Challenge to Supplemental Rent Guidelines Increase for Poor Tenants

Casado v. Markus, Index No. 40227/08 (Sup. Ct. N.Y. Co.)

Nature of Claims: This action challenges the Rent Guideline Board's Order #40 which includes a supplemental increase (or a poor tax) for tenants who have lived in their homes for six or more years and have rents of under $1000.

Background: The New York City Rent Guideline Board (RGB) is a quasi-legislative body empowered to establish rent adjustments for approximately one million dwelling units subject to the Rent Stabilization Law in New York City. On June 19, 2008, the RGB adopted the 2008 Apartment and Loft Law #40, a supplemental adjustment for a new sub-class of housing accommodations. The RGB plan provided for renewal increases of 4.5 and 8.5 percent for one-and two-year renewal increases, respectively. It also provided for a supplemental increase applicable to persons who have lived in an apartment for more than six years and pay less than $1,000 in rent. These tenants were required to pay increases of no less than $45 or $85 for one-and two-year renewals, resulting in a higher percentage increase than what is allowed under current RGB guidelines.

Current StCallahan v. Careyatus: In a major victory for New York City’s rent stabilized tenants, the court vacated the portion of Order #40 which provides for the supplemental increase, declaring that the RGB does not have the authority to create a new class of housing accommodations and/or create rent adjustments not specifically authorized by the legislature.

No. Persons Affected: Approximately 300,000 Rent Stabilized tenants have rents that are less than $1000 per month.