Westchester group lobs its own constitutional challenge to New York’s rent law

A group of landlords from the affluent suburbs outside New York City has joined the growing list of challengers to the state’s new rent law.

A law firm representing Westchester’s Building and Realty Institute — a trade association that represents 300 landlords and managers of 17,000 rental units in Westchester County — filed a complaint in New York’s Southern District Tuesday that contends the law is arbitrary and irrational. The argument echoes that of a lawsuit filed in July by the Rent Stabilization Association and the Community Housing Improvement Program. This latest suit is the third in recent months challenging the constitutionality of the statute.

According to the complaint filed by the Building and Realty Institute’s general counsel, Westchester-based Finger and Finger principal Kenneth Finger, the rent law’s “web of restrictions overrides fundamental rights of property owners” and places unconstitutional burdens on those whose units would fall under the provisions.

The complaint names Homes and Community Renewal commissioner Ruth Visnauskas and the State of New York as defendants. Among the named plaintiffs is Lisa DeRosa’s Stepping Stones apartment complex. DeRosa’s family-owned property management company controls more than 400 units in White Plains. DeRosa recently told The Real Deal that small landlords like her firm were “dolphins swept up in the tuna net.”

Stepping Stones, a trio of nine-story apartment buildings, is across the street from Delfino Park — “dolphin” in Spanish.

The complaint contends that DeRosa’s firm has been “forced to offer renewal leases to stabilized tenants at rental rates far below market,” and as an example includes a detailed table of the below-market rents. The 240-unit Stepping Stones complex in White Plains, of which DeRosa is a principal, is a plaintiff. Rents at the complex range from 42 percent of market rate, or $1,025 for a two-bedroom unit, to 80 percent, or $1,390 for a one-bedroom.

Other plaintiffs are a 240-unit Ossining complex called Jefferson House Associates, DiLaRe Inc. and the Nilsen Management Company. The 98-page complaint also alleges that landlords named in the suit have little ability to “oust strangers” who, claiming succession rights, continue to occupy rent-regulated units.

The Building and Realty Institute has been trying to grow its suburban membership in the wake of the rent reform, which passed in June and had its greatest effect in New York City, which has roughly 1 million rent-stabilized apartments. But the group’s associate executive director, Jeff Hanley, has pointed out that the law also affects thousands of rent-stabilized units in Westchester, Rockland and Nassau counties.

According to a spokesperson for the Community Housing Improvement Program, there was no coordination with the Westchester property owners and there is no connection between CHIP’s suit and BRI’s. Finger did not return a request for comment on the lawsuit. HCR did not return a request for comment.