The rental vacancy-rate survey conducted in the City of Kingston in the spring of 2022 has been unanimously confirmed by an appellate court in Albany.
The five-judge vote of confidence vindicates director of housing initiatives Bartek Starodaj, who based his survey’s methodology on vacancy studies in other downstate communities and on Kingston’s previous survey by consultant’s CGR in 2020.
“Bartek’s vacancy study was the foundation of the analysis of local housing conditions,” explained city corporation counsel Barbara Graves-Poller. “He actually took his study a step further in a couple of respects, really putting the city’s imprimatur on the process as opposed to having a third party conduct it. The [Common] Council spent significant time looking at this study.”
Statewide and national advocates have been struggling to address the nationwide problem of a lack of housing, particularly affordable housing. This decision would reverberate far beyond Kingston, Graves-Poller said.
“None of this happens through the stroke of a pen,” she added. “The protections and rights that we all seek to uphold require significant effort and input at the local level. And that is something that is hard for people to see from the outside, but is what we see on display in today’s victory.”
RGB is upheld
The survey’s results had revealed a 1.57 percent vacancy rate for rental apartments in the city. The Common Council declared a housing emergency declaration. Mayor Steve Noble signed the legislation.
A rental guidelines board (RGB) created by the city recommended base rents agreed to in leases be rolled back 15 percent, The RGB also recommended creation of a look-back period from January 1, 2019 through July 31, 2022 for setting a fair market-rate rent increase of no more than 15 percent.
As the recommendations were set to take effect, a lawsuit brought before county supreme court judge David Gandin by the landlord advocacy group Hudson Valley Property Owners Association (HVPOA) stayed their implementation. Gandin ruled in February to uphold the city’s survey while also entirely vacating the RGB recommendations. His rulings set off appeals by the HVPOA to overturn the survey and representatives of the RGB to revive the vacated recommendations.
The appellate court’s March 20 decision reinstated the RGB’s recommendations.
In his statement following the ruling, Kingston mayor Steve Noble praised the court. “The appellate court’s concise and thoughtful decision provides hope and support for our tenants here in Kingston who have been suffering during this housing crisis,” he said. “The judges unanimously concurred that the City of Kingston correctly applied the 2019 Emergency Tenant Protection Act to our community in an effort to rein in outlandish rent hikes by a few property owners at a time of critically low vacancies.”
Lanzarone the litigator
Rich Lanzarone, the executive director of HVPOA, is skeptical the appellate court’s decision will make much of a difference.
“The retroactive rent reduction will have virtually no effect,” predicted Lanzarone. “Remember that this process is called the fair market rent appeal process. That is because tenants, to get a reduction, have to show that the rents they are paying are above fair market rents as established by HUD [the federal Department of Housing and Urban Development].”
Lanzarone contended that a majority of rents in the affected properties were well below that threshold. “Calls into question the declaration of an emergency,” he said.
Because fair-market rent appeals needed to be filed within a time frame which has since expired, Lanzarone claimed, most tenants no longer have rights to appeal.
“DHCR says they have about 50 timely received appeals to consider, and most of those will fail since their rents are already low,” said Lanzarone. “If attempts are made to actually reduce rents based on the 2022 RGB decision, protracted litigation will be the result.”
Litigation from Lanzarone is no idle threat. He has already initiated court action attacking the viability of the rental-apartment vacancy survey performed in the City of Newburgh, again attempting to undermine the declaration of a housing emergency. Lanzarone contended that case was different from the one his group had lost in Kingston.
“We are not claiming an inadequate sample size, as in Kingston,” said Lanzarone. “It’s straight math and other very straightforward issues, a cleaner case.”
Rent-stabilization rules
While Graves-Poller says the decision in Kingston provides an important and persuasive precedent going forward for any court decision on similar challenges to a municipality’s survey, the ruling is not legally binding for other New York appellate courts.
A state law adopted in 2019 expanded rent stabilization laws on the books since 1974 from municipalities inside the greater New York City metropolitan area to the rest of the state. For the first time, these other municipalities were granted the authority to declare housing emergencies and to opt into rent stabilization — provided they prove a vacancy rate below five percent.
