Will Mamdani’s Rent Freeze Hold Up?

Will Mayor Zohran Mamdani’s rent freeze hold up in the courts? That’s the question after the approval of the Marxist mayor’s confiscatory move by the city’s purportedly independent Rent Guidelines Board. The freeze would cap the cost of housing for some 40 percent of the city’s rental units — but spike prices for renters of market-rate apartments as landlords seek to make up for the lost revenue, ratings agency Moody’s has reported. While Mr. Mamdani touts the board’s move as “a historic victory for New York City tenants,” advocates for property owners warn of the implications. “This will only result in more dilapidated housing and potentially more foreclosures and bankruptcies,” avers the chief executive of the New York Apartment Association, Kenny Burgos. “We have been looking into how the board collects data and then ignores it for years,” he tells us, and “all options are on the table.”The rent freeze vote, in the Times’ telling, reflects “Mr. Mamdani’s view that an aggressive public sector should work to rein in private industry.” Yet the Times reports that the vote “also reinforced a view of housing policy that is growing in popularity on the left: that strict rent regulation should be paired with unleashing more private development to help ease the city’s housing shortage.” This reflects a delusion among liberals of Mr. Mamdani’s ilk.What private developers, after all, are likely to be willing to invest their capital in New York City housing in an economic climate that punishes, or even prohibits, the unimpaired operation of the market? The decision to allocate private capital to a particular project is predicated on the idea of a return on investment. This calculus is upended if the city bars property owners from raising the prices that they can charge for housing.Viewed through this lens, the potential of a legal challenge to the Rent Guidelines Board’s decision is all the more significant. Would property owners have a legal leg on which to stand? The Supreme Court at Washington has in the past been hesitant to take up the legitimacy of New York’s rent control regime. Mr. Burgos, though, argues that the process that led to last night’s rent freeze vote breached state laws — and due process.“Nowhere in the law does it say the Mayor has the power to force the 9-member, independent Rent Guidelines Board into premeditated rent freezes,” Mr. Burgos has said. Hizzoner’s vow “to force the Board to freeze rents before reviewing a shred of evidence isn’t leadership,” Mr. Burgos asserted, “it’s blatant abuse of process and the law.” A real estate lawyer, Paul Alessandri, at a New York firm, Belkin Burden Goldman, has also raised questions about the move’s legality.The mayor’s rent freeze vow “seems to anticipate a particular outcome before the statutory review process takes place,” Mr. Alessandri said. That suggests a tension with the rent board’s “obligation to consider economic data annually.” Landlords, Mr. Alessandri asserted, “could conceivably challenge the action,” but the outcome would depend in part on how the board “documents its reasoning and whether the courts view its process as sufficiently grounded in fact.”The doubts over the board’s legitimacy were underscored when one of its members resigned in protest ahead of the vote. An appointee of Mayor Eric Adams, Christina Smyth, said the board “stopped being a fact-finding body” and was packed by Mr. Mamdani “to deliver a rent freeze” at all costs. She said the board failed to weigh evidence, as it is tasked with doing. This could prove a question for the courts if they weigh Mr. Mamdani’s attack on property rights.

Will Mamdani’s Rent Freeze Hold Up?

Will Mamdani’s Rent Freeze Hold Up?

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