Court of Appeals upholds Kingston’s rent control policies

On Wednesday, the state Court of Appeals upheld Kingston’s 15% rent reduction and the vacancy study allowing them to opt in to the Emergency Tenant Protection Act, a move that could ease the financial burden felt by tenants while emboldening other upstate localities to opt-in to rent stabilization. 

Kingston opted into the ETPA in 2022 after conducting a vacancy study that found a vacancy rate under 5%. The city then formed its own Rent Guidelines Board, which approved a 15% rent reduction in rent-stabilized units. In what has become a common practice, landlords sued, claiming that the study was flawed and the rent reduction was illegal. The case wound its way through the court system, putting the effects of the rent reduction in limbo for years. But that came to an end on Wednesday, when the Court of Appeals finally ruled that the vacancy survey was not fatally flawed and the rent reductions could go into effect.

“Many of petitioners’ complaints about the survey results reflect minor methodological disputes, not fundamental problems with the reliability or the relevance of the survey’s data… Other contentions are essentially disagreements with the definition of “vacant,’” Judge Caitlin Halligan wrote in the decision.

“We held that the ETPA’s rent-stabilization scheme could be applied to leases entered into after the ETPA’s effective date but before a housing emergency had been declared,” the decision said, “reasoning that apartment owners had entered into leases “subject to the power of the state reserved by [the ETPA] to itself and to the municipalities . . . to determine the emergency need for controlling rents within its borders,” including by means of rent refunds.” 

Other cities like Newburgh and Poughkeepsie have attempted to follow Kingston’s lead, only to be met by identical lawsuits from the Hudson Valley Property Owners Association, who have argued that the vacancy studies should be considered null and void due to discrepancies in property owner outreach and unit inclusion. Even more upstate municipalities have shown interest in potentially adopting rent stabilization but have slowed their approach due to fears of legal challenges. The new case law could see a full realization of the 2019 Housing Stability and Tenant Protection Act, which allows upstate municipalities with a housing emergency to enact rent stabilization.

“Landlords can waste their money all they want on lawsuit after lawsuit. But the courts have been clear over and over again: tenants have the right to stay in our homes, whether through rent reductions, rent stabilization, or Good Cause,” said Cea Weaver, director of Housing Justice for All. “The real estate industry may have deep pockets, but tenants are half the state. We will keep fighting – and winning – until every New Yorker has a stable home.” 

Kingston-area Assembly Member Sarahana Shrestha, not planning to bank on the success of the lawsuit, introduced the Rental Emergency Stabilization for Tenants Act earlier this year alongside state Sen. Brian Kavanagh. The bill would create alternatives to vacancy studies for municipalities seeking to opt into the ETPA and clarify what constitutes a building covered by the ETPA. Additional legislation that would shift the onus of response on landlords in vacancy studies could see that specific hurdle in upstate housing policy remedied. 

It’s unclear what moves real estate has left following the case, although HVPOA Executive Director Rich Lanzarone said the decision is another example of the state hamstringing itself as the housing crisis continues. 

“In Newburgh and Poughkeepsie, our evidence and rent survey calculations were confirmed as accurate by the court, and both cities were determined to be wrong. In Kingston, the Court of Appeals accepted the City’s position without addressing substantial evidence that their survey was also conducted improperly,” Lanzarone said. “This decision will continue to restrict the housing supply, accelerate the deterioration of the existing housing stock, and lead to reduced housing investment in Kingston. We are reviewing the ruling and evaluating our next steps.”