US Supreme Court denies Clipper’s rent regulation petition
The REIT had filed the petition in October
Clipper Equity wasn’t one of the lucky 150.
The U.S. Supreme Court, which hears roughly 150 out of the 7,000 cases it is asked to review a year, has declined to hear Clipper Equity’s challenge to New York’s rent regulation rules.
The landlord filed a petition in October, asking the court to weigh in on whether a New York Court of Appeals decision represented “an uncompensated taking of [Clipper’s] property.” The court had ruled in favor of tenants, finding that apartments at two Clipper buildings should’ve remained rent regulated while the landlord was receiving a 421-g tax break.
“We’re not surprised, but we’re pleased,” attorney Robert Smith, who represented the tenants in the case, said of the court’s decision. Representatives for Clipper didn’t return calls seeking comment.
Back in June 2016, tenants at 50 Murray Street and 53 Park Place, along with residents of an Equity Residential property, filed a lawsuit against the the real estate investment trust, alleging that it illegally raised rents and deregulated units while receiving 421-g benefits. At the time, the REIT argued that it had the right to take units out of regulation once rents reached a certain threshold (a practice known as luxury decontrol). Clipper won an appeal against tenants in January 2018, but that decision was reversed in June 2019 by the state’s Court of Appeals, which found that the apartments should have remained rent-stabilized.
Clipper then filed a petition with the Supreme Court, arguing that the ruling violates the Fifth Amendment’s takings clause and the Fourteenth Amendment’s due-process clause.
The REIT, headed by David Bistricer, is also part of a coalition of landlords bankrolling a federal lawsuit challenging the constitutionality of the new rent stabilization law passed in June, which eliminated luxury decontrol among other changes. Since the measure’s enactment, there have been at least two other federal complaints filed challenging the law.