Wednesday, January 25, 2012
An overwhelming majority of economists agree that rent control laws are a horrible idea. But are they unconstitutional? It's possible we'll find out.
In 2005, James Harmon inherited a five-story brownstone in New York's Upper West Side. The property is subject to New York City's Rent Stabilization Law and the units currently rent at rates that are 59% below market. Harmon sued in federal court, claiming a taking under Fifth Amendment and a violation of his Due Process rights under the Fourteenth Amendment.
Both the district court and the Second Circuit quickly dismissed Harmon's claims. Uncowed, Harmon has appealed to the U.S. Supreme Court (here's the Cato Institute's amicus curiae brief). Will the Court hear the case? The only ray of hope - the Court recently requested that the opposition submit a brief on Harmon's petition (the city and state had waived their right to do so based on the strength of their victories in the lower courts). So, we can gather that there's at least one sympathetic Justice.