Court strikes down city’s rent stabilization

By Alberto Gilman
Posted 4/24/24

Rent stabilization in the City of Newburgh was struck down Friday, April 19 by Orange County Supreme Court Justice Timothy McElduff. The ruling determined that the city resolution passed on December …

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Court strikes down city’s rent stabilization


Rent stabilization in the City of Newburgh was struck down Friday, April 19 by Orange County Supreme Court Justice Timothy McElduff. The ruling determined that the city resolution passed on December 18, 2023 and the adoption of city rent stabilization was null and void.

The court ruling follows the unanimous vote in December by Newburgh City Council declaring a housing emergency and allowing the ability to opt into rent stabilization. The vote in December allowed the city to opt into the rent stabilization program under the Emergency Tenant Protection Act (ETPA) of 1974.

The adoption of ETPA was only possible in Westchester, Rockland and Nassau counties until the Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed demographic restrictions. With the passage, municipalities in New York were able to opt into ETPA.

In order for a municipality to be deemed subject to rent stabilization, it must pass a local law that adopts the rent stabilization system. If a municipality wishes to opt into the overall program, there must be an identified less than five percent apartment vacancy rate. Under five percent can lead to the declaration of a housing emergency and ETPA adoption.

The city had conducted and released a rental vacancy study that found a 3.93% vacancy rate for eligible city properties.

A city rent control board would also be created and the city already recommended several members of the community to New York State for consideration for the particular board.

The following determinations were made and filed in the Orange County Clerk’s Office on Friday, April 19, 2024 at 4:26 p.m.: “This Court [Orange County Supreme Court] finds that the City undercounted its vacancies available for rent by a total of 12 units in the Vacancy Study and, as such, the Vacancy Study’s “Vacant Units Available for Rent” should equal 41, not 29,” the statement read.

“Therefore, of the 738 “Units Included in Survey,” the 41 actual vacant units available for rent yields an actual vacancy rate of 5.555%, not 3.930%.”

“Accordingly, Petitioners have demonstrated that the City’s calculation of the vacancy rate under its Vacancy Study lacked a rational basis and was calculated in an arbitrary and capricious manner and, consequently, the City’s reliance on incorrect, imprecise vacancy data in adopting the Resolution declaring a housing emergency under the ETPA also lacked a rational basis,” the statement continued. “Having shown that the true vacancy rate exceeded 5.0%, the ETPA is inapplicable as a matter of law and the Petitioners are entitled to a judgment declaring that the Resolution of December 18, 2023, is null and void and declaring that the adoption of the Emergency Tenant Protection Act rent stabilization in the City of Newburgh is null and void.”

Mayor Torrance Harvey said he was aware of the ruling on Friday and would need to sit down with the city’s legal team in order to figure out the next steps forward.

“The City of Newburgh will not be intimidated by deep-pocketed New York City real estate billionaires and their attempts to push vulnerable residents out of their homes,” said City of Newburgh Chief of Staff Mike Neppl. “We will initiate another vacancy study while the City Council is actively examining our avenues for appeal. This fight is far from over.”

The Plaintiffs-Petitioners identified in the filing were Chadwick Gardens Associates, LLC, Nutopia 203 Grand, LLC, and the Hudson Valley Property Owners Association. Richard Lanzarone, Executive Director of the Hudson Valley Property Owners Association said the ruling was a victory.

“This was a victory for property owners because it frees them from having their property taken for public benefit. This ETPA rent control law basically turns private property into essentially public property. It’s a taking,” said Lanzarone. “It’s a victory for tenants because the financial aspects of this ETPA law dictate that these properties will very quickly deteriorate and will lead to the deterioration of the living conditions in these buildings because it basically starves all these properties of the money needed to keep them properly maintained.”

“The issue in the case was that vacancies were reported to the city that were never recorded and reflected in the city’s ultimate report and calculation. When we looked through the responses that they actually received, we found that they haven’t recorded all of the vacancies that were reported to them,” continued Lanzarone. “They were subsequently informed that they had missed a bunch of vacancies and they never corrected their report. And when you actually correct for the missing or unrecorded vacancies, the vacancy rate changes and it now exceeds 5%. And therefore, the City of Newburgh does not have the statutory authority to enact ETPA.”

Local grassroots organizations such as the For The Many and the Mid-Hudson Valley Democratic Socialists of America (DSA) have appeared at city council meetings and other municipal meetings to advocate for renters and housing over the course of several months.

For The Many Political Coordinator Daniel Atonna expressed disappointment in a statement following the ruling. “The court’s decision to strike down Newburgh’s rent stabilization declaration, and the vacancy study that precipitated it, strips hundreds of tenants of hard-fought legal protections and threatens to make the city’s housing crisis worse,” said Atonna. “As a result of this ruling, rents are no longer frozen in Newburgh, and tenants no longer have protections from arbitrary eviction. Landlords can return to predatory rent hikes and evictions that force families from their homes. For the Many condemns the decision by the Orange County Supreme Court and the Hudson Valley Property Owners Association, which filed this lawsuit in a malicious attempt to deny tenants protections they are due under state law.”

“The vacancy study came only after months of organizing by For the Many and Mid-Hudson Valley DSA, and calls from hundreds of tenants across Newburgh to address the city’s ongoing crisis. This decision undermines the democratic process as well as basic tenants’ rights,” Atonna continued. “We call on the Newburgh City Council to appeal this decision to reinstate rent stabilization protections. We also call on the Council to immediately opt in to the Good Cause Eviction framework created by the state this year, in order to provide necessary protections against predatory rent increases and evictions for Newburgh tenants. While this court decision is a setback for renters in Newburgh, For the Many and our allies will continue organizing for tenants’ rights and housing justice.”