Poughkeepsie Rent Stabilization Law Overturned

Understanding the Emergency Tenant Protection Act

The Emergency Tenant Protection Act (ETPA) is a New York State law that allows municipalities affected by housing emergencies to opt into a form of rent control. The purpose of this rent control remedy is to give eligible localities tools to stave off excessive rent inflation that can occur during periods of vacancy supply shortages. Enacted in 1974, the ETPA was originally available only to certain communities in Long Island and the lower Hudson Valley but was amended in 2019 to be available to essentially any municipality that has a vacancy rate of 5% or less, as demonstrated by precise data. ETPA rent control is similar to, and somewhat modeled on, the rent stabilization regime in New York City, which was authorized by separate State legislation prior to the ETPA.

Rent stabilization under the ETPA means that landlords can only raise rents by percentages approved by a local Rent Guidelines Board, which typically sets annual increases for one-year and two-year leases. Furthermore, in buildings subject to the ETPA, landlords generally must offer lease renewals to expiring tenants unless the tenant is guilty of one of several bad acts, such as using the rental unit for illegal purposes.

The City of Poughkeepsie tried to implement the ETPA but was barred because of a lawsuit by private landlords and the Hudson Valley Property Owners Association (HVPOA). As of November 22, 2024, Poughkeepsie has been blocked from implementing rent stabilization under ETPA because of the ruling in this lawsuit.

Court Finds That Poughkeepsie Rent Stabilization Was Based on a Flawed Study

A New York state court has struck down the city of Poughkeepsie's recent adoption of rent stabilization. Justice Christi J. Acker of the Dutchess County Supreme Court ruled that the city's housing vacancy survey, used to justify the emergency declaration, was flawed.

The city's survey counted zero vacancies for properties where landlords actually reported significant numbers of vacancies. Although Poughkeepsie admitted that these landlords reported the vacancies in response to the City’s official mailed survey of November 2023, Poughkeepsie argued that it was within its rights to disregard the vacancies for miscellaneous reasons. The judge determined that Poughkeepsie’s approach misapplied the law.

For example, despite receiving the landlords’ responses to the November 2023 survey, Poughkeepsie mailed a second batch of survey forms to many of the same landlords in January 2024 without clearly explaining why: a number of landlords who had already responded to the first mailing believed that they did not need to respond to the second mailing. Poughkeepsie argued that it rightfully disqualified landlords who answered the first survey but did not answer the second, because the ETPA provides that a “nonrespondent” landlord shall be deemed to have zero vacancies, Justice Acker rejected that argument, observing that the risk of landlord confusion “is potentially high where, as here, a subsequent survey seeks functionally the same information as a prior survey.” The Court continued: “To an owner or agent who cooperated with a prior survey and returned a positive response indicating vacancies, a later survey seeking the same information easily could appear redundant, particularly where, as here, the surveys follow each other reasonably close in time.” The Court also rejected Poughkeepsie’s other excuses for disregarding vacancies, which were based on infirm grounds such as anonymous hearsay remarks allegedly made by tenants or other persons.

After correcting for Poughkeepsie’s errors, the survey data showed that the vacancy rate was at least 6.07%. This does not satisfy the ETPA's 5%-or-less threshold, thereby rendering Poughkeepsie ineligible for rent control at this time.

The HVPOA and individual property owners challenged the city's decision in court. They argued that the city incorrectly assumed zero vacancies for non-responsive landlords. The court agreed, invalidating Poughkeepsie's rent stabilization measures.

Hacker Murphy, LLP Represented the Property Owners

Attorneys Benjamin F. Neidl, John F. Harwick, and Thomas Higgs of Hacker Murphy, LLP represented the property owners. In response to the recent verdict, Neidl said,

“We’re very pleased that the court recognized the serious issues in Poughkeepsie’s vacancy study, asserted in our complaint. It’s essential that a locality’s rent control determinations be based on accurate data.”

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