The Real Deal New York

Supreme Court declines to hear UWS rent stabilization case

April 23, 2012 12:00PM
By Katherine Clarke

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From left: James Harmon and 32 West 76th Street

[Updated at 3:30 p.m. with comment from Assembly Member Linda Rosenthal] [Updated at 12:30 p.m. with comment from Harmon] Despite an unexpectedly thorough review from the U.S. Supreme Court in recent months, the court has declined to hear the case of James Harmon, the Upper West Side landlord challenging rent stabilization laws, according to court papers filed today.

Harmon challenged the constitutionality of having him subsidize tenants to live in his own home at 32 West 76th Street. He previously said it’s unfair for him to subsidize his long-time tenants when they can afford to pay market rates. His three rent-stabilized tenants pay $1,000 monthly for their apartments, he said.

Though courts on all levels routinely upheld rent stabilization laws, and despite the fact that his own case has been dismissed by two state courts, Harmon, who is a former New York federal prosecutor and represented himself in the case, caught the attention of the U.S. Supreme Court in December, in his bid to fight the regulations, it was previously reported. But, despite the Supreme Court requesting the city file a response explaining the courts’ aforementioned dismissals, the case is now closed.

“The Harmon family is disappointed in the Supreme Court’s decision,” Harmon, whose brownstone is between Central Park West and Columbus Avenue, told The Real Deal in a statement. “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.”

He continued: “Because of rent stabilization, it will now continue to be difficult for us to keep our home of five generations.”

A supporter of Harmon’s fight, Sherwin Belkin, a founding partner of the law firm of Belkin Burden Wenig & Goldman, issued the following statement to The Real Deal:

“Belkin Burden Wenig & Goldman, on behalf of the Community Housing Improvement Program, had filed an amicus brief in support of the owners,” Belkin said. “Certainly we are disappointed that the Supreme Court has elected not to hear this case. We fully expect that members of the real estate industry will continue examining cases that present compelling constitutional claims.”

Another attorney, Terrence Oved, chairman of law firm Oved & Oved’s real estate department, who was not involved in the case, said he was somewhat surprised that the court had denied hearing the case despite expressing interest in it over the last few months.

“We thought the court was going to take this on,” he said. “These laws have been in New York City for 40 or 50 years and were drafted in response to an emergency housing situation.”

If the court had chosen to hear the case, it might have affected the rental market in the city, he said.

“In anticipation of a decision, a lot of landlords thinking of putting properties subject to rent stabilization on the market might have held them back,” he noted.

Assembly member Linda Rosenthal, who oversees Harmon’s district, released the following statement on the Supreme Court’s decision: “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. 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.”

The Supreme Court declined to comment on the decision.

  • Harlemite

    The demise of rent stabilization is inevitable because it’s unfair. The major problem with it is that it disporportionally helps those 65 and older (the richest generation in NYC) at the expense of the 20 somethings (the poorest generation). 20 somethings have more student debt than ever, they have new jobs with lower salaries, they’ve had very little time to get any savings etc. Yet, rent stabilization forces them to rent market rate apartments while the wealthy generation stays in their below market apartments.

    I think most 20 somethings are fine with a system where their neighbors have a discounted rent, but when their neighbor pays $1,000 and they pay $3,000 I think these 20 somethings reach a breaking point. As market rate rents skyrocket over the next 3 to 4 years you will see more an more market rate renters protest stabilization. cont.

  • Harlemite

    cont.
    The insistence that stabilized rents be frozen and complaints about a $50 annual increase being too much will continue to fall on deaf ears and, in fact, will only create more outrage by market rate renters whose rent just went up $300. Social media now will prevent the NY Times from controlling the debate. For years the Times has tried to frame the debate as the poor widow vs the rich and greedy landlord. But the market rate renters don’t see it that way and they will organize using social media. More and more they will see the issue as stabilized tenants vs market rate renters. And as the distain from market rate renters grows, politicians will take note and will begin to pander to them. Once politicians pander to market rate renters, stabilization is over – it implodes on itself without the courts.

    It behooves the stabilized tenants to raise their rents at a faster clip (and for NIMBYs to get out of the way and let more units be built). Renting a $3,000 apartment for $2,000 is sustainable – there won’t be much outrage at that. But renting a $3,000 apartment for $1,000 creates an environment that eventually will implode the entire system.

  • KaKaw

    if he converts the entire place to his own private residence, he can kick the tenants out after their leases are up. You just need to make sure to file the paperwork and document everything you do. There are procedures to do this. Just make it a home for your son/daughter as it needs to be immediate family. You need not live there yourself.

  • Harlemite

    KaKaw – that is not correct in this instance. I believe it’s two of the units in his building are occupied by people over 62. They are protected under the owner occupied eviction rules. (disabled people are also protected).
    Accordingly, Harmon is required to place his elderly tenants in a similar apartment in the same neighborhood for the same rent. An impossibility unless he buys an apartment nearby and rents it to them for a huge loss each month.

  • Perryro

    There is nothing wrong with rent stabilization. The rents are reset every year or 2year lease and have kept up with inflation. Obviosly the Supreme Court is ruling on the Laws legality.

  • MCC

    Rent Stabilization is a vestige of a by gone era, whose application has become on overwhelming burden on society that can no longer afford it. No shock that the SCOTUS declined to hear the case because the arguments have failed over and over again. Instead, someone really needs to challenge whether or not there actually is a “housing emergency” without which rent stabilization terminates by operation of law. How can there be a housing emergency when the city itself is warehousing units, denies building permits, and the so called emergency is based on data that is not current.

  • marcusito

    These types of laws exist in first world cities all over the world. It is just a fact of life. In Western Europe they are actually a lot more stringent. Almost all landlords in NYC at this point bought or inherited their properties since these laws came into force and got them a lot cheaper because of it. The fact that the laws loosened up a lot under Pataki is pure gravy for them.

  • Piedaterre

    According to StreetEasy, he’s been renting apartments for as much as $2650 per month, and he bought the entire building in 2005 for $1.5 million, albeit from a family member.

  • jkaye14

    Linda Rosenthal is an absolute joke. I wonder how she would feel if the state told her that her grandchildren were not allowed to live in her own home.

  • ManhattanBroker

    Supreme Court justices are a bunch of cowards for declining the case. Even they know the truth

  • runawayslavegirl

    Look deep within our trouble minds, and so if it is fair be very honest with yourself.

    what are you paying your staff, look at all the lowdown dirty things we do to get what we want and persecute the ones who is fair and honest.

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