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Supreme Court Rejects Rent Regulation Case

Landlord Jim Harmon, who owns this brownstone at 32 W. 76th St., wanted the U.S. Supreme Court to rule on the constitutionality of rent stabilization laws, but the court declined to hear his case.
Landlord Jim Harmon, who owns this brownstone at 32 W. 76th St., wanted the U.S. Supreme Court to rule on the constitutionality of rent stabilization laws, but the court declined to hear his case.
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DNAinfo/Leslie Albrecht

UPPER WEST SIDE — An Upper West Side brownstone owner's quest to end rent regulation is over.

The U.S. Supreme Court said Monday it won't hear the case of property owner Rich Harmon, who sued the city over rent stabilization laws, claiming the restrictions are unconstitutional because they keep rents too low and deprive him of control of his property.

Harmon and his wife own a brownstone on West 76th Street, off Central Park West, that contains several rental units covered by the city's rent stabilization laws, according to the New York City Law Department.

Under the stabilization laws, rents on those units can only be raised in modest increments tightly controlled by the city's Rent Guidelines Board. Rent regulations also require Harmon to renew the leases on those units with the existing tenants or their family members. Three of the apartments have been occupied by the same tenants or their family members for more than 90 years in total, according to the Law Department.

Harmon told the Real Deal that the rent-stabilized tenants each pay $1,000 per month for their apartments.

Though rent stabilization laws are meant to protect vulnerable tenants who may not have the financial means to withstand substantial rent hikes, critics pointed out that one of Harmon's tenants pays such low rent that they can also afford to make mortgage payments on a house in Long Island.

Harmon argued that rent stabilization laws amounted to the government "taking" his property without compensating him for it. After two lower courts dismissed Harmon's case, he petitioned the U.S. Supreme Court for a decision, asking the court to declare the rent laws unconstitutional.

"We are pleased that the Supreme Court will allow the existing court rulings dismissing this case to stand," said New York City Law Department Senior Counsel Alan Krams in a statement. "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."

Harmon's case was about rent stabilization laws, which differ slightly from rent control laws, but if the Supreme Court had heard the case it is likely that rent control could have been affected by the court's decision, the New York City Law Department said in a statement on Monday.

"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," said State Assemblywoman Linda Rosenthal, who represents the Upper West Side, in a statement.  "While the Supreme Court has given worried rent-regulated tenants a reprieve, the fight to maintain the rapidly dwindling affordable housing stock is far from over."

About 1 million apartments, or 47 percent of the city's rental housing stock, are covered by rent stabilization laws, according to the Furman Center for Real Estate and Urban Policy.

Roughly 30,400 apartments on the Upper West Side are rent regulated units — which is roughly 43 percent of the neighborhood's rental units, according to the Furman Center.

Other Manhattan neighbhorhoods with high percentages of rent regulated apartments include Washington Heights/Inwood with more than 56,000 units (87 percent of its rentals); the Lower East Side/Chinatown with roughly 30,350 units (48 perent of its rentals); and the Upper East Side with 35,650 units (roughly 44 percent of its rentals).

The median income for Manhattan's rent regulated tenants is $49,200 a year compared to $100,000 for market rate tenants, the center said.