California landlords wanted the Supreme Court to limit rent control laws. They won’t — for now

The California Apartment Association urged the court to hear a major property-rights challenge to tenant protections in NYC

The Supreme Court on Tuesday declined to hear a challenge to New York’s rent control and eviction laws, putting an end to a case that might have had dramatic implications for California cities’ own tenant protection measures.

A group of New York landlords had sought to overturn the state’s Rent Stabilization Law, arguing that its price and eviction controls violated the Constitution’s “takings clause,” which protects against the government taking private property without just compensation. The California Apartment Association and the San Francisco Apartment Association submitted an amicus brief in support of the New York landlords.

“It’s disappointing that they’re not going to hear the case,” said Whitney Prout, executive vice president of legal affairs for the California Apartment Association said of the court’s decision.

The case, 74 Pinehurst LLC vs. New York, is the third challenge to rent control the Supreme Court has declined to hear in the last year. In October, the court rejected two related challenges by the landlord group, holding that rent laws fall within the government’s right to regulate land use.

But Justice Clarence Thomas, a conservative, left the door open to future cases on rent control.

“The constitutionality of regimes like New York City’s is an important and pressing question,” Thomas wrote in a statement, saying that for “an appropriate future case,” the court should hear an appeal to “address this important question.”

That gives Prout hope the case could be taken up by the conservative-majority court sometime soon.

“The fact they haven’t taken prior cases I don’t think is a bar to future cases,” she said.

The California Apartment Association is currently bringing its own case against Alameda County in federal court, arguing that its eviction moratorium violated property owners’ rights.

Several Bay Area cities have adopted rent control laws in the last several years — including, most recently, the city of Concord, which last week approved an ordinance capping annual rent increases to 3%, or 60% of inflation, whichever is lower, for multifamily units built before 1995. The California Apartment Association fought hard to block the law.

Tenant advocates are pushing to put rent control measures on the ballot in San Pablo, Pittsburg, Larkspur and Redwood City. In 2019, the California legislature passed statewide rent control, limiting rent increases to 10% or 5% plus regional inflation, whichever is smaller.

Advocates see the laws as necessary to protect renters from getting priced out of their homes, especially in one of the most expensive rental markets in the country. But property owner groups say the measures, while helpful to tenants in the short term, lead to less construction of new homes, reducing the rental stock and therefore making rent more expensive long-term.

Several other cases before the court this year could change housing law in California. The Supreme Court is weighing a challenge to “impact fees,” the fees slapped onto new developments to help pay for the roads and sewer lines required to support them, which developers disapprove of because they can add hundreds of thousands of dollars to the cost of a housing project. In April, it will hear arguments on whether cities can fine or arrest homeless people camping outside if the city does not provide other shelter space.