SCOTUS Will Soon Toss or Take Rent Stabilization Cases. Here’s What to Know.

The public will likely learn in October if challenges to rent stabilization—from landlords and trade groups including the Community Housing Improvement Program and Rent Stabilization Association—will proceed before the U.S. Supreme Court.

For Mike McKee, a longtime tenant activist, the last few years have been punctuated by semi-regular reminders that local landlords are vying for the U.S. Supreme Court to end rent stabilization as New Yorkers know it.

“There’s a well-known tenant leader who I won’t name who, once every two or three months, emails me and says, ‘What are we going to do about this?’” McKee, treasurer of Tenants PAC, told City Limits recently.

It feels like déjà vu. In 2008, Upper West Side man James Harmon filed a lawsuit challenging the constitutionality of New York’s Rent Stabilization Law (RSL), which limits rent increases and enshrines lease renewal rights across about half of the city’s apartments. In 2012, the justices declined to hear his case. Tenants exhaled.

Over a decade later, the court is more conservative, with a demonstrated indifference to precedent. The public will likely learn in October if more recent challenges—from landlords and trade groups including the Community Housing Improvement Program (CHIP) and Rent Stabilization Association (RSA)—will have the same fate. 

Landlords say recent and not-so-recent court decisions bolster their position that the RSL amounts to an unconstitutional taking of private property, as they struggle to cover the cost of operating housing. Particularly since RSL reforms in 2019 further limited their ability to raise rents and dictate the use of apartments between tenancies. 

Yet tenant advocates and attorneys are urging calm, saying historical court precedent has upheld rent stabilization, and landlords have failed to identify a legitimate legal conflict for the Supreme Court to resolve. 

“I have been telling tenants not to panic for four years now,” McKee wrote by email. “Obviously if the justices do accept [the case], we will have to cross that bridge.” 

In the meantime, City Limits breaks down the court timeline and legal arguments in play; the knowns, as well as the unknowns. 

How did we get here? 

Passed by the New York City Council in 1969, the RSL set the groundwork for rent stabilization at a time when housing costs were rising dramatically. Enforced at the state level through the Rent Stabilization Code, the protections apply to buildings constructed before 1974 with more than six units, as well as newer properties with state tax breaks. 

In June of 2019, tenants celebrated the passage of the Housing Stability and Tenant Protection Act (HSTPA), which, among other things, removed landlords’ ability to increase the rent on vacant apartments by 20 percent. 

Lawsuits were quick to follow—five in total, of varying scope, brought against the city and state by landlords and trade groups. Jay Martin, CHIP’s executive director, said his group case had been in the works since 2018, and that the HSTPA was “the final nail in the coffin.” But federal district judges dismissed all five suits, citing court precedent. 

Undeterred, all of the plaintiffs filed appeals. Lawyers for CHIP, RSA and a few individual landlords—the first group to sue—argued before the Second Circuit in Manhattan in 2021. But that court decided in February that the RSL is not a taking of private property, because landlords still have ways to evict tenants. 

CHIP and RSA immediately pledged to take their case higher. “We always expected these issues to be decided by the Supreme Court and are confident we will ultimately prevail,” they stated at the time. 

They filed their formal request—called a petition for a writ of certiorari, or cert petition—in May. Two other groups of landlords have petitioned since, led by 74 Pinehurst LLC and 335-7 LLC, respectively. It’s not yet clear which, if any, will be accepted. Though they differ in detail, all three challenge the right to a lease renewal.

What are the main legal arguments? 

In their petition, CHIP and RSA reference the Supreme Court’s June 2021 decision in a case called Cedar Point Nursery v. Hassid, which held that even brief occupations of private land—in that instance, union organizers holding meetings on a farm—were unconstitutional. 

The Second Circuit rejected this argument, distinguishing between landlords, who “voluntarily invited third parties to use their properties” by renting to tenants, and the farm owner in Cedar Point, who saw union organizers come onto private land uninvited. 

CHIP and RSA say the appeals court got it wrong, and that the regulations around tenancies are “much more substantial” than infrequent union meetings. 

But the city and state point to the 1992 Supreme Court decision in Yee v. City of Escondido, a case that involved eviction restrictions at a California mobile home park. Yee held that this type of regulation is not a taking, because tenants are invited onto private property by landlords.

The defendants are also making a technical argument, saying none of the landlords have established standing, or shown that they are the right parties to bring these claims—a prerequisite for a lawsuit to survive past the filing stage. 

Thomas Silverstein, of the Fair Housing and Community Development Project at the Lawyers’ Committee for Civil Rights Under Law, said that many subsequent court decisions defer to Yee—a unanimous opinion endorsed by Justice Clarence Thomas, a staunch conservative. 

Yet he acknowledged the unpredictability of the Supreme Court in recent years. One particularly dramatic example is Dobbs v. Jackson Women’s Health Organization, which overturned the constitutional right to have an abortion. 

