Judge Sharply Questions New York City Landlords on Rent-Freeze Challenge

Dow Jones
9 hours ago

A state judge pressed lawyers for New York City landlords on Wednesday about whether they could support their claim that the city's rent board engaged in a "sham process" to push through Mayor Zohran Mamdani's campaign promise to freeze rents.

Landlords are seeking to overturn a decision by the Rent Guidelines Board to ban increases on rents on stabilized apartments. They claim Mamdani illegally influenced the voting process of the board, which is tasked with acting independently to weigh data about tenant affordability and landlord costs such as insurance, fuel and taxes.

The plaintiffs allege the board, heavily stacked with Mamdani's appointees, instead cherry-picked data to deliver the mayor's desired outcome.

"They left landlords to drown," Randy Mastro, the lawyer who brought the lawsuit, said in court.

Justice Brendan Lantry pressed Mastro to substantiate his allegations against the city. Mastro, a former deputy mayor under Eric Adams, said Mamdani appointed a handpicked majority to the rent board upon taking office and held a private meeting with board members about the "true cost of living" in the city.

"This supposedly independent fact-finding body was spoon-fed by the mayor's office this crazy 'true cost of living' presentation," Mastro said. He also alleged the board intentionally ignored landlords' debt payments, which are often a significant portion of their costs.

"What can be done differently such that it wouldn't be a sham process?" Lantry asked Mastro, pointing out that it is legal for mayors to appoint their own board members to empty seats.

Lantry questioned Mastro on whether the Rent Guidelines Board has historically considered landlords' debt service. He also noted that the city's housing agency is allowed to communicate with the board.

And he asked Mastro whether he concedes that rent-stabilized apartment owners' net operating income-a measure of landlord profits that excludes their debt payments-increased. Mastro agreed that landlords' operating income increased based on the board's calculation, though he said that figure is artificially low, partly because it includes revenue from market-rate apartments in the same buildings.

Lantry also questioned the city's lawyers about the independence of the rent board and how it ultimately came to its rent-freeze decision. "Like when we were kids in math class, explain their work," he asked.

The city's lawyers pointed to months of records outlining the data and testimony that the Rent Guidelines Board considered ahead of its vote. The city said the board followed the law by weighing that data and using its discretion to arrive at its decision.

"It's a vote. It is not a mathematical equation or formula," said city lawyer Rachel Moston. "The board considered all of the data."

Lantry said that he would work to issue a final decision quickly given that the rent freeze is set to take effect in October.

The hearing is the second time this week the city has faced off against Mastro defending one of the mayor's key policy initiatives. Mastro is also suing Mamdani's administration for the messy rollout of the city's new tax on luxury second homes.

Nine months into Mamdani's first term, litigation has become the key weapon of Mamdani's opponents, many of whom were blindsided by his political momentum and now have little other recourse to challenge him.

The rent-freeze lawsuit was initially filed in Staten Island, the only borough that Mamdani lost in November's election. A judge later ordered that the case move to a Manhattan court after city lawyers argued that borough was the proper jurisdiction because that is where the rent freeze vote took place.

 

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