Tenant Association Has No Standing to Challenge Determination of Housing Company's Capital Structure

The Tenant Association of an affordable housing community governed by PHFL Article IV challenged an approval letter issued by the DHCR in September 2022, arguing that the decision set forth in that letter violated CPLR Sections 7803(1), (2), and (3). The letter decided eight issues concerning the capital structure of the Knickerbocker Housing Company. So, the letter could be deemed as a final and binding decision that can be challenged if the Association had incurred injury. The group of 12 member tenants claimed the following injuries: the right to be heard at future budget hearings, dilution of its bargaining power, alleged financial repercussions from the equity change, and the potential rent increase.

The court ruled against the Tenant Association. Tenants were wrong to say that the rent increase in question would fixate on a compound 2.5 percent upward trajectory after the three-year rent freeze period ended because 2.5 percent is only the upper limit for a rent increase. So there was at present no "injury in fact." The court also failed to see the connection between the equity change in the housing company and the possible financial repercussions vehemently argued by the Association. In addition, as pointed out by the DHCR, no statute or contract has ever guaranteed the Association a certain amount or degree of bargaining power in the first place. A non-guaranteed power can't be the basis to establish standing even if that power has somehow diminished since the Association didn't have a right from the beginning. Finally, any tenant has the right to be heard at future budget hearings.

Concerned Tenants of Knickerbocker Vill. v. DHCR: Index No. 154878/2022, 2023 NY Slip Op 32473(U)(Sup. Ct. NY; 7/20/23; Frank, J)