Deregulation Applications Filed in 2019 Dismissed Due to HSTPA

Landlord applied for high-rent/high-income deregulation of three rent-stabilized apartments in its building in May 2019. The DRA dismissed the applications in August 2019, noting that the Housing Stability and Tenant Protection Act of 2019 (HSTPA) abolished deregulation of rent-stabilized apartments prospectively effective June 14, 2019.

Landlord appealed and lost. Landlord argued that the DRA's orders violated due process by retroactively applying newly enacted laws to proceedings concerning annual household income for 2017 and 2018, and rent thresholds reached before HSTPA was enacted. The DHCR pointed out that HSTPA and subsequent clarification issued in the "clean-up" legislation several weeks later, explicitly created an exception to the repeal of deregulation for units that had been lawfully deregulated prior to June 14, 2019. The apartments in question were still lawfully regulated on June 14, 2019, and therefore could no longer be deregulated by the DHCR order after that date. The fact that landlord's 2019 applications for high-rent/high-income deregulation would have been determined based on tenant income for 2017 and 2018, events that occurred before the passage of HSTPA, didn't matter since the apartments could not be deregulated after June 14, 2019.

This also was consistent with the 2020 Court of Appeals ruling in Regina Metro. LLC v. DHCR, which found that certain rent overcharge provisions of HSTPA were improperly retroactive but that didn't apply to high-income/high-rent deregulation cases. There was no retroactive application of HSTPA in these cases. There was nothing unconstitutional here, and no party had a vested right to any remedy under the Rent Stabilization Law. And the DHCR would not hold off on any ruling in these cases based on any pending appeal by landlords of constitutional challenges to the HSTPA.

231 East 76th Street, LLC: DHCR Adm. Rev. Docket Nos. HV410181RO, HV410178RO, HV410172RO (6/1/21)[6-pg. document]