New York Property Owners Go to Court

In an effort to vindicate the rule of law and property rights at New York City, apartment owners are suing to halt Mayor Zohran Mamdani’s rent freeze. The property owners argue that the city’s Rent Guidelines Board, a purportedly independent agency that has power over rent-stabilized apartments, “ran a sham process with a predetermined outcome, and failed to follow the law” when it agreed to impose Hizzoner’s cap on the cost of leases.“That is not the way government decisions by independent boards are supposed to be made,” one of the lawyers for the landlords, Randy Mastro, tells us. The property owners envision the case, a so-called Article 78 petition, “as a check on the Mayor’s abuse of power,” Mr. Mastro adds. The case was filed in a trial court at Staten Island by owners of scores of apartments across the city. The judge assigned to the case, Ralph Porzio, is a Republican.The rent freeze would cap costs for more than a million apartments, which make up some 40 percent of New York’s rental units. Yet as ratings agency Moody’s has reported, the freeze would cause rents to spike for the rest of the city’s tenants in market-rate apartments as landlords attempt to compensate for the lost revenue. That is but one of the unintended consequences of the Marxist mayor’s confiscatory démarche.The laws of economics help explain why price controls, like caps on rent, fuel the crisis of affordability that leftists are purporting to solve. Feature the fact that, Reason reports, some 60,000 rent-stabilized apartments at New York City are vacant “because their owners can’t afford to renovate them and put them back on the market.” Nearly 10 percent of rent-stabilized buildings “have operating costs that exceed their revenues,” Reason adds.“The math doesn’t math,” Reason reasons, citing a city landlord. That point is borne out by data supplied by the landlords in their suit showing that owners’ expenses in 2025 rose by some 5.3 percent over the prior year. Tenant advocates, cherry-picking the statistics, argue that “net operating income for stabilized buildings increased 6 percent” over that period, the Real Deal reports, but this ignores debt service and capital spending borne by landlords. This manipulation of information by anti-landlord activists is telling. History in other countries, and local experience, show that when rent control is imposed, property owners are forced to skimp on maintenance. The result is a steady deterioration of the quality of housing stock, and the ultimate loss of rental units. Economist Assar Lindbeck called rent control “the most efficient technique presently known to destroy a city — except for bombing.”So much for policy. As a matter of law, the landlords are focused on the violation of due process. Mr. Mamdani, they argue, “went to extraordinary lengths to pack” the Rent Guidelines Board “with loyalists” to jam through the freeze. “To do the Mayor’s bidding,” the landlords assert, “this Board then made a mockery of its statutory mandate, resorting to multiple manipulations of its own data to try to justify this irrational result.”The landlords’ accusation before Judge Porzio, then, is that the Rent Guidelines Board “did not act as an independent fact-finding body considering and applying specific statutory criteria, as the law requires.” In a similar dispute that arose in 2017 under Mayor Bill De Blasio, a Democratic state judge, Debra James, dismissed the case, stating that as a matter of state law, tenants’ travails outweighed any hardship cited by landlords.Yet “freezing the rent does not freeze my mortgage, property taxes, insurance, water and sewer bills, utility costs or the cost of repairs,” reckons a landlord in the current case, Violet Zharku. The lawyers for the property owners call the freeze a “textbook example” of “arbitrary and capricious decision-making, and an abuse of discretion.” The stakes, to be sure, are high for New York, and Mr. Mamdani’s mayoralty, as Judge Porzio weighs the case.

New York Property Owners Go to Court

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