increased when new apartments come on the market. I don’t know all the ins and outs, but I’ve heard that rent control “grandfathers” in long term tenants at a lower rent, while new tenants can be charged more. So in effect, longer term tenants get subsidized.

Also, a long-term tenant with a big apartment can invite relatives to live there, and when the long-term tenant dies the relatives inherit the low-rent apartment.

I think rent-control is driven by the wealthy. Not because they live in rent-controlled apartments (although some do), but because if rent control suddenly ended, and landlords thus had an incentive to improve the apartments so as to be able to rent them to upscale tenants, then the market value of NYC condos would drop.

[nathanbedford]

This is tested existing law.

But it isn't.

It is not tested existing law that, "Both state abortion and private abortion may be regulated by the state. " In fact it's unconstitutional for the state to prohibit abortion, for example, in the first trimester.

Liberals often use the "general welfare" clause to expand the scope of their never ending regulation of other people's lives. It is a gross error of constitutional interpretation to invoke general welfare clause as a justification to expand the powers of Congress beyond the enumerated powers.

It may be lawful for a state to place restrictions on the liberties of infected individuals but that has absolutely nothing whatever to do with the state prohibiting buggery between consenting adults in private which is explicitly constitutionally protected by the Supreme Court in the Texas case.

None of the arguments you raise have been reported to have been mooted by the attorneys for the landlord who is trying to get the New York City rent control statue declared unconstitutional.