NY’s Top Court Weighs In on Kingston’s ETPA, Rent Control, and Changes

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ALBANY, N.Y. — On Thursday, judges from New York State’s top court questioned lawyers representing the city of Kingston and an organization advocating for landlords. The discussion centered around the potential fate of Kingston’s Emergency Tenant Protection Act provisions safeguarding tenants along with the possibility of a 15% retrospective rent decrease.

The judges at the state Court of Appeals listened to arguments presented by Barbara Graves-Poller, who was serving as Kingston’s Corporation Counsel, and Magda L. Cruz, representing the Hudson Valley Property Owners Association. The judges, comprising a seven-member panel, posed many queries to both Graves-Poller and Cruz during their presentations.

* \u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009Shrestha bill would make it easier for municipalities to opt into rent control\u0009\u0009\u0009\u0009\u0009\u0009\u0009

* \u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009\u0009Kingston to conduct new vacancy study used to establish rent control\u0009\u0009\u0009\u0009\u0009\u0009\u0009

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Cruz restated the arguments previously made by the Hudson Valley Property Owners’ Association in lower courts, asserting that City Director of Housing Initiatives Bartek Starodaj’s vacancy study was fundamentally flawed, included inaccuracies, and does not justify declaring a housing crisis. Additionally, she contended that the Kingston Rent Guideline Board’s decision in 2022 to decrease rents in controlled properties by 15% is unlawful according to New York State’s Emergency Tenant Protection Act. Cruz emphasized her worry about how this ruling could establish a statewide precedent.

Cruz argued that the state Court of Appeals Decision that upheld ETPA and the vacancy study was based on numerous factual errors

Justice Jenny Rivera questioned whether there was a record of support for that conclusion about the lower court’s decision. Justice Anthony Cannataro then asked Cruz to present evidence on record that the vacancy study was inaccurate.

Cruz contended that the study encompassed numerous units not covered by ETPA and left out “countless others.”

Rivera stated, “Weren’t there indications that they were instructed not to take part, and wasn’t there some benefit in abstaining from participation?”

Cruz repeated the Hudson Valley Property Owners’ Association’s argument throughout its legal battle with the city that the city’s 2022 study, which led to a 1.57% vacancy rate, declaration of housing emergency and opting into ETPA, was full of “material errors.”

Justice Madeline Singas questioned what rationale Cruz used to make this determination.

“Even if you include the units that weren’t part of this research, wouldn’t the vacancy rate likely remain below 5%?” Singas asked.

Cruz contended that the research failed to account for multiple “large structures” and included extensively modified properties predating 1974, which thus fell outside the jurisdiction of the ETPA’s regulations applicable to constructions initiated before that year.

The organization asserts that their research on vacancy rates indicates a figure of 6.22%, which exceeds the 5% threshold required to declare a housing crisis and surpasses the city’s reported rate of 1.57%.

Rivera asked about the timeline for the city’s upcoming vacancy study. Cruz responded that they intend to carry out a new study this year.

The Hudson Valley Property Owners Association has expressed support for the new study, whereas tenant advocacy groups such as the progressive organization For the Many, concerned citizens, and certain municipal legislators have demanded its cancellation due to concerns about potential landlord manipulations aimed at removing ETPA protections within the city.

When Graves-Poller testified in support of the vacancy study, she contended that throughout the study period, the city contacted 92 percent of property owners and conducted the necessary public meeting. She also mentioned that she was not convinced by the landlords’ claim that they were unaware of the vacancy study.

Rivera bombarded Graves-Poller with a barrage of inquiries regarding the vacancy study and the creation of the ETPA.

Graves-Poller stated that the city conducted a sensible data gathering initiative, and the Common Council made diligent attempts to utilize this information for declaring a housing crisis and setting up the city’s Rent Guidelines Board. According to her, the American Community Survey indicated vacancy rates below 1% back then, whereas the city’s population changes were widely recognized, drawing even the focus of major nationwide news organizations.

Cruz then took the stand to argue against a 15% rent reduction granted to tenants in ETPA buildings by the Kingston Rent Guidelines Board.

“There was no appropriate evidence addressing rising costs and inflationary and economic pressures,” she said. “How the board imposed rent reduction and reduced fair-market rent immediately by 15% was totally irrational and inconsistent, like the vacancy study and was determined contrary to law.”

She argued there’s nothing in the state ETPA statute that allows for a rollback of rents, and noted it was the first and only time this ever happened in state history.

Rivera remarked that the issue being discussed revolved around the legality of the action rather than who initially performed it.

The justices likewise listened to arguments presented by lawyers representing the state’s Department of Homes and Community Renewal, which oversees ETPA, concerning the extent to which rent reductions should be applied retrospectively, as well as input from the progressive organization Citizen Action of New York.

The Court of Appeals did not provide any timeline for delivering its ruling.

The Hudson Valley Property Owners Association submitted an appeal to the Court of Appeals on November 24, 2024.

The Appellate Division of the state Supreme Court has already ruled in Kingston’s favor.

In August 2024, the Hudson Valley Property Owners Association received approval from the Appellate Division of the state Supreme Court to challenge that court’s ruling dismissing their lawsuit at the state Court of Appeals.

In April 2024, the group lodged an appeal against the decision of the Appellate Division, which had endorsed the city’s rent control vacancy survey and reinstated the Rent Guidelines Board’s choice from 2022 to decrease rents for rent-stabilized tenants by 15%.

The Hudson Valley Property Owners Association had asked the same court to allow it to re-argue its case in favor of its claims. Barring that, the association wanted the Appellate Division to “grant us leave to present the case to the Court of Appeals,” Lanzarone said at the time.

On March 21, the state appellate court division affirmed the city’s approval of the rent control vacancy survey and reinstated the Rent Guidelines Board’s ruling from 2022 to decrease rents for rent-stabilized tenants by 15%.

Kingston has become the first town in state history to cut rents. The judges all agreed that Kingston properly implemented the 2019 Emergency Tenant Protection Act.

In May 2023, the Hudson Valley Property Owners Association appealed a state Supreme Court judge’s decision that denied its challenge questioning the city’s declaration of a housing emergency, which allowed for rent control.

The organization appealed to the Appellate Division to reverse the judgment issued by Supreme Court Judge David Gandin on February 10, 2023, which permitted the municipality to enforce rent control measures for both renters and property owners.

Back then, Gandin determined that the ruling made by the Rent Control Guidelines Board to decrease all rent hikes of 16% or higher by 15%, effective from January 2019, should be overturned. Additionally, he mandated that the board needed to establish fresh regulations setting a cap on rent increase percentages.

A group of landlords and property owners filed a lawsuit against the city in October 2022 following its choice to label a housing crisis and enforce rent control measures in Kingston.

In 2022, the Rent Guidelines Board came into existence following the adoption of a resolution by the Common Council. This declaration marked Kingston as being under a housing emergency and chose to follow the guidelines set forth by the Emergency Tenant Protection Act. According to this act, these regulations apply specifically to structures built prior to 1974 with at least six residential units.

The legislation permits local governments to implement rent control measures, and it initially applied solely to New York City along with Nassau, Westchester, and Rockland counties.

The state Legislature passed the Housing Stability and Tenant Protection Act in 2019, which allowed for the ETPA’s reach to be extended to any city, town, or village in the city.

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