Legal Challenges Can Help Change The Housing Narrative

The greatest failure of American education has been the way we teach ourselves about rights. The notion that the rights we enjoy – religious freedom, speech, etc. – were established by our revolution against a tyrannical king in England is false. Instead, our rights came to us through an extended process of evolution. The lazy pedagogy and propaganda have led to division and bad policy, including policies that impact housing. There is no right to housing. But there is an established right to private property. Let’s take a look at that right and a legal challenge of rent control in New York, CHIP, RSA, et al. v. City of New York, et al. (2d Cir.), based on that right and how that challenge is helping change the housing narrative.

The story of rights in America doesn’t start in Philadelphia in 1776 but in a place called Runnymede, England in 1215. It was there that various barons and other magnates of the Kingdom of England forced King John to sign a document that came to be known as Magna Carta. The document enshrined for the first time in writing the idea that the executive branch of government (sorry for the anachronism) was forced to yield to what amounted to the first parliament. While not elected, the barons and magnates demanded that before people in the kingdom were deprived of their freedoms, including their property, there had to be some kind of process.

This momentous event didn’t resolve the issue. It wasn’t until the 17^th century and another civil war in England (they had several) that these issues surfaced again, this time violently. King Charles was shaking down people in the country side and cities to pay for wars in Europe. The Parliament, now a stronger institution, had enough. They issued in 1628 called the Petition of Right. There, they call upon Magna Carta, asking the King to stop his aggressive efforts to seize and occupy people’s property.

“’The Great Charter of the Liberties of England,’ it is declared and enacted, That no Freeman may be taken or imprisoned or be disseised of his freehold or liberties, or his free customs, or be outlawed or exiled, or in any manner destroyed, but by the lawful judgment of his peers, or by the law of the land.”

That word, disseised, is an example of Anglo-Norman words in our legal terminology. It means to dispossess or more efficiently, to take property. It would be 14 more years of arguing before open war broke out between the Parliament and the King, a war that resulted in his overthrow and execution. This influenced the founders of the United States, since they saw the ultimate settlement and the establishment of the basic rights in Magna Carta as the social contract being broken by the English government, a violation that justified a break with England.

The reason this matters today is that the Petition of Right is acknowledged as one of the foundations of the Fifth Amendment in our Bill of Rights, an amendment that appears to lump together issues of criminal and civil justice (an important reference on the Constitution is the Founder’s Constitution, an excellent compendium of the documents and ideas supporting the Constitution).

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

But the authors of our Constitution didn’t see a distinction between criminal disputes which could deprive a person of “life and limb” and civil disputes which could deprive a person of “life, liberty, or property.” For them, in an 18^th century context, government action to take any of these require “due process of law,” and in the case of private property, “just compensation.” The American Constitution hallows the ancient principles of English law, fought over for centuries, as a birthright for Americans. Taking a person’s property has the same gravity as taking their life or limb.

The history matters. When I’ve mentioned that a housing policy is being challenged based on the Fifth Amendment, I sometimes get asked, “What does ‘taking the Fifth’ have to do with housing?” People don’t know about the last half of the amendment. And the term, “private property rights,” has become synonymous in dominant culture with ranchers with guns fighting over acres of empty land with the Federal Government. The truth is that the idea that a person’s private property is bound together with other things we consider rights like speech has been lost.

Today, we have people claiming that “housing is a human right.” But saying that doesn’t make it so. At the same time, we know that private property really is an established Constitutional right. Yet legal challenges like the one in New York are struggling to get courts to apply what should be an obvious standard to efforts by local governments to control how people use their private property, specifically when they rent property to others. The case filed by the Community Housing Improvement Program (CHIP) is simple. From their summary of the case:

“For fifty years, New York City has declared its rental housing market to be in a perpetual state of “emergency” in order to justify a legal regime that forces a small set of property owners to subsidize housing for a randomly selected population of individual tenants. Those property owners have been deprived of all meaningful rights with respect to their property, including the right to exclude others from the property; to occupy, possess or use the property; and to freely dispose of the property.”

