Luxury Deregulation Law Is Constitutional

(Decision submitted by Robert H. Berman and Jeffrey R. Metz of the Manhattan law firm of Borah Goldstein Altschuler & Schwartz, P.C., attorneys for the landlord.) Facts: Landlord applied to DHCR in 1994 for high-rent/high-income deregulation of tenants' rent-stabilized apartment. Tenants refused to verify their income in response to application. Tenants claimed that the portions of the rent stabilization law requiring income verification were unconstitutional because they denied tenants equal protection under the law. The DHCR ruled against tenants. Tenants admitted that their monthly rent was over $2,000 and that their annual household income for 1992 and 1993 was over $250,000. Tenants appealed. They claimed that the law treated them unequally because it based a determination of household income on federal adjusted gross income only. Tenants pointed out that other high-income tenants could be exempt from deregulation under the law, depending on the source of their incomes. Court: Tenants lose. The law bears a reasonable relationship to a legitimate purpose of the state legislature. So it must be upheld even if there is some inequality in its application. The purpose of the Rent Stabilization Law was to ensure affordable housing. The legislature found that high-income tenants shouldn't have the subsidies of rent-stabilized rents. Tenants didn't prove that the legislature's decision to use adjusted gross income as the measure of defining ``high income'' was arbitrary or capricious.

Leepson v. Holland: NYLJ, p. 26, col. 6 (12/18/96) (Sup. Ct. NY; Cahn, J)