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 Legal
ARE RENT CONTROL LAWS UTNCONSTITUTIONAL?
By Trevor Burrus and Sam Spiegelman
he Cato Institute has filed an with them for a certain amount of time. Taken amicus brief in the Second together, the RSLs force landlords to rent to many Circuit in an important challenge tenants they don’t want to rent to, which is akin to New York’s rent control to the government essentially mandating that laws. Rent control is a silly and someone can occupy property against an owner’s counterproductive idea, but it will. While rent control laws are not a direct taking of also might be unconstitutional. property by the government, surely there would be
Economists have long known that rent control is a some point where a rent control law would be little
bad idea. Rent control, after all, is just a price ceiling, and price ceilings yield expected results: consumers over use the product and producers under produce it. If there was a price ceiling on, say, video games, people would be more willing to buy them and makers would be less willing to produce them. The result would be a shortage of video games.
Similarly, when rent control laws are in place, renters do not economize on their choices and landlords are reluctant to build and maintain their properties. Two people might cram into an apartment in San Francisco, but, if rent control mandates a lower price, then one person might decide to occupy the space while the other person takes up another apartment. The result is fewer rentable apartments. And the property owner, unable to get the market price for rent, is likely to not maintain the property or refuse to rent altogether.
In 2019, the New York legislature passed a series of amendments to its rent control laws, known as rent stabilization laws (RSLs). These are not the first amendments to the still controversial RSLs, though they are the most stringent in decades. One of the more egregious new provisions extends the eviction stay period even if the tenant is being removed for cause. The RSLs also maintain a tenant’s strange right to transfer their lease—without the landlord’s permission—to family members who have resided
different from a forced property transfer. If a New York landlord were forced to rent an apartment to someone for $50, that would amount to little more than a forced occupation.
Rent control laws are often based on a purported economic “emergency,” and New York’s are no different. The Supreme Court has heard cases challenging the constitutionality of “emergency” rent control laws. In 1921, in Block v. Hirsch, the Court narrowly upheld, by a 5–4 vote, a Washington D.C. rent control law that was enacted in the economic emergency after World War I. In his dissent, Justice Joseph McKenna rebuked the Court for allowing such an abridgment of property rights based on a proclaimed “emergency.” He wrote, “If such exercise of government be legal, what exercise of government is illegal? Houses are a necessary of life, but other things are as necessary. May they too be taken from the direction of their owners and disposed of by the Government?”
Three years later, in Chastleton Corp. v. Sinclair, the Court unanimously overturned the same D.C. rent control law on the grounds that the purported emergency of Block v. Hirsch had expired and Congress was not free to merely assert that the emergency still existed. Justice Oliver Wendell Holmes, who wrote the majority opinion in Block,
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