Major Win For Rent-Stabilized Tenants Means Reimbursement

A judge threw out the fixed price rent hikes the Rent Guidelines Board imposed on New Yorkers who live in rent-stabilized apartments — meaning that some 300,000 rent-control tenants who have been overpaying for the past two years might be reimbursed. The far-reaching ruling is a big victory for tenants and tenants advocates, and it could turn out costing landlords tens of millions of dollars.

According to the Daily News, a Manhattan Supreme Court Judge deemed that the Board's minimum rent increases had penalized "tenants failing to move in a city that has virtually no affordable housing" by charging those who paid less than $1,000 in rent per month fixed amounts of money, not just percentage upticks as was usually the case. In 2008, the board ruled that landlords could increase rents on two-year leases by 8.5 percent or $85, whichever was more. Last year, despite protesters urging the group to keep rents flat, charges on two-year leases surged by six percent, or $60, whichever was more.

"The board, which had been exceeding its authority for years — it stops them in their tracks," said Ellen Davidson of the Legal Aid Society, who estimated that landlords might turn out paying between $36 million and $100 million to tenants in refunds. "It's a huge victory." She added: "It affects an immense amount of tenants," she said. "If they've been subject to the increase, they should get the money that they overpaid back." According to the Voice, the city is planning to appeal.

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By Ben Muessig in News on January 26, 2010 10:42 AM

Comments [rss]

Oxford

Anyone who thinks this is good for renters is crazy. Mass defaults by landlords and a screeching halt to investment in NYC apartments will do nothing but drive market prices up and the quality of rent-stabilized housing stock down. When you can't raise prices, you simply reduce value. Rent controls are a prime reason for NY's affordability crisis and this decision will add high octane fuel to that fire.

NannyState

Suddenly, everything at IKEA is back at full price.

Thinky Think

Yeah!!!!!

Bubba

I'm with Jacques. Why is the city’s corporation counsel carrying the landlords' water on this? Oh, I forgot, in Mike Bloomberg's New York anyone who isn't wealthy is viewed as a nuisance.

JacqueMehoff

this is good news, I was wondering why after steady expectant increases every year, why that year had an extra surcharge or the increase was just higher than average. this will help out a lot.

God bless you Justice Goodman.

AND, why is the CITY planning to appeal? it's not coming out of the City's money, in fact that money refunded will go back into the city.

WesleySnipesAlot

inb4 free-market rage from armchair economists

thefacts

FYI, Supreme Courts have a "Justice"; lower courts have a "Judge".

Either way, this is a great victory for tenants who are wise enough to avoid being gouged at market rate.

The Rent Stabilization Association, which is actually a group of 25,000 landlords, has great influence with the Rent Guidelines Board as well as many elected officials, particularly upstate Republicans, and spends a fortune influencing legislation to screw tenants.

Kudos to Justice Goodman on this sound decision.

mellow_fellow

FYI, Supreme Courts have a "Justice"; lower courts have a "Judge".
What do courts higher than state Supreme Court have?

thefacts

Appellate Division jurists are also called "Justices", since they are basically part of the NYS Supreme Court.

Court of Appeals jurists are called "Judges".

grandzu

who have been overpaying for the past two years

But overall underpaying for their entire tenancy.

Clarice City

They ARE the reason rent is "too damn high".

Clarice City

Meanwhile, schools are closing and homeless shelters are overflowing but, let's make sure these middle class people already being subsidized by other middle class people get their fast cash.

Gothampc

Membership has its privileges. I've been pumping money into New York City's economy for years. Why shouldn't I get a break over the Sex & the City wannabees who keep driving the price of everything up.

When I came to NYC, Duane Reade was bargain basement cheap, not the Sephora-esque store it's trying to currently pretend to be.