The HVPOA’s challenge of Kingston’s survey was a first-of-its-kind sally into uncharted legal waters.
“Since 2019 the appellate division has never had to opine on the methodology a city, town or village uses to evaluate its local conditions and decide whether or not to opt in to rent stabilization to the extent to which it sees a need for rent stabilization,” said Graves-Poller. “So this raises issues of first impression.”
Implementation is key
Lanzarone’s reach into Orange County is made possible through the stratagem of inviting other property owners under the wing of the HVPOA, thereby gaining for itself the standing to pursue legal action through the property of association.
And Lanzarone is not stopping in Newburgh.
Last week the HVPOA joined a lawsuit in the United States District Court of Northern New York, a federal court in Albany County, in an attempt to invalidate offending subdivisions of a state law, passed in December which compels landlords to cooperate with municipally conducted vacancy studies or face penalties both financial and detrimental to the interests of the landlord.
The law, first introduced into the state senate by Ulster County senator Michelle Hinchey, holds that a landlord who fails to respond to a municipal survey will be assumed to have no vacancies, a finding which pushes a municipality closer to the less-than-five-percent vacancy rate required to declare a housing emergency.
Non-responsive landlords
The HVPOA’s complaint takes issue with just those features of the law. The surveys are likened to warrantless administrative searches, and so when landlords are compelled to submit private business data, the lawsuit contends, it is the landlord’s constitutionally protected Fourth-Amendment rights which are being violated. The complaint also alleges Fourteenth-Amendment eights to be violated, but this charge is not explained further.
“The law requires a property owner to divulge privileged proprietary information concerning three years’ past rents, tenants’ names, lease details, and any other information a municipality deems relevant,” alleged Lanzarone. “This is not necessary to determine the vacancy rate.”
Summarily imposing fines and tallying non-responsive landlords as zero vacancies without notice of violation, contended Lanzarone, constituted a violation of a citizen’s rights to due process.
“If you get a parking ticket you are always given the opportunity to protest, explain exculpatory circumstances, present evidence, etc, at a hearing if you so choose,” analogized Lanzarone. “This law is unconstitutional.”
The three largest landlord advocacy groups in New York State, REBNY, CHIP and RSA, represent among their memberships individual landlords who own hundreds if not thousands of units, the cost to whom should the regulation of rents be permitted anywhere in New York State would amount to huge losses in revenues.
While Lanzarone hasn’t disclosed the identities of the money-men funding the various HVPOA lawsuits, he daydreams openly about his chances for a hearing in the United States Supreme Court.
“It’s unfortunate, but the City of Kingston, the rent guidelines board and the court, today may have given property owners the silver bullet,” he said. “The 15 percent rent decrease may finally get the issue before the U.S. Supreme Court.”
The nation’s highest federal court has so far declined to weigh in on rent-stabilization cases. In late February, misleadingly-named landlord advocacy groups Community Housing Improvement Program (CHIP) and Rent Stabilization Association (RSA) attempted to appeal a federal court ruling to challenge New York City’s rent-stabilization system, arguing that the system created a taking of property under the Fifth Amendment.
The Supreme Court denied review without additional explanation. Justice Clarence Thomas suggested that a case analyzing the system rather than presenting generalized allegations injury might have increased the chances of high-court consideration.
Broader perspectives
Corporation counsels for municipalities in New York State looking to opt in to rent stabilization will have to earn their pay. Regardless of their merit, like waves in an ocean, the lawsuits will never stop coming.
“From my perspective, implementation is always key,” said Graves-Poller. “When we think about a concept like the right to housing, as an attorney I think about how can I use the tools available to me to help me in this case for my client, the City of Kingston, to realize and protect that right. To make it real. And so when the city sees it has high rates of displacement of long-term residents, and on the council side they’re hearing from constituents, the mayor is hearing from a variety of stakeholders and members of the community, how can I use whatever tools are available to me to help translate something that we feel into something that we can implement? And that’s what I see as my role. To figure out how to use the law in this way that is able to breathe life into those kind of broader principles and norms.”
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