Court Opinion

ID: 5519855
Source: CourtListenerOpinion
Date Created: 2022-01-10 17:41:57.026089+00
Date Added: 2024-06-11T08:34:23.518750
License: Public Domain

Burke, J. (dissenting).
The relief sought in these actions brought to declare unconstitutional that part of the Local Emergency Housing Rent Control Act (L. 1962, ch. 21) which prohibited any increases in rents to which property owners might be entitled under the Emergency Housing Rent Control Law prior to May 1,1962, when the State transferred administration of residential rent control to the city, should have been granted because the police power may not be used to serve mere expediency.
When the State has assumed to regulate the private property of a citizen of the United States, it is under an obligation to act justly. It is not a question of a citizen’s vested rights in legislation, it is simply recognition of the rules of fair play which were observed before there were any formal laws. In this country a citizen has a right to expect that the rules imposed by the State which interfere with the use of his private property will not be changed by the State to his detriment after he has complied with the regulations, except for extremely serious reasons.
*267Freezes and roll backs of rent increases which were granted by a Legislature after years of study are rarely warranted at this late stage of the emergency which was declared almost 20 years ago. Here the Legislature has superimposed a freeze on a freeze.
Although each of the plaintiffs-appellants stands in a somewhat different factual position, the constitutional issue presented, for practical purposes, is identical.
I. L. F. Y. Co., 425 Realty Associates and Eager Realty Corp. filed applications for rent increases based upon the sales price of their properties nearly a year before the effective date of the 1962 amendments to the law, which barred the issuance of orders for such rent increase by the State agency even if due; 0 ’Brien filed a similar request based on a legislatively granted right to an increase in rents on the equalized assessed valuation of his property four months prior to an unauthorized order of the Governor suddenly halting action on such application and over seven months before the effective date of the “freeze ”. All have been unable to obtain orders for the increased rentals to which they are entitled under the 1961 law, as a result of the statutory “ freeze ”.
Barget Realty Corporation filed its application based on substantial prior expenditures for capital improvements and rehabilitation of its property. These had been made in reliance on representations of the Rent Commission that the proposed improvements, upon their completion, would merit increases in rent.
The basic question which we are called upon to answer is whether this amendment of the State rent control statute providing for the elimination of rent adjustments which in each case had been legislatively authorized and could be easily determined is reasonable and consonant with a permissible exercise of the police power of the State. We do not believe that it is.
Were it not for the temporary nature of the rent control law, enacted under the police power of the State, and limited to periods of emergency, it would be unconstitutional (People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429; Orinoco Realty Co. v. Bandler, 233 N. Y. 24, 29). We said as long ago as *2681950 that “ [t]he State rent control statute was enacted to meet a passing emergency ” (Teeval Co. v. Stern, 301 N. Y. 346, 362). In Lincoln Bldg. Associates v. Barr (1 N Y 2d 413, 420) six years ago this court again stated that ‘ ‘ Rent controls, all will agree, ought not to achieve a status of permanence in our economy. They have no justification except in periods of emergency [cases cited].”
Such an exercise of the police power must, to he valid, be reasonable. To meet that test, the means adopted must be reasonably necessary to accomplish an objective falling within the scope of the police power (see Good Humor Corp. v. City of New York, 290 N. Y. 312, 317; 9 N. Y. Jur., Constitutional Law, § 176).
Here “ The only matter that seems to us open to debate is whether the statute goes too far.” (Block v. Hirsh, 256 U. S. 135, 156.) So far as that query is concerned, there is nothing factual in connection with chapter 21 of the Laws of 1962, such as the threat of spiraling rents which justified the deferment in 1961, which indicates what threatening condition impelled the Legislature to incorporate the “ freeze ” in the law, and no legislative history, in the form of letters or debates, has been presented to us to assist in determining intent.
If we apply the standards heretofore respected, the “ freeze ” provision of the rent control law seems to us to go too far.
