Court Finds Newburgh's Adoption of ETPA Null and Void

After the City of Newburgh adopted rent stabilization coverage under the ETPA on Dec. 18, 2023, a group of property owners sued the city and the DHCR, seeking a declaration that Newburgh's adoption of the ETPA was null and void. The court ruled for the owners, and found 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. Therefore, the city's reliance on incorrect, imprecise vacancy data in adopting ETPA coverage also lacked a rational basis. At a hearing before the court, the owners showed that the true vacancy rate in Newburgh was greater than 5 percent, and that the city's finding that the vacancy rate was below 5 percent was incorrect. Therefore, the ETPA was inapplicable as a matter of law and Newburgh's adoption of the ETPA was null and void. The court directed the owners to submit a proposed judgment while keeping a TRO granted on March 6, 2024, in effect until the judgment was entered.

Chadwick Gardens Associates, LLC v. The City of Newburgh: Index No. EF001874/2024 (Sup. Ct. Orange; 4/19/24; McElduff, J)[7-pg. document]