“I think you have to take some heart in how frankly conservative a court it was when the City of Escondido case was decided,” Silverstein said. “That said, you just never know, and there has been an increased willingness to overturn precedent.” 

What’s the next step in the court process? 

At the end of the summer, the Supreme Court will return from recess and go over petitions that have piled up over the summer. Four ‘yes’ votes are needed to accept a case. The first order list is expected as soon as Oct. 2, and could include outcomes for any or all of the rent stabilization petitions. 

“It’s realistic it could be then,” Silverstein said. “It’s also possible it could be pushed a few times, because there’s often a backlog over the summer that takes a few conferences to clear.” 

He also emphasized the large volume of petitions made each year. “It’s a low bar to file a cert petition,” he said. “The vast majority of cert petitions are denied.” If so, it would be a dead end for the landlords’ cases.

What if SCOTUS accepts? 

If any of the landlords’ petitions are granted this fall, the decision could be as brief as one line in a lengthy case list. This would kick off months of legal filings, an eventual argument, and likely ruling some time next spring or early summer. 

If the standard procedure is set in motion, court watchers warned against speculating too much about the outcome. A final decision from the Supreme Court could portend litigation back at the district court level where the suits were originally filed. Depending on scope, this stage could be brief, or lengthy. 

“If the court does grant cert, it’s just too early to speculate as to what the details of an actual decision would be,” Silverstein said. “There are some nuances in here that could result in decisions that might have pretty different implications from each other.” 

For example, a significant part of CHIP and RSA’s case argues that landlords should have broad leeway to remove a tenant from an apartment when their lease expires. The right to a renewal is a major pillar of rent stabilization, distinct from regulating rents. 

In the same vein, CHIP and RSA take issue with tenants passing on their apartments to family members under the RSL, and limits on when and how a landlord can demolish a property, take apartments back for personal use, or convert them into condominiums.

A separate, secondary argument attacks rent regulation as an unfair burden on a subset of property owners, arguing that tenants’ ability to pay rent should not be considered in annual votes on allowable increases. 

“We’re not arguing that all regulation of rent levels is unconstitutional—we just believe New York is going about it in an unconstitutional manner,” said a spokesperson for CHIP and RSA’s legal team in a statement to City Limits. 

They went on to describe speculation about an uptick in evictions as “fear mongering,” and said success would look like “appropriate guardrails on how far governments can intrude when rental agreements expire.” 

Yet Ed Josephson of the Legal Aid Society, co-counsel for tenant groups who joined all of the pending rent stabilization lawsuits, accused CHIP and RSA of downplaying the seriousness of their ultimate goal—to decline lease renewals that help a large share of renters stay rooted from year to year—even as he deemed it a long shot. 

“The claim that landlords should be able to just eject tenants at the end of their leases, that’s the core right of rent stabilized tenants,” Josephson said. “To the extent that there are limits on the rents that could be charged, that does you no good if you can be kicked out of your apartment.”  

How might tenants and landlords respond? 

If any aspect of the RSL is struck down, decades of rent stabilization have created a strong base of tenants that would pressure Gov. Kathy Hochul to pass new protections, said Cea Weaver, organizing director for the statewide coalition Housing Justice for All. 

“There would be a lot of political pressure for the governor to do something,” she told City Limits, adding that there would be months to strategize if a cert petition is granted this fall.

Martin, of CHIP, said that granting his group’s petition would give them leverage to negotiate with state lawmakers and reform rent laws under more landlord-friendly terms. 

“We immediately begin negotiations if we get cert, and hopefully we can get to an amicable solution that doesn’t require a court decision,” he said. 

CHIP has been lobbying over the last year, without success, to reset rents in empty stabilized apartments, arguing landlords otherwise cannot afford repairs. Negotiations could be in this vein, according to Martin: “When a tenancy ends, I don’t believe the unit of housing should be locked in amber.” 

One state lawmaker with a significant stake in this conversation declined to even speculate. A spokesperson for state Sen. Brian Kavanagh, chair of the Senate Housing Committee, said his boss didn’t see the benefit of discussing what might happen given the “highly unlikely event” of a landlord victory. 

Esteban Girón, a rent stabilized tenant and organizer with the Crown Heights Tenant Union, also panned the challenges, calling them a “nothing balloon.” But he did recently meet with fellow organizers to discuss them, particularly in light of recent press attention.  

Ultimately, he said, they settled on sticking to their current strategy, which is to help more tenants get organized. This year’s state legislative session already clarified the need, as lawmakers declined to advance Good Cause eviction, which would limit rent increases and boost eviction defenses outside of the stabilized rental market. 

“The bottom line is we’re going to have to build power and keep building power,” Girón said. “And that’s going to be the answer regardless of what happens in the Supreme Court.”

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