We realize that the Local Emergency Housing Rent Control Act is not a static law (L. 1946, ch. 274; L. 1950, ch. 250; L. 1951, ch. 443; L. 1953, chs. 320, 321; L. 1957, ch. 755; L. 1959, ch. 695; L. 1961, ch. 337). However, the repeated amendments were each made to meet a necessity and to prevent uncertainty, hardship and dislocation. In other words, each restriction was 1 ‘ reasonably adapted to accomplish its purpose ” (People v. Arlen Serv. Stas., 284 N. Y. 340, 344). Rent control is a complex program, but one aimed, as respondents concede, at eventual but orderly restoration of a free market in housing accommodations. To this end the Legislature approved the fixing of rents through the use of sales price or the equalized assessed valuations or the cost of carefully prescribed physical improvements to the property.
The statute states that its provisions are necessary “ in order to prevent uncertainty, hardship and dislocation [and are] designed to protect the public health, safety and general wel*269fare ” (§ 1, subd. 1). Respondents suggest, without factual support, that the provision under consideration was intended to be in aid of the transition of controls from the State to the city. But, a “ freeze ” on only a portion of the work of the administration—the issuance of orders in one class of applications—i.e., rent increases authorized by law—cannot rationally be held to contribute to a smooth or orderly transition of responsibility.
This legislation has accomplished the opposite result. It has engendered disorder by placing an obstruction in the way of the normal processing of the applications by the State Rent Commission. It has caused the machinery of rent controls to be put out of joint by damming up the natural flow of applications and creating an extraordinary backlog of matters entitled to attention, while, at the same time, it induced idleness in the State agency which was fully staffed and capable of disposing of the business it was created to administer. It imposes unwarranted hardships on the appellants and gives rise to grave uncertainties. By rendering the existing laws impotent it nullified the prior legislative acts upon which the constitutional validity of the rent law depended.
‘ ‘ To sustain legislation under the police power the operation of the law must in some degree tend to prevent offense or evil, or preserve public health, morals, safety or welfare and it should appear that the interests of the public generally are served and that the means used are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. (Ives v. South Buffalo Ry. Co., 201 N. Y. 271, 301; Dobbins v. Los Angeles, 195 U. S. 223, 236.) The test is whether the regulation is reasonable within those limits.” (Matter of Avon Western Corp. v. Woolley, 266 App. Div. 529, 533, affd. 291 N. Y. 687.)
It is manifest that this suspension was unconstitutionally onerous in the-circumstances of the I. L. F. Y. Co., the 425 Realty Associates and the Eager Realty sales price type of applications where increases in rents previously provided for had been delayed for one year because of the deferment recently sanctioned by this court (I. L. F. Y. Co. v. Temporary State Housing Rent Comm., 10 N Y 2d 263); wrongfully extends the invalid *270executive denial of the relief specifically allowed to property owners by the prevailing law in the O’Brien case, and is patently confiscatory in the Barget Realty Corporation case.
Where the Legislature has determined that landlords are entitled to a fair return on their investment (cf. People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429, 443, 444), set up standards and the apparatus for such a result, and the Administrator has concluded that appellants are entitled to a rent increase, when, for a reason politic rather than just that result has been denied to them, there is a deprivation of property without the corresponding requisite showing of a public necessity.
The circumstances which were present in Teeval Co. v. Stern (301N. Y. 346), where a rent freeze for a period of one year was held to be constitutional, were diametrically different. Here it is not the receiving agency, in need of time to study, that has imposed the freeze, but the well-established and experienced one which is relinquishing control and which is consequently under no disability to continue administration of its own law as it has done in the past and continues to do in other areas, even at the present time.
The State made itself responsible for rent control until May 1, 1962. So long as it continued to control appellants’ rentals it could not shirk the responsibility it had accepted and constitutionally keep the “ Machinery [which] is provided to secure to the landlord a reasonable rent ” (Block v. Hirsh, 256 U. S. 135, 157) motionless, where, as here, it was guided obviously by whim.
Accordingly, the order and judgment in each action should be reversed.
Judges Dye, Fuld, Froessel and Van Voorhis concur with Chief Judge Desmond; Judge Burke dissents in an opinion in which Judge Foster concurs.
Judgments and order affirmed.