As New York City extended its participation in rent regulation recently for another three years, the U.S. Supreme Court is weighing whether to take on a case challenging its constitutionality. The court shouldn't wait any longer to determine whether an outdated law that forces a private landlord to continue renting to a particular tenant, and sets the amount of rent charged, violates the U.S. Constitution.
Rent regulation distorts what should be a free market. It results in less rental housing, as landlords shun the business. And it can lead to the deterioration of available housing. Landlords whose rental income is restricted by government fiat have less money and less incentive to invest to maintain or improve their buildings.
New York City's first rent regulation law was enacted after World War I as an emergency measure to mitigate a housing shortage. There are now about 1 million regulated apartments in the city. Today regulation is administered jointly with the state, and there is also some regulated housing in Nassau and Westchester counties. New York should have abandoned the concept long ago.
It hasn't, so landlord James Harmon Jr., wants the nation's top court to end what he insists amounts to a denial of due process and an unconstitutional, uncompensated government taking of his property.
Harmon inherited a five-story town house on Manhattan's Upper West Side in 1994. Half of its six apartments are rent-stabilized. One tenant pays $951.22 a month for a one-bedroom unit that should fetch about $2,600 on the open market. Adding insult to injury, one tenant reportedly owns a home in the Hamptons and so, apparently, isn't hurting financially. But that's largely irrelevant when it comes to New York's rent regulation.
The rent-stabilization law forces Harmon to continue renewing leases for his tenants at rents set by a government board. In some circumstances tenants can even pass the lease along to heirs.
In effect, it forces private landlords such as Harmon to subsidize their tenants' lifestyles. That makes a joke of the concept of private property and makes the region an even tougher place for renters to find affordable housing. That's just not right.