Property Rights

Will the Supreme Court Consider the Constitutionality of Rent Control?

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The Fifth Amendment to the U.S. Constitution declares that private property shall not be taken "for public use without just compensation." Eminent domain is the classic example of such a government taking, but what about rent control? Do rent control laws also count as a public use that requires the payment of just compensation to affected property owners? New York City landlord James D. Harmon Jr. thinks so, and as The New York Times reports, he's attempting to take his case all the way to the Supreme Court:

The regulations are meant to support the government's goal of maintaining affordable housing for its citizens. Instead, [Harmon] says, the laws have forced him and his family to shoulder the government's burden and extend what is essentially "privatized welfare" to rent-stabilized tenants who are paying rent 59 percent below market rates and who have rights of succession to their lodgings in his house.

As the story goes on to say, this is an "uphill battle" for Harmon. That's putting it mildly. The Supreme Court's Takings Clause jurisprudence is notoriously unfriendly to property owners. But the Court did ask New York City and state to respond to Harmon's request that the case be heard, when the justices could have just rejected the case outright, as they do with the majority of the petitions that come their way. So maybe rent control will be getting its day in court.

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  1. PM LINKS!

  2. Why do libertarians like big-government regulations that favor them, and dislike them if they don’t?

    1. Shithead, is that you?
      Sounds like one of your lies.

    2. Re: White “Crying Little Girl” Imbecile,

      Why do libertarians like big-government regulations that favor them, and dislike them if they don’t?

      When did you stop masturbating over nudie pics of your mom?

  3. Are you serious?

  4. I guess the first line of defense is that nothing is being taken for “public use”, since these are private apartments.

    However, they have already signed off on eminent doman seizures to build private apartments, so that shouldn’t work. In some ways, losing this case on the grounds that the Takings Clause doesn’t extend to property that will be for private use such as this would be a huge win, since it should stop the current perversion of eminent domain for private development.

    The next line might be that nothing is being taken. This would be a “regulatory taking”, but I can’t recall where the Supes landed on that when it came up years ago.

    1. According to da wiki, regulatory takings jurisprudence only applies when the property owner is denied any possible economically viable use of the property.

      The general approach to this question was summed up in Agins v. City of Tiburon, 447 U.S. 255 (1980) which states that the application of land-use regulations to a particular piece of property is a taking only “if the ordinance does not substantially advance legitimate state interests … or denies an owner economically viable use of his land.” However, in Lingle v. Chevron, 544 U.S. 528 (2005), the Supreme Court overruled the “substantially advance” criterion of a taking.

      1. Well, there you have it. Productive citizens lose; state and its parasites win. Again.

      2. “economically viable” seems to have a very narrow definition. See my post below about King County regs. If the County can tell you that 66% of your land is off-limits to you, but not to worry, you still hold the deed to it and will still pay taxes on 100% of it– and the property owners still don’t get any compensation, then I’d like to know what they mean -exactly-by “economically viable”.

      3. I would normally agree that rent control isn’t a regulatory taking, but one aspect that I don’t know about makes me think twice – are you allowed to stop renting to your tenant after the lease so that you can use your property for your own purposes? I.e. Maybe you want to use the unit for storage, as a little office, etc. If rent control stops you from doing that, then I’d say one might have a case. Rent control then would only be viable if the restriction is that if and when you do re-rent-out the apartment, you can’t go above the original price

        In general rent control is crappy policy anyway. NJ’s COAH systems and laws are much more effective, or COULD be much more effective if they actually used the fund. It wouldn’t be expensive for townships to buy up individual units here and there and then rent them out at lowered rents. Or work with developers to add low-cost units, Or any number of different things you could do.

        Or god forbid, they lower building and development regulations and let people build. Of course, that only works so well since every greedy ass carpetbagger landowner wants to build only more expensive bigger units just because they think they COULD make money, regardless of the actual market. But then again, they could also lower the regulations for adding partition walls and stuff to physically subdivide units. It should just be as long as each unit has a bathroom or a bathroom and a kitchen, and the walls you add be double-walls for noise remediation with extra drywall below the topplate and on the toeplate, then you can just subdivide any 2-BR 2-BA units.

    2. “Public use” is out the window now, even though that’s the actual language of the 5th Amendment. The infamous Kelo case has held that, the actual words and their actual meanings be damned, it’s really takings for a “public purpose” by government that are permissible provided they’re compensated. Could it be that the ruling class has stepped on their own dicks? After all, rent control is definitely for a “public purpose”–affordable housing (even though any trained economist who is not a drooling moron, such as Paul Krugman, will tell you that the actual outcome of rent control laws is anything BUT affordable housing). So perhaps the Supremes have painted themselves into a corner. A taking for a public purpose requires compensation!

    3. “”I guess the first line of defense is that nothing is being taken for “public use”, since these are private apartments.”‘

      Nothing is being taken. The landlord still owns the building. It’s a price control issue, not a possession issue.

      I’m not sure if there is a federal issue here. Can a state create a board to regulate prices? I’m pretty sure states do that already with insurance costs and utility costs.

  5. Are you serious?

  6. Bloomberg response: “Are you serious?”

  7. I think the argument would be: If it’s for private use, it can’t be don, but if it’s for public use there has to be compensation.

  8. Do rent control laws also count as a public use that requires the payment of just compensation to affected property owners?

    Rent control is actually a violation of the Protection of Contracts mandate in the constitution.

    Article I, section 10, clause 1. It states:

    “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

    The Contract Clause prohibits states from enacting any law that retroactively impairs contract rights. Renting is a contract between lessor and lessee. You cannot therefore impair the free contracting between the two parties.

    1. Every lease that was in effect when rent control went into effect expired decades ago.

      If there were perpetual leases in effect at the time, then you might have a beef. I seriously doubt there were.

    2. Don’t wave that dusty old piece of paper under my nose! It’s just words! Words! And besides that, it’s a “living document”.

  9. Do rent control laws also count as a public use that requires the payment of just compensation to affected property owners? New York City landlord James D. Harmon Jr. thinks so, and as The New York Times reports, he’s attempting to take his case all the way to the Supreme Court:

    He’ll probably lose.

    King County has done a similar thing by telling rural property owners that they can’t touch or develop some 66% of their property. No compensation required.

    http://www.seattlepi.com/local…..159601.php

  10. But if it wasn’t for rent control Janet couldn’t have afforded her grandmother’s apartment and she wouldn’t have reconnected with Rachel and Rachel wouldn’t have gotten back together with Ross and Joey and Chandler wouldn’t have been across the hall and Phoebe-

    [slap] [slap]

    Sorry.

  11. Rent control can be battled; you just have to have enough dough to be able to threaten a government with bankruptcy:
    “Personally it’s heartbreaking, but I’m going to support this,” Councilwoman Stephanie Harlan said. “If we have any significant chance of losing [the lawsuits], the city would be bankrupt or close to it.”
    Note the sleazy councilcritter doesn’t give a hoot about the effects on the property owners, it’s just a concern since it could bankrupt the city.
    http://www.tenantstogether.org/article.php?id=1894

  12. Does this lawsuit count as rent seeking?

    1. Funny.

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