Matter of Rent Stabilization Assn. of NY City Inc. v New York City Rent Guidelines Bd.
Annotate this CaseDecided on May 8, 2006
Supreme Court, New York County
In the Matter of Rent Stabilization Association of New York City, Inc., Jonsir Realty LLC and London Terrace Gardens, Petitioners,
against
New York City Rent Guidelines Board, Respondent.
114667/05
Plaintiff's Counsel:
Rosenberg & Estis, PC
733 Third Avenue
New York, NY 10017
212 867 6000
Defendant's Counsel
New York City Law Department
Corporation Counsel
100 Church Street
New York, NY 10007
212 788 0461
212 788 0303
Debra A. James, J.
Petitioner Rent Stabilization Association of New York City, Inc. ("the Association") seeks to annul or remand for consideration by the respondent New York City Rent Guidelines Board ("the Board") the Board's Order No. 37 dated June 21, 2005 on the ground that the Explanatory Statement issued in conjunction with such Order does not constitute "findings for the preceding calendar year" as mandated by Section 26-510 of the New York City Rent Stabilization Law ["RSL"] (Administrative Code of City of NY § 26-510). The Board now cross-moves to dismiss the Petition based upon objections of law alleging equitable laches and failure to state a cognizable claim.
The Emergency Tenant Protection Act of 1974 (L 1974, ch 576, § 4, as amended) ("ETPA") is the enabling legislation that establishes the Rent Guidelines Board in New York City pursuant to §26-510 of the RSL. RSL §26-510 provides in pertinent part: b. The rent guidelines board shall establish annually guidelines for rent adjustments, and in determining whether rents for housing accommodations subject to the emergency tenant protection act of nineteen seventy-four or this law shall be adjusted shall consider, among other things (1) the economic condition of the residential real estate industry in the affected area including such factors as the prevailing and projected (I) real estate taxes and sewer and water rates, (ii) gross operating maintenance costs (including insurance rates, governmental fees, cost of fuel and labor costs), (iii) costs and availability of financing (including effective [*2]rates of interest), (iv) over-all supply of housing accommodations and over-all vacancy rates, (2) relevant data from the current and projected cost of living indices for the affected area, (3) such other data as may be made available to it. Not later than July first of each year, the rent guidelines board shall file with the city clerk its findings for the preceding calendar year, and shall accompany such findings with a statement of the maximum rate or rates of rent adjustment, if any, for one or more classes of accommodations subject to this law, authorized for leases or other rental agreements commencing on the next succeeding October first or within the twelve months thereafter. Such findings and statement shall be published in the City Record. (Emphasis added.)
Respondent is an administrative agency of the City of New York authorized pursuant to RSL §26-510 to perform the quasi-legislative function of establishing, inter alia, annual guidelines for rent stabilized apartments and lofts in New York City, and promulgated Order No. 37.
Petitioners are a trade association representing 25,000 property owners and/or managing agents who own and/or manage approximately one million apartments in New York City, most of which are rent stabilized, and two member owners of buildings containing 45 and 600 rent stabilized apartments on the East Side and West Side of Manhattan, respectively. Petitioners claim that they are aggrieved by the Board's Order No. 37 dated June 21, 2005, that sets the maximum rates of rent adjustments for one- and two-year leases commencing October 2, 2005 and September 30, 2006, contending that the Board did not file its findings for the previous year as mandated by RSL §26-510.
On a motion by a respondent to dismiss a petition in an Article 78 proceeding, only the petition may be considered and what is alleged there must be assumed to be true. Felice v Swezey, 278 AD 958 (2d Dept 1951). Stated another way, the administrative agency that moves to dismiss the petition as a matter of law for failure to state facts sufficient to constitute a cause of action, admits for the purposes of that motion the facts stated in the petition. Schwab v McElligott, 282 NY 182, 185-186 (1940).
Both parties cite In the Matter of New York State Tenants & Neighbors Coalition, Inc., v New York State Division of Housing & Community Renewal (18 AD3d 875 [2d Dept 2005]) in support of their positions. In Tenants & Neighbors, the appellate court held that the failure of the Nassau County Rent Guidelines Board to file "findings for the preceding calendar year" as mandated pursuant to ETPA §4 (b) was arbitrary and capricious. Implicit in that holding is a determination that the allegation of such an omission states a cause of action under CPLR Article 78. However, the facts alleged in Tenants & Neighbors are otherwise distinguishable from those alleged in the petition now before this court. In Tenants & Neighbors, the appellate court found that the Board offered "only a generic list of items so broad as to remain virtually unchanged over a period of years", which it determined as a matter of law were not "findings." Id. at 877-878. Based on this insufficiency, the court remanded the matter to the agency for the adoption of "findings" in compliance with the statute.
Were the comparison to stop there, the court would rule in favor of petitioners. However, the petition at bar is otherwise entirely distinguishable on its face from what was alleged in [*3]Tenants & Neighbors. Here, deeming all of the petition's factual allegations as true and admitted by the respondent-movant, this court finds that read as a whole, the petition fails to allege a cognizable claim. The Explanatory Statement attacked by the Association contains specificity of factual data and information, which were wholly absent from what the Nassau Guidelines Board cited as findings. Among the factual details specified in the Explanatory Statement are summaries of year 2005 reports on (1) the price index for operating costs that "measures the price change for a market basket of goods and services which are used in the operation and maintenance of stabilized buildings," (2) an income and expense review using a sample size of 12,000 buildings, (3) mortgage interest surveys, and (4) consumer price index for the New York Northeastern New Jersey Metropolitan area from 1998 through 2005. Moreover, the Explanatory Statement provides excerpts from oral and written testimony from tenants and tenant groups, from owners and owners groups, and from public officials. Noteworthy is that the Board used the identical format of Explanatory Statement, which it updated for Order No. 37, as it did for Orders Nos. 35 and 36 covering the periods between October 1, 2003 and September 30, 2004, and October 1, 2004 and September 30, 2005. Those Orders elicited no challenge from the petitioners, and it may well be significant that the Board determined that higher maximum rent increases were justified in those prior years. In any event, petitioners are not entitled to the relief they seek, which would be a remand to the Board to adopt "findings".
The petition's failure to state a cause of action is dispositive of this proceeding. The court need not reach the laches question raised by the respondent. Nevertheless, laches on the part of the Association has not been established. Had the Association prevailed on the adequacy of its pleadings, its remedy would have at most resulted in a remand for the purposes of the Board adopting findings. As in Tenants & Neighbors, it is clear on the record before this court that in arriving at its determination, the Board gave proper consideration to all of the relevant factors set forth in RSL § 26-510. In addition, the slight prejudice from any minor delay implicating the interests of respondent and rent stabilized lease holders is not at all comparable to prejudice that the court found established laches in Rumack v McNamara, 195 Misc 84, 89 (Sup Ct, NY County 1949) affd 275 AD 805 (1st Dept 1949) and Matter of Save the Pine Bush, Inc., v New York State Dept. of Environmental Conservation, 289 AD2d 636, 638-640 (3d Dept 2001).
Accordingly, it is ordered that the cross-motion is granted and the petition shall be dismissed.
Dated: May 8, 2006 ENTER:
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J.S.C.
APPEARANCES OF COUNSEL
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