NY’s top court hears arguments on upstate rent control

The future of rent control in Upstate New York is being decided in the state Court of Appeals as landlords try to undo Kingston’s landmark adoption of the Emergency Tenant Protection Act. The outcome of the case could either doom or breathe life into other upstate cities' dreams of rent stabilization at a time when the average cost of living for everyone is going up.

In 2022, the city of Kingston conducted a vacancy study which found that the rate of vacant apartments was low enough for the city to be eligible to declare a housing emergency and opt in to the ETPA. The city then sent up a Rent Guidelines Board which voted in November 2022 to reduce the rents in rent-stabilized buildings by 15%. 

The Hudson Valley Property Owners Association and a handful of Kingston landlords filed suit against Kingston’s Rent Guidelines Board and the city itself, alleging that the vacancy study was flawed and the rental reduction was invalid. Lower courts have largely sided with the city, but the landlords appealed the case all the way to the Court of Appeals, the state’s top court. 

The legal limbo has given many other cities pause in moving forward with their own vacancy studies and plans to opt in to the Emergency Tenant Protection Act. For landlords, there’s a clear pathway to hamstring a city that attempts to establish rent stabilization by challenging the vacancy study in court and either waiting for a receptive judge or hoping that the delay and costs associated with the legal battle lead the city to give up. The City of Poughkeepsie is currently in the middle of its own appeals process after landlords successfully got its vacancy study thrown out. Newburgh put its plan on hold indefinitely. 

On Thursday, Court of Appeals judges heard arguments from attorneys representing the landlords and those representing Kingston, the state and intervening advocates. The judges appeared receptive to the argument that Kingston’s survey was performed in good faith, rather than pockmarked by technical and procedural errors as alleged. 

But some judges expressed concern that negative adjustments could take a unit's cost below fair-market rent, as opposed to simply reigning in costs of units with prices that have shot up compared to local economic standards. An attorney for the state Department of Housing and Community Renewal struggled to defend the Rent Guidelines Board’s right to adjust rents downward.

“I hear what you’re saying, and I'm not exactly sure how," the attorney said when asked about the Rent Guidelines Board’s decision to reduce rents for all eligible buildings by 15%.

A final decision in the case is not expected for months. In the meantime, some state lawmakers have already attempted to create guidelines for the ETPA process and the controversial vacancy studies. 

State Sen. Brian Kavanagh and Assembly Member Sarahana Shrestha are sponsoring the Rent Emergency Stabilization for Tenants Act, which would expand the pathways available to cities that want to adopt rent control measures and make vacancy studies optional. State Sen. Michelle Hinchey and Assembly Member Sarah Clark passed legislation in 2023 that imposed penalties on landlords who ignored vacancy study requests. 

The significance of the case wasn’t lost on Kingston Corporation Counsel Barbara Graves-Poller, who said officials from other cities have reached out to support her as the success of her case has ramifications across the state. 

“I have one client, but I understand the statewide view and impact of this litigation,” she told City & State. “I feel the weight of that.”