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Deals & Dealmakers

Judge upholds rent freeze for over a million rent-stabilized tenants

By Sabina Mollot

On Tuesday, a judge ruled against a landlord group that had sued to undo the rent freeze for over a million stabilized tenants in New York City.

The fight might not be over though since the Rent Stabilization Association, which represents over 25,000 property owners in the city, later tweeted that it would review Judge Debra James’ decision and “seek grounds for appeal.”

Photo by Sabina Mollot
Photo by Sabina Mollot

Mayor Bill de Blasio, meanwhile, cheered the news, and while discussing it on Tuesday, also brought up the mansion tax, saying this would create affordable housing for 25,000 more New Yorkers.

“Everyone who has struggled to pay the rent ― here’s the good news ― the people won and the landlords lost,” de Blasio said.

While the judge’s written decision has yet to be released, even to the attorneys, the mayor said what it all boiled down to is that unlike what the RSA had argued, the court believed that the Rent Guidelines Board does have the right to consider tenants’ ability to pay along with operating landlords’ costs.

“So, the good guys won this one because the court understood that the city had every right to ask the question – how much does it cost to provide the housing?” the mayor said, according to an official transcript. “How much does it cost? What does it mean to the tenants? We have to take into account what tenants go through as well as what it means to landlords to run these buildings. The court looked at all of the facts, and the court was clear that this rent freeze was fair, it was right, it was just. It’s another example of how we say to the people of this city, we’re going to make sure this city remains affordable for everyone. This is your city. You have a right to be here. You have a right to know that you can have a place that you can afford to live in.”

The RSA, however, not so subtly blasted the mayor in a statement of its own, accusing de Blasio of being a hypocrite for hiking rents at two homes he owns in Brooklyn while “living rent-free in Gracie Mansion” and pushing for a freeze.

RSA President Joseph Strasburg also accused the mayor of using the RGB, whose members he appointed, to advance his political agenda.

“It’s disappointing that this court didn’t see that de Blasio’s political influence resulted in the RGB using a parameter ― tenant affordability ― that is not allowed by law,” Strasburg said. “The RGB process, which is supposed to be independent of City Hall influence, has been corrupted by a mayor that puts politics ahead of sound affordable housing policy, which is bad for tenants, affordable housing, and the owners of one-million rent stabilized apartments ― the largest providers of affordable housing.”

Meanwhile, the news was welcome, though not surprising, to attorneys for three legal organizations that, in January, filed to intervene in the case as third party plaintiffs, the Legal Aid Society, Urban Justice Center and Goddard Riverside. They’d previously dismissed the litigation as a “political stunt.”

Robert Desir, an attorney for Legal Aid, said, “The decision says the board has a wide latitude in what criteria it can employ in its decision.”

Harvey Epstein, an attorney with the Urban Justice Center, said, “It really reaffirms the rent freeze is reasonable and legal option for rent stabilized apartments. I think she looked at the statute, the clear intent of the statute, that (the board could) look at owners’ expenses and tenants’ affordability.”

Epstein is also one of two tenant members of the nine-member Rent Guidelines Board, which also has two owner members and five public members, including the chair.

The board issued its second rent freeze in a row last June for tenants signing one-year leases, and gave a two percent increase to those signing two-year leases. The one in 2015 was the first freeze in the board’s history.

The board will hold the first of several public hearings to help decide this year’s increase (or freeze) on Thursday.


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