The panel also pointed out that the injuries claimed by the landlords were, at this point, still largely hypothetical ones. “More broadly, the landlords do not demonstrate that they attempted to use any of the available methods to exit the market or evict problematic tenants,” the panel concluded. “Unless and until they do so, it is impossible for us to determine if the RSL effects an as-applied taking.” In this circumstance, the panel noted, “exiting the market” meant converting the rent-controlled units into market-rate ones, not merely selling the building or transferring ownership of it.
The Supreme Court already dispensed with one challenge to the RSL earlier this week. In its Monday orders, the court declined to hear Community Housing Improvement Program v. City of New York, which challenged the RSL on similar grounds. (Again, because of the ownership structures, the case was technically separate from the other two.) But the justices declined to dismiss the other two petitions and instead scheduled them to be reconsidered in their weekly conference on Friday.
In recent years, the justices have shown some indications that it could broaden the law’s thinking on when regulations amount to a physical taking. In the 2021 case Cedar Point Nursery v. Hassid, for example, the court’s conservative members overturned a state law in California that gave union organizers free access to farmworkers without the farm owner’s permission under certain conditions. That access, the court concluded, violated the Takings Clause by limiting the owners’ right to exclude people from their property.