Taking the Mamdani Administration to Court Over Housing Policies

0:00 Speaker 1 Sunday morning. With us today is Randy Mastro. And one of the, well, one of the premier attorneys in New York City, a former first deputy mayor. And he knows where all the bodies are buried. Well, Randy Mastro, I mean, you’re defending the landlords. You’re defending the people that they’re trying to, I guess, I would say the word rip

0:23 off on Pierre, the tear taxes. Where do we start on a Sunday morning?

0:31 Speaker 2 Well, John, we are now challenging the constitutionality of that pied-a-terre tax, trying to get rid of it altogether. We won a case that the Mondani administration had botched the rollout and had to do a do-over. That case is on appeal. Now we are challenging the legality, the constitutionality of that pied-a-terre tax. because it violates the federal and

1:00 state constitutions. That case was brought out in Suffolk County, and it’s going to proceed on an expedited schedule. So by December, we should be in a position to get a ruling whether or not that pied-à-terre tax is wiped out as unconstitutional and illegal.

1:19 Speaker 1 I understand that. And does this go under state law or federal law? Both.

1:28 Speaker 2 Under the federal constitution, the governor, state legislators, the mayor admitted at the time this was passed that they were doing this to target out-of-state billionaires who had second homes in New York City. And that is blatantly illegal under the federal constitution, both the Privileges and Immunities Clause, which makes it unconstitutional to discriminate against out-of-staters, and the Dormant

2:02 Commerce Clause, which bars states from interfering with interstate commerce. Also, under the state constitution, because, John, they called this a surcharge, even though a tax by any other name would cost people as much. Obviously, a tax on top of your real estate taxes. But they did that to try and get around Article 8 of the state constitution, which places

2:32 a cap on how much of revenue can be raised through real estate taxes. So they attempted to exempt this pied-a-terre tax from that cap. It’s obviously a tax. So that makes this tax illegal because it was exempted. improperly from the cap on real estate taxes. So for under either the federal or the state constitutions, we believe this

3:04 is going to be found to be unconstitutional and illegal, and the periodical tax will be voided in its entirety.

3:13 Speaker 1 Wow. Well, that’s certainly, you know, because... Right now, New York City’s at a standstill. People don’t know that they should buy or they should sell or just do, you know, or wind their watch. I mean... Well, that’s.

3:29 Speaker 2 One of the great ironies here, John, right? This tax supposedly raising more revenue is having an adverse effect on property values and the ability to resell and who you