Supreme Court Tosses Harmon Case


The Supreme Court rejected a case brought by former federal prosecutor Jim Harmon that could have challenged the city’s rent control laws.

Mr. Harmon, who owns a five-story townhouse on West 76th Street with three rent controlled tenants, had brought a complaint to the court that rent control violates his Constitutional rights because it gives tenants a hold on his property without proper compensation. Mr. Harmon’s three tenants pay about $1000-per-month, far below the market rent for the apartments.

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supreme court Supreme Court Tosses Harmon CaseThe case, given its potentially wide-reaching impact, was closely watched by real estate executives in the city, particularly those involved in multi-family apartment investments and also broker who sell such properties. If the court had heard the complaint and ruled in his favor, the decision could likely have unraveled rent control guidelines, a momentous event in a city with roughly a million such stabilized units.

“Ugh,” was all one high profile investment sales broker would say of the Supreme Court’s decision to swat down the case in an email to The Commercial Observer.

Bob Knakal, a high profile investment sales broker with Massey Knakal, told The Commercial Observer last week that overturning rent control regulations would actually lower rental rates in the city overall because it would pour a large supply of units onto the market. Mr. Knakal, like many of his peers, had hoped the Supreme Court would at lease hear the case.

“You have a system that right now basically subsidizes people who can afford to pay market rate,” Mr. Knakal said, pointing to the fact that the city’s rent control guidelines have no means-test that adequately gauges whether the occupant of a unit can afford to pay market rate and whether they should be entitled therefore to the discounts the program provides.

“For 50 years my family has been subsidizing the lifestyles of tenants,” Mr. Harmon, told The New York Observer last week.