RENT REGULATIONS AFTER CEDAR POINT

In 2021, the Supreme Court decided Cedar Point Nursery v. Hassid, a landmark case that established a new categorical rule in takings law: When the government enacts a regulation authorizing a temporary invasion of a property owner’s land, it effects a per se taking under the Fifth Amendment for which it must pay just compensation. By examining the interaction between this holding and legal challenges to New York’s Housing Stability and Tenant Protection Act (HSTPA) of 2019, this Note explores the implications of the Court’s decision for rent regulation legislation. This Note considers alternative analytical paths a court considering rent regulation legislation could pursue in the wake of Cedar Point. Under a maximalist approach, a court could find that the HSTPA infringes on the landlord’s “right to exclude” and is thus a compensable taking. Under a minimalist approach, a court could apply one of the Cedar Point exceptions to uphold the HSTPA as constitutional. Ultimately, this Note argues that the maximalist approach is at odds with precedent, endangers antidiscrimination housing laws, and hampers the government’s ability to make housing more economically accessible for citizens who may not otherwise have access to adequate shelter. It concludes that courts should apply an expansive reading of the Cedar Point exceptions when confronted with constitutional challenges to rent regulation legislation like the HSTPA.†

The full text of this Note can be found by clicking the PDF link to the left.

* J.D. Candidate 2023, Columbia Law School. I am grateful to Professor Jedediah Purdy for his invaluable guidance, Professor Kate Andrias and Susannah Cohen for helpful comments on earlier drafts, and the staff of the Columbia Law Review for their excellent editorial work. All errors are my own.
† This Note describes pending litigation on the question of whether New York’s Rent Stabilization Law as amended by the HSTPA constitutes a taking under Cedar Point. As this Note went to print, the United States Court of Appeals for the Second Circuit issued a decision in 74 Pinehurst LLC v. New York, Nos. 21-467(L), 21-558(Con), 2023 WL 1769678 (2d Cir. Feb. 6, 2023), holding that it does not. For comments on the Second Circuit’s decision and its impact on this Note’s analysis, see infra Addendum.

Introduction

New York City has a long history of robust rent regulation laws. 2 For a detailed history of New York City’s rent control laws, see W. Dennis Keating, Rent Regulation in New York City: A Protracted Saga [hereinafter Keating, A Protracted Saga], in Rent Control: Regulation and the Housing Market 151, 151–64 (W. Dennis Keating, Michael B. Teitz & Andrejs Skaburskis eds., 1998) [hereinafter Rent Control: Regulation and the Rental Housing Market]. In 2019, the state legislature passed the Housing Stability and Tenant Protection Act (HSTPA), which further strengthened the city’s rent regulation regime. 3 Housing Stability and Tenant Protection Act of 2019, ch. 36, 2019 N.Y. Laws 154 (codified as amended in scattered sections of N.Y. Laws (McKinney 2022)). Landlords immediately launched a series of legal challenges to the law under the Fifth Amendment, all of which were dismissed based on Supreme Court precedent upholding rent control as constitutional. 4 See infra section II.B. After Cedar Point, however, this precedent appears less certain. The plaintiffs whose suits were dismissed have since appealed, citing Cedar Point as confirmation that New York City’s rent regulation regime constitutes a compensable taking under the Fifth Amendment. 5 See infra section II.D.

This Note analyzes the various approaches that the Second Circuit, or any court considering an analogous regulation, could take when applying Cedar Point to the rent regulation context. Part I provides context for this discussion by reviewing the regulatory and physical takings doctrines under the Fifth Amendment, describing rent control and various academic arguments that have been advanced for and against it, and detailing the legal challenges levied against rent regulation regimes under the Fifth Amendment. Part II considers the impact of the HSTPA on New York’s rent regulation laws, describes the unsuccessful challenges to its constitutionality prior to Cedar Point, discusses the Cedar Point decision as a turning point in takings law, and surveys the renewed appeals brought against the HSTPA after the decision came down. Part III presents various analytical alternatives the court could pursue and considers the normative implications of each approach. Under a maximalist approach, the court could find that the HSTPA infringes on the landlord’s “right to exclude” and is thus a compensable taking under Cedar Point. Under a minimalist approach, the court could apply one of the Cedar Point exceptions to uphold the HSTPA as constitutional. Ultimately, this analysis reveals that adopting the maximalist approach is at odds with Supreme Court precedent, whereas the minimalist approach accords with settled law. This Part further argues that the minimalist approach is not only the best reading of the Cedar Point opinion as a doctrinal matter but is also more desirable from a policy perspective because it preserves the government’s ability to address housing affordability and to enact antidiscrimination housing laws. This Note therefore concludes that the Cedar Point exceptions both can and should be read to encompass legislation regulating relations between landlords and tenants.