New York City's rent-control ordinance limits the rents of more than… (Mark Lennihan / Associated…)
WASHINGTON -- The Supreme Court on Monday rejected a constitutional challenge to New York City’s famed rent-control ordinance, a post-World War II housing measure that limits the rents of more than a million apartments.
The court’s action is a setback for property-rights activists, who had hoped a more conservative court would protect landlords and a free market in rentals. For decades, critics have said rent-control laws deny property owners the right to fully profit from their investment.
The justices, four of whom grew up in New York City, turned away an appeal from James and Jeanne Harmon, who own a five-story brownstone building on West 76th Street in Manhattan. The couple says they have no choice but to rent three apartments on the upper floors for less than half of their market value.
They also say that one of their tenants can pay a $1,500-a-month mortgage on a Long Island house because he pays only $951 a month to rent a unit in Harmon’s building.
In his appeal, James Harmon said the rent control law violated the 5th Amendment, which says “private property [shall not] be taken for public use without just compensation.”
"Contrary to the popular myth, the Rent Stabilization Law is not targeted to help the needy,” James Harmon wrote, representing himself in his appeal to the high court. "A person could make millions of dollars annually and still qualify for a rent-stabilized apartment. It is all about luck, a racket in which property owners and market rate tenants always lose.”
He also noted that the former chairman of the House Ways and Means Committee, Rep. Charles Rangel (D-N.Y.), had four rent-stabilized apartments in the city.
The rent-control ordinances were adopted as emergency housing measures after World War II. Harmon says the couple's building is also subject to the city’s historic preservation laws, so they cannot demolish it or change its character. Nor can they move out their long-time tenants, who pay below-market rates.
For decades, critics have urged the justices to strike down rent-control measures as unconstitutional, but they have refused.
In the 1920s, the court upheld city zoning laws as reasonable regulations of property, even though they could be costly to land owners. In the past, the court has said a “taking” of private property is usually limited to situations where the owner loses all use of his land.
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