New York Appellate Court Upholds Kingston City's Order To Cut Back Rents By 15%

A New York appellate court upheld the city of Kingston's rent stabilization order, which mandates an immediate 15% rent reduction for tenants. On Thursday, the court affirmed that the guidelines board had the authority to order the rent reduction, overturning a previous decision by a lower court that had halted the unprecedented rent decrease last year. This made Kingston the first municipality in state history to implement such a reduction in 2022. 

City officials and tenant advocacy groups are calling it a win for renters statewide, setting a precedent for other states. Initially contested by a coalition of landlords who claimed the city had conducted the housing study improperly, the board's vacancy survey and the decision to roll back stabilized rents faced scrutiny.

According to a report by the Daily Freeman, the group intends to legally challenge the rent reduction should it be enforced.

What is Kingston’s rent stabilization order?

In 2022, Kingston adopted rent stabilization, following its housing vacancy survey, which revealed that approximately 1,200 units eligible for rent stabilization had a vacancy rate of 1.57%. According to state law, a New York municipality can implement rent stabilization measures if the vacancy rate in buildings with six or more units constructed before 1974 falls below 5%.

In a move fairly uncommon among upstate municipalities, the city's Rent Guidelines Board decided to freeze rents for one- and two-year leases at rent-controlled apartments.

The guidelines pertained to properties subject to the Emergency Tenant Protection Act. This applies to 64 buildings housing approximately 1,200 rental units in the city, where rents have seen a significant increase in recent times.

Following Kingston's decision, a coalition of landlords called the Hudson Valley Property Owners filed a lawsuit to challenge the rent control and reduction law. They argued that the survey was flawed, as the board only surveyed a third of city property owners and classified properties where landlords did not respond as fully occupied.

Last year, a lower court ruled that Kingston's Rent Guidelines Board (RGB) lacked the authority to unilaterally reduce rents. The court invalidated the 15% rent reduction order before it could take effect.

The Recent Ruling

In the latest ruling, the state Appellate Court's division upheld the city's rent control vacancy survey and reinstated the board's 2022 decision to decrease rents. The five-justice panel highlighted that nothing in the state statute prohibited the city from voting for a rent reduction instead of an increase, as reported by Law360.

"The Appellate Court’s concise and thoughtful decision provides hope and support for our tenants here in Kingston who have been suffering during this housing crisis," Kingston Mayor, Steve Noble, said in a statement.

Noble emphasized that their initiative will curb exorbitant rent increases by landlords during a period of critically low vacancy. He asserted that the ruling establishes a precedent for the entire state of New York, demonstrating that communities can conduct comprehensive vacancy studies and have the authority to declare a housing emergency.

In contrast, Richard Lanzarone, the executive director of HVPOA, expressed that the appellate court's ruling was based on inaccuracies from the 2022 vacancy survey. He alleged that the city's housing director misrepresented facts, providing them with grounds for a potential future appeal.