Sometimes, we have to wait. Many involved in New York multifamily real estate have been doing exactly that since this past February, when the U.S. Court of Appeals for the Second Circuit heard combined argument on appeals from dismissals of two challenges to New York's rent stabilization laws in Community Housing Improvement Program v. City of N.Y. and 74 Pinehurst v. State of N.Y.

Those cases, and others since, assert, among other claims, that the latest version of rent stabilization, under the Housing Stability and Tenant Protection Act of 2019, is an unconstitutional taking, with the state having perpetually commandeered covered units, rather than just regulating tenancies, to provide, by the very language of the act, "affordable housing," with neither means testing for renting beneficiaries, nor recompense for owner providers. See Cmty. Hous. Improvement Program v. City of N.Y., 492 F. Supp. 3d 33 (E.D.N.Y. 2020). The Second Circuit's ruling is expected sometime this summer, the immediate question being whether the court will simply affirm the dismissals based on its own prior precedents upholding rent stabilization, such as Fed. Home Loan Mortg. v. N.Y. State Div. of Hous. & Cmty. Renewal, 83 F.3d 45 (2d Cir. 1996); W. 95 Hous. v. N.Y.C. Dep't of Hous. Pres. & Dev., 31 Fed. Appx. 19 (2d Cir. 2002).

In the 'Knick' of Time

The federal district court challenges to rent stabilization, though responding to HSTPA's enactment in June 2019, were just then facilitated by the Supreme Court's decision that same month in Knick v. Township of Scott, Pennsylvania, 139 S.Ct. 2162 (2019). Overruling high court precedent, Knick opened the federal courts to takings challenges without need for plaintiffs to first exhaust applicable state court remedies for obtaining compensation for claimed governmental takings, reasoning that takings claims vest when properties are taken by governmental action, and not when just compensation is later denied. Id. at 2167-68. The dissent in Knick—while perhaps presciently calling attention to the conservative majority's lax regard for stare decisis—worried that the ruling would open the floodgates on takings cases in the federal courts. Id. at 2188-89. Evidently, the majority was unbothered by that possibility. Id. at 2179.