Wednesday, April 25, 2012

Supreme Court declines to hear NYC Rent Control Case

Harmon v. Kimmel will have to go down in history as actor Mark Harmon's headslap administered to talk show host Jimmy Kimmel last week on TV.  Because Harmon v. Kimmel will not turn out to be the most interesting property case to be heard in the U.S. Supreme Court's next Term.  The Court declined to grant the plaintiff's petition for certiorari this week, thus letting stand the Second Circuit's 3-0 affirmance of the district court's dismissal of the constitutional challenge to New York City's well-established rent control ordinance.  Here's a New York Times article on the Court's denial of cert yesterday.

Ordinarily this would not be big news--the Court only grants 1% of cert petitions--but this case was generating some buzz, particularly in libertarian circles; and when the Court requested NYC to file a response brief hopes were raised.  The Reason Foundation Reason Foundation produced a video about the case, for just one example.  It was also the subject of a George Will syndicated column in February.  The Cato Institute's Trevor Burns reacts to the cert denial here, and R.S. Radford, who authored an amicus brief for the Pacific Legal Foundation, has a statement as well.

At first glance, I had thought that while the plaintiffs had compelling facts (owners of a building where half the units were rent-controlled with a wide disparity between the units' rent), and while many if not most economists agree that rent control is generally counterproductive, I thought that the constitutional issue had been settled by the Court back in 1992 in Yee v. City of Escondido.  But Ilya Somin noted a potential distinction in his commentary on the case last month:

By contrast [to Yee], as Root describes, the New York City rent control law does not allow Harmon and other landlords to evict their tenants even if they do wish to use the property for something other than rental housing. Effectively, therefore, this is a government-imposed permanent physical occupation of property.

But that argument failed to carry the day, so it looks like rent control isn't going anywhere in NYC.  Public officials expressed their approval:

Gov. Andrew M. Cuomo told reporters on Monday that the court’s order was “good news for the state of New York” because “rent regulations are very important to the tenants.”

Christine C. Quinn, the City Council speaker, said she welcomed the decision. “Now,” she said in a statement, “the city’s rent regulation system can proceed unfettered, as we continue to ensure affordable housing is available to New Yorkers.”

By sheer coincidence, this news came out the night before I was going to teach the section on Affordable Housing to my Property class.  Because it was the final class session of the semester, the case didn't generate as much discussion as it otherwise might have, but at least it reinforced my mantra that property and land use issues are hip, current--nay, ripped from the headlines--and very important in society today.

As usual, SCOTUSblog has the best set of links for the case to all the lower court opinions, the parties' briefs, and the amici.  I'll have more to say about one of them in a follow-up post.

Matt Festa

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Professor Somin's statement was flat wrong as a matter of New York law. Owners can seek to recover rent stabilized apartments for their own use (Rent Stabilization Code Sec. 2524.4(a)). (Nonprofit owners can do the same (2524.4(b))). Private owners can seek to withdraw units from the rental market for use in connection with a business. 2524.5(a)(1).

Harmon argued, weakly, that these remedies were futile in his case, but the fact is that he never sought to use them. The case simply was not ripe for adjudication, as the Second Circuit found.

Posted by: Seth Miller | Apr 25, 2012 7:40:07 AM