Small-property owners are suing New York, city and state, in federal court, aiming to get tens of thousands of their “zombie” apartments back on the market.
Pray they win; tenants desperately need that housing — and local politicians need a warning about how their excess are endangering all the rent laws.
The problem: 2019 changes to the Rent Stabilization Law under then-Gov. Andrew Cuomo made even vacant apartments subject to rent regulation if their buildings were built before 1974 (which covers about a million units).
Those “reforms” also severely restricted how much of the costs for repairs and upgrades the landlord can pass along to new tenants as rent.
All that made it near-impossible for owners to recoup the money they’d have to spend to bring units up to code after a longtime tenant vacates; far better to just keep them off the market.
Take brothers Pashko and Tony Lulgjuraj, landlords in Washington Heights.
Two units in their five-story building would take thousands to fix up, but the law bars them from charging enough rent to cover that.
For example, rent in one two-bedroom unit, a would be capped at just $710 a month, not nearly enough to offset costs.
The result: Landlords like the Lulgjurajs have to warehouse units rather than lose money by fixing and renting them.
The Census Bureau counts 26,000 such “zombie” apartments as of last year — vacant even as would-be tenants would practically kill to get them; others put the count as high as 50,000.
Either way, the number would balloon under Mayor-elect Zohran Mamdani’s plans to freeze rents.
With help from the Institute for Justice public-interest law firm (which has taken 13 cases all the way to the US Supreme Court, winning 11 of them), the plaintiffs argue that these laws add up to an unconstitutional “taking” of property.
It’s hard to argue with that: By making it prohibitively expensive to rent their units, the law renders the apartments near-worthless.
Last year, the Supreme Court refused to hear a broader challenge to the rent laws: Those plaintiffs argued that, in requiring owners to renew nearly all leases and barring them from reclaiming more than one rent-stabilized apartment for their own, it, too, imposed an unconstitutional “taking” on landlords.
But even as the high court declined to confront the issue, Justice Clarence Thomas stressed that the “constitutionality of regimes like New York City’s” is a “pressing question,” arguing the Supremes should take up the issue “in an appropriate future case.”
This might be it: Since the apartments in the new suit are vacant, no tenants would lose out if the law were fixed; indeed, apartment-hunters would benefit, since more units would be available.
Watch out, New York politicians: If this obvious, everybody-loses injustice prompts the Supremes to eventually take up this case, they might feel logically compelled to completely toss the rent laws — especially if Mamdani imposes his freeze by the time they get the case.
We’ve long urged Albany to at least tweak the law so zombie apartments can be rented: The added risk of attracting the Supreme Court’s unwelcome attention should now make that fix a top priority for the Legislature.
Don’t say we didn’t warn you!
This story originally appeared on NYPost
