Stein v. Rent Guidelines Board

127 A.D.2d 189, 514 N.Y.S.2d 222, 1987 N.Y. App. Div. LEXIS 41500
Appellate Division of the Supreme Court of the State of New York·Decided April 9, 1987·Published·Cited by 9 cases

Opinion

OPINION OF THE COURT

Ross, J.

At issue on this appeal is whether seven orders approved in 1980 and 1981 by the New York City Rent Guidelines Board (Board) were lawfully promulgated, pursuant to that Board’s powers, under the New York City Rent Stabilization Law (RSL) (see, Administrative Code of City of New York § YY511.0 et. seq., as added by Local Laws, 1969, No. 16 of City of New York, as amended; Emergency Tenant Protection Act of 1974 [L 1974, ch 576], as amended). The contested orders dealt with rent increases, fuel adjustment surcharges, vacancy increase allowances, and electrical inclusion adjustments.

Our research indicates that there is significant legal authority to indicate that, when it decided the permissible levels for rent increases, the Board was performing a quasi-legislative function (Matter of Metropolitan Hotel Indus. Stabilization Assn. v New York City Rent Guidelines Bd., Sup Ct, NY County Mar. 27, 1985, Burton Sherman, J., Index No. 21444/ 1984, affd 111 AD2d 650 [1st Dept 1985]). Almost 40 years ago, the Court of Appeals, in Wasservogel v Meyerowitz (300 NY 125, 132 [1949]), held that setting "the maximum amount [of rent levels for residential tenants] is * * * a legislative act”.

The New York City Council has stated that the purpose of enacting the RSL was to, inter alia, "prevent exactions of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering” (Administrative Code § YY51-1.0). Furthermore, by the terms of this statute, the responsibility for implementing the RSL’s policy was given to "an agency of the city itself’, which was the Board (see, Administrative Code §§ YY51-1.0, YY51-5.0 [a], [b]).

Subdivision (a) of section YY51-5.0 of the Administrative [191]*191Code dealt with the membership of the Board. The Mayor appointed all nine members, of whom two represented tenants, two represented property owners, and five represented the public. One of the public members was designated by the Mayor as the Board Chairman, and, each one of the public members, at the time of appointment, was required to "have had at least five years experience in either finance, economics or housing.”

During 1980 and 1981, when the Board issued the orders in dispute, the applicable procedure, which the Board had to comply with in making rent adjustments, was contained in subdivision (b) of section YY51-5.0 of the Administrative Code, and read, in pertinent part, as follows: "The * * * board shall establish annually guidelines for rent adjustments, and in determining whether rents for housing accommodations * * * 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, cost of fuel and labor costs), (iii) costs and availability of financing (including effective rates of interest), (iv) overall supply of housing accommodations and over-all [sic] 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 during the next succeeding twelve months. Such findings and statement shall be published in the city record.”

Furthermore, during this same 1980-1981 period, subdivision (d) of section YY51-5.0 of the Administrative Code separately authorized the Board to determine the rental for apartments, which became vacant at the termination of a lease (note: this is the so-called vacancy increase allowance). In pertinent part, subdivision (d) reads, as follows: "Any housing accommodation covered by this law owned by a member in good standing of an association registered with the housing and development administration pursuant to section YY51-6.0 which becomes vacant for any reason, other than harassment [192]*192of the prior tenant, may be offered for rental at any price notwithstanding any guideline level established by the guideline board for renewal leases provided the offering price does not exceed the rental then authorized by the guideline board for such dwelling unit plus five per cent for a new lease not exceeding two years and a further five per cent for a new lease having a minimum term of three years, until July first, nineteen hundred seventy, at which time the * * * board shall determine what the rental for a vacancy shall be”.

Before the Board could make a final decision establishing the rates of annual rent adjustments, it was required by subdivision (h) of section YY51-5.0 to hold one or more public hearings, for the purpose of collecting information relating to the designated factors, set forth in subdivision (b) of section YY51-5.0, quoted supra, which factors the Board was mandated by subdivision (b) to take into account. In substance, the language of subdivision (h) directed that the Board publish notice of the date, time, location, and summary of the subject matter for the public hearing or hearings, in the City Record, for a period of not less than eight days, and, at least once in a newspaper of general circulation, at least eight days, prior to each hearing date. Moreover, subdivision (h) specifically stated that the public hearing or hearings "shall be open for testimony from any individual, group, association or representative thereof who wants to testify”.

Besides being required to hold a public hearing or hearings, when it met to conduct public business, the Board was subject to article 7 of the New York State Public Officers Law (note: this is the so-called Open Meetings Law). The Open Meetings Law requires, inter alia, that a public notice of the time and place of a meeting held by a public body, like the Board (see, Public Officers Law § 102 [2]), to conduct public business (Public Officers Law § 102 [1]) "shall be given to the news media” at least one week prior to the scheduled date (Public Officers Law § 104 [1]), and that the notice "shall be conspicuously posted in one or more designated public locations at least seventy-two hours before such meeting” (Public Officers Law § 104 [1], [2]). Our examination of the provisions of the Open Meetings Law indicates to us that the legislative intent is "to enable members of the public to 'listen to the deliberations and decisions that go into the making of public policy’ (Public Officers Law § 100; see also, Matter of Orange County Pub. v Council of City of Newburgh, 60 AD2d 409, affd 45 [193]*193NY2d 947)” (Mitchell v Board of Educ., 113 AD2d 924-925 [1985]).

review of the record indicates that on June 27, 1980, after a series of public hearings, which were held pursuant to subdivision (h) of section YY51-5.0 of the Administrative Code, and the provisions of the Open Meetings Law, the Board issued three orders numbered lOd, 11a and 12.

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Stein v. Rent Guidelines Board, 127 A.D.2d 189, 514 N.Y.S.2d 222, 1987 N.Y. App. Div. LEXIS 41500 (N.Y. Ct. App. 1987).

127 A.D.2d 189 (Stein v. Rent Guidelines Board) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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