Rent Spikes Denied

Supreme Court says “No” to Upper West Side landlord, keeping rent control intact

By Sean Creamer and Anam Baig

James Harmon’s brownstone (center) at 32 W. 76th St.

Earlier this week, the Supreme Court weighed a decision that could have meant the destruction of rent regulation in New York. The court decided on Monday morning, after several delays and requests for more information, not to hear a case brought by Upper West Side resident James Harmon against the state’s rent regulation laws. While supporters of Harmon’s fight grumble and regroup and advocates of rent regulation breathe a collective sigh of relief, many people have said that they were surprised that the challenge went this far in the first place, and that the fight to keep rent regulations in place is not likely to end any time soon.

City and state agencies charged with defending rent regulation reiterated the long-standing viability of the law, even as it is has faced legal challenges in the past.

“We are pleased that the Supreme Court will allow the existing court rulings dismissing this case to stand. Rent regulation in New York City has a long history, and the court properly left it to elected state and city officials to decide its future,” said Alan Krams, senior counsel of the Appeals Division, in a statement issued by the New York City Law Department.

While rent control is designed to enable people who cannot afford market-rate rents to stay at a comfortable level in the city, one disgruntled property owner decided that his tenants were taking advantage of this system. Harmon sued to overturn the regulations that he said amounted to the taking of his property, since he was not able to rent the units out at market rates.

The court declined to hear the case because of the fact that Harmon and his wife Jeanne were aware that the building was rent controlled when they inherited the property.

Harmon, an Upper West Side resident, inherited the five-story brownstone building on West 76th Street. At that time, he became the landlord of several tenants who were living in rent-controlled apartments. According to previous statements made by Harmon, he felt that these tenants were affluent citizens and did not belong in rent-controlled apartments.

“It’s pivotal that the Supreme Court even thought about taking it, said Sue Susman, the president of the Central Park Gardens Tenants’ Association. “For decades, the U.S. Supreme Court was in support of the regulation.”

Harmon had several avenues he could have taken to alleviate the situation, but he chose to go to court, Susman said. He could have filed a hardship increase application, where he could have showed the State Housing Agency his account books and had his tenants pay a higher percentage of regulated rent.

Harmon, an attorney, argued that under his Fifth Amendment rights, the fact that rent control even exists is an unconstitutional seizure of his personal property by the government. The court ruled that there was no “taking of property” and dismissed the case, but Harmon appealed, touting his 14th Amendment right to due process which he claims was denied him. The case was denied in both the Federal District Court and the Second Circuit Court of Appeals.

He pleaded to the courts that rent stabilization laws were denying him the ability to earn as much as he could from his apartments. He has to offer the rent-stabilized apartments at 59 percent below the regular market price to his tenants, is not able to choose his tenants and has no say over who inherits the apartments when their tenants die. Even when a beneficiary of the deceased takes over the property, they too are graced with below-market-rate rents.

Harmon’s lawsuit was against several parties who are in charge of rent control policies, including Jonathan Kimmel, the chair of the Rent Guidelines Board, and Darryl Towns, the commissioner of the New York State Homes and Community Renewal.

After the denial of both federal courts, the Harmons petitioned the U.S. Supreme Court for a writ of certiorari, which would allow the Harmons to appeal to the Supreme Court for a final decision in their case. The state and city each filed a brief defending the Rent Stabilization Law as constitutional, urging the Supreme Court not to grant the petition. With the decision on Monday, the case has finally reached its last stop.

“The Harmon family is disappointed in the Supreme Court’s decision,” Harmon said in an email. “We still believe that the Constitution does not allow the government to force us to take strangers into our home at our expense for life. Even our grandchildren have been barred from living with us. That is not our America.”

While Harmon was looking to free himself of his rent-stabilized tenants, his efforts snowballed into a movement with the aim of dismantling rent control policies in New York City. Real estate interest groups stood together to oppose a sanction that they believe impedes their rights, but most local politicians support rent regulation and fight to renew it every time it is set to expire.

“I am gratified that the United States Supreme Court has denied review of the Harmon case, which could have spelled the end of rent regulation in New York City,” Assembly Member Linda Rosenthal said in a statement. “This is a victory for millions of rent-regulated tenants throughout New York City who would not be able to afford to live in this city were it not for rent regulation.”