Some time between the flowering of the first spring caucuses and the final tulips bloom in our area, the five judges of an Albany appellate court are expected to decide the validity of the rent-control legislation passed by the City of Kingston on November 9, 2022.
“The judges can be expected to deliver their decision anywhere usually from six to eight weeks,” predicted Kingston corporation counsel Graves-Poller after she had just presented oral arguments supporting the city’s case to the appellate court on Friday, January 12. “I imagine with an appeal, with this level of complexity … we’ll probably be more in the eight-to-ten-week range.”
The judges of the appeals court peppered Graves-Poller’s ten-minute speaking time with questions, seeking insight into the methodology and justifications of a rental vacancy survey performed in May and June of 2022.
The lawyer for the landlord litigants, Magda Cruz, was similarly cross-examined. She assailed the rental vacancy study directly, attempting to undermine the adverse judgment her clients received from Ulster County Supreme Court justice David Gandin in February 2023.
While Gandin had upheld the vacancy study, he had ruled against rent-control guidelines recommended to the city by its rent board, vacating a retroactively applied limit on rent increases. He had also ruled against an across-the-board rent decrease.
Two intervening attorneys, Sarah L. Rosenbluth of the attorney general’s office, representing the Division of Housing and Community Renewal, (DHCR), and Marcie Kobak from the Legal Services of the Hudson Valley, offered arguments appealing those adverse rulings.
Building a precedent
All the major players had their say over the course of an hour. Now it’s a waiting game while the judges tiptoe through the tulips, parsing their arguments and weighing far-reaching consequences.
The passage of the Housing Stability and Tenant Protection Act (HSTPA) of 2019 resulted in the statewide expansion of the Emergency Tenant Protection Act (ETPA), rent regulation for a specific class of apartments. There has not yet been an appellate ruling north of Rockland County respecting a municipality’s method’s used to adopt that rent regulation. Whatever decision these five judges deliver will build precedent within the counties inside its jurisdiction.
“Within the same judicial department,” explained Graves-Poller, “there is binding authority. But certainly, any careful consideration of issues by one appellate division is something that another appellate division is going to look at, even if they aren’t strictly bound by it.”
The precedent most germane to the present case in the Third Department dates to the 1984 decision reached by judges in the Second Department appellate regarding the rental vacancy study performed in Spring Valley in Rockland County.
“Since a good-faith study was made based on precise data obtained from a substantial majority of the complexes,” four out of the five justices in that case had agreed, “it would be anomalous to hold that those who refused to cooperate with the statistical study should benefit from their stubborn and studied silence.”
The affected landlords in that case had evaded the request to participate in the rental-vacancy survey and after it was completed had criticized its findings in courtroom litigation.
Alternate vacancy studies
Numerous owners of buildings in Kingston now under a rent freeze and the jurisdiction of the ETPA, and thus the Department of Housing and Community Renewal (DHCR), similarly failed to register their buildings as requested for the Kingston rental-vacancy survey. The landlords deployed a variety of explanations, from blaming instructions for being too confusing, to claiming they never received a request to register in the first place. A number of surveys were finally returned filled out incompletely or inaccurately.
The lawyer for the Kingston landlord litigants addressed that perception directly in her arguments.
“The fact that they may claim, ‘Well, owners didn’t comply’ or ‘owners didn’t respond,’ there’s absolutely no evidence in this record,” said Cruz, “of any of my clients deliberately not responding, not coming back, if there had been any follow-up? There was none. Your Honor.”
The majority of affected property owners in Kingston, those who accounted for 834 units in 33 buildings, did register their buildings with no trouble at all and in a timely fashion, which has invited skepticism of the actions of the uncooperative minority.
When the issue was brought before judge Gandin at the county courthouse, the lawyers for the litigants had brought their own vacancy study, which they claimed included all the responses of the previously non-compliant property owners.
Judge Gandin didn’t find the alternate vacancy study convincing.
“While petitioners claim they obtained a 100 percent survey participation rate resulting in a 6.22 percent vacancy rate, property owners had a vested interest in participating in the private survey which petitioners ostensibly conducted for the express purpose of challenging the imposition of rent control.”
Kingston is first but not last
The appearance of non-compliance recently repeated itself in the Village of New Paltz, which performed a vacancy study in eleven buildings containing 528 apartments which could be regulated.
When the survey was conducted, the 225-unit New Paltz Gardens apartment complex claimed it had returned its completed vacancy study within the time frame allotted. But the village said it never received the completed study.
When the village again asked for the vacancy studies from New Paltz Gardens, deputy mayor Alex Wojcik said, it received two responses with different numbers from each other.
“The property owners here understand what’s at stake,” explained Graves-Poller, speaking of the landlord class writ large. “Kingston is the first municipality to opt in under the 2019 framework … under the deferential standard that the legislature left in place, but they know that we’re not going to be the last.”
Since Kingston first performed a rental vacancy survey and declared a housing emergency, the Village of Nyack and the City of Newburgh each followed suit. Nyack has already instituted rent regulation, and Newburgh will be populating a rent guideline board shortly. In Poughkeepsie a rental vacancy study is currently underway.
New Paltz could have declared a housing emergency after its survey came back with a 2.7 percent vacancy rate. Faced with the potential drain to the village’s resources that a years-long court battle could bring, mayor Tim Rogers and a majority of the trustees decided otherwise.
Survey participation enforcement
From Kingston to Newburgh to New Paltz to Nyack, every rental vacancy study performed so far has been challenged by motivated landlord groups. The lead appellant in the case before the appellate court in Albany, the Hudson Valley Property Owner’s Association (HVPOA), came into being a month after the Kingston vacancy study was completed. In a year and a half the HVPOA claims that its membership has grown to include members from nine counties.
HVPOA executive director Rich Lanzarone has travelled across county lines to attend public hearings and challenge vacancy-rate surveys. He appeared at the public hearing in Newburgh brandishing his own vacancy study numbers which he said contradicted the city’s.
Regardless of the appellate court’s decision, a City of Kingston resolution has already ensured vacancy studies will be repeated at three-year intervals, with the next one scheduled in 2025.
When it comes time, a new state law will be waiting to hand a big stick to municipalities thinking of conducting their own vacancy surveys. Sponsored by New York state senator Michelle Hinchey, a bill signed into law on December 13 by governor Kathy Hochul will require property owners to respond when municipalities come calling with vacancy-rate surveys upon pain of financial and legal punishment.
“Our communities face a dire lack of housing supply,” said Hinchey upon the bill’s passage, “and having accurate vacancy-rate data that shows how many homes are available is a vital tool that can help municipalities stabilize rents in a housing crisis.”
Coercing compliance
While non-compliance can lead to a modest municipality-imposed civil penalty of up to $500, the Hinchey-sponsored law provides further incentives for non-responsive property owners. Their units will be assumed to reflect a zero percent vacancy rate, thus pushing the municipality closer to a rental vacancy finding of less than five percent.
“The foundation of the law, it’s kind of settled territory,” Graves-Poller said. “The Spring Valley case that we talked about upstairs established a no-vacancy presumption, and holds that that’s appropriate. But it’s great that we have additional resources under state law to ascertain the vacancy rate and to coerce compliance.”
Kingston housing director Bartek Starodaj, who also came up to Albany to witness the legal arguments, agreed.
“This law is not introducing something entirely new. It’s clarifying something that’s been established. If anything, it validates the approach that I had in my survey,” said Starodaj. ”The methodology that I used in my survey is exactly what’s in this legislation.”
He said he modeled his survey on the Spring Valley vacancy survey. Newburgh and Nyack also modeled their vacancy surveys after Spring Valley’s.
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