I’ve never liked these kinds of challenges because they sound heartless, playing into the sentimentality of the “housing is a human right” crowd’s logic; people’s need for housing trumps other people’s established right to their own property. That sounds compassionate, and it often sells, but it truly isn’t compassionate at all. Policies like rent control have long been understood to make housing problems worse for people with less money, not better (read my longer take on rent control, How Rent Control Makes Housing Less Affordable).

I’m not going to give a blow by blow of CHIP, RSA, et al. v. City of New York, et al. (2d Cir.) but while I am skeptical of the short and intermediate term benefits of these cases (see my post Legal Challenges To Eviction Bans: And Justice For All?), I do think they are important. The edifice of the law in our system is precedential, built on laws passed by legislatures, implemented by executives, and litigated in our courts. For a long time, in spite of the plain language of the Fifth Amendment, courts have given wide and deep deference to local governments when regulating real estate, especially through zoning and tenant landlord laws.

Cases like CHIP are trying to essentially make new law, that is change the precedent. Consider the discussion at page 12 in the transcript of oral arguments in the appeal between the most recent judge in the case and Andrew Pincus who is lead attorney on the case.

“MR. PINCUS: On the physical taking claim, which we’re talking about now, we’re seeking a declaration that the obligation that — that when a property owner wishes to remove the property from the residential rental market, for demolishing, for renovation, for use for other purposes, that the obligation that he offer a renewal is unconstitutional and —

THE COURT: Mr. Pincus.

MR. PINCUS: — (indiscernible) —

THE COURT: Mr. Pincus.

THE COURT: Yeah. So —

THE COURT: (Indiscernible) —

THE COURT: — is what you’re asking us to do to declare this regime on a takings basis unconstitutional?

MR. PINCUS: Yes.”

Pincus had introduced another case, Cedar Point Nursery Et al. v. Hassid Et al., a case in which the Supreme Court decided that it was a violation of property rights that the state of California allowed union organizers to occupy privately owned farms to organize workers. The judge in the CHIP case was skeptical, telling Pincus, “I see the taking as quite different in this circumstance and actually as Cedar Point not really controlling at all (page 8).”

It isn’t until more discussion that the judge seems to finally start making the connection. It is a slow and painful process to watch. The Cedar Point case marks a shift: “The Court has held that a physical appropriation is a taking whether it is permanent or temporary; the duration of the appropriation bears only on the amount of compensation due.” But Pincus has to connect the dots from that case, one about farms and unions, to the idea of renters being entitled somehow to stay in their apartments forever, whether they are paying or not and whether the owner wants to change use or change tenants.

I’m not changing my mind: the best and most important use of resources today is to research public opinion to understand why people think what they do about rental housing and housing in general. Why do people think and believe that rental housing is somehow different than any other private business? How do we change that view so that it is based on the reality that housing is a marginal business just like any other business trying to produce revenue that meets or exceeds costs? I said in the post about legal challenges above that,

“The local apartment building – whether a giant one of glass or steel or a little brick fourplex – is a business serving local people just like the grocery store or the corner bar; and just like those businesses, rental housing is risky and operates on the margins. No lawsuit, even one with a thrilling and satisfying verdict, can do the hard work of changing the story about housing.”

Yet, the slow and meticulous work Mr. Pincus and his colleagues are doing across the country even in ill-fated and even ill-conceived legal challenges is a necessary and important drip, drip, drip, of water wearing down the stone of 100 years of legal decisions favoring arbitrary and capricious political moves to limit and control rental property in ways that harm the owners, the residents, and more broadly the whole housing market. But we’re running out of time. I’ve predicted the end of most private rentals by the end of this decade. The slow drip of legal arguments might become more like high pressure water jet if we invested in changing the minds of the public at the same time as changing the legal framework.