101 Gedney Street, Nyack

Nyack Landlords File Suit In Federal Court To Stop Vacancy Studies That Could Impose Rent Stabilization In Village

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Landlords, Along With Hudson Valley Property Owners Association, Say Vacancy Studies Under The ETPA Unfairly Punish Owners And May Yield Inaccurate Vacancy Rates

Though the Village of Nyack’s two attempts to impose rent stabilization under the Emergency Tenant Protection Act (ETPA) have yet to yield any rent restrictions, two local landlords and the Hudson Valley Property Owners Association (HVPOA) have gone to federal court to prevent a third attempt from bearing fruit.

Hudson Shore Associates Limited Partnership, the owner of 101 Gedney Street and Haven on the Hudson LLC, owner of 1 Haven Court have teamed up with a building owner in Poughkeepsie and the HVPOA, a nonprofit organization that operates as an association of landlords throughout the Hudson Valley, to have the recent amendments to the ETPA declared unconstitutional.

Plaintiffs filed an action for declaratory relief in federal district court in the Northern District of New York. Defendants include the Village of Nyack, the City of Poughkeepsie, New York State, and the New York State Division of Housing and Community Renewal (the agency that administers the ETPA with the local municipalities).

The ETPA allows any municipality to declare a rental “housing emergency” if it determines that a class of buildings with six or more units constructed before January 1, 1974 have a vacancy rate under 5 percent. With that finding, the municipality, with the NY Division of Housing and Community Renewal can impose rent stabilization on the buildings in that class. Rent stabilization mandates limited rent increases and automatic renewals of leases, restricting the landlord’s ability to raise rents or decline renewals of existing tenants.

Plaintiffs charge that the amendments to the ETPA requiring landlords to turn over extensive business records to municipal governments subject landlords to warrantless administrative searches and are unnecessarily overreaching – asking for information unrelated to determining current vacancies. Non-complying landlords are subject to fines and have no administrative remedies.

The 2024 amendments to ETPA include §8623(f), which provides: “A non-respondent owner shall be deemed to have zero vacancies.”

Plaintiffs claim that this amendment declaring non-complying landlords to have zero vacancies unfairly punishes complying landlords and could yield an inaccurate vacancy rate as those buildings likely have vacancies that affect the overall rate. In support of their claim, they cite Newburgh’s vacancy study and entry into the ETPA, which excluded vacancies in a sampling of buildings that if included would have yielded a vacancy rate over 5 percent.

Both Nyack and Poughkeepsie are in the process of conducting or revising vacancy studies under the amendments to the ETPA. Discussions at a recent public meeting in Nyack involved objections to the veracity of landlord submissions and challenges to the accuracy of the vacancy survey.

Nyack recently conducted two ETPA §8623 vacancy studies. It produced the first of its Vacancy Survey Reports last October. Nyack focused only on what were believed to be ETPA-eligible properties with 25 or more apartment units and found a vacancy rate of under 5 percent. Nyack declared a housing emergency and opted into the ETPA, only to have to rescind its election when the study improperly included a building built after 1974.

Nyack made a second attempt with a Vacancy Survey Report dated February 29, 2024, This study included all purportedly ETPA-eligible buildings with 12 or more apartment units, and yielded a vacancy rate of 6.115 percent, a rate not sufficient to institute the ETPA.  According to the lawsuit, Nyack continues to review that study and has indicated that it may implement a new study under the amendments to the ETPA hoping to find a class of buildings with a vacancy rate under 5 percent.

The lawsuit seeks to curtail the Village of Nyack, the City of Poughkeepsie and other municipalities in New York from conducting vacancy studies under the amended ETPA and seeks to have the presumption that non-responding landlords have zero vacancies declared unconstitutional and void.

According to its website, the HVPOA opposes the ETPA asserting that it creates a disincentive for investment in housing, precludes updating of older buildings most in need of maintenance and repair, deprives landlords of a return on their investments, and unfairly requires a small class of landlords to solve the larger societal problem of an inadequate number of housing units.

Last Thursday, the Appellate Division for the Third Department ruled against the HVPOA in its appeal of Kingston’s entry into the ETPA, affirming the city’s vacancy study and allowing tenants there to retroactively challenge rent increases dating back to 2019. The Court also affirmed a rent reduction passed by Kingston’s Rent Guidelines Board in November of 2022, a first in New York State’s history of a board exercising authority to reduce rents instead of increasing them.

Nyack Village Attorney Dennis Michaels said the Village does not comment on pending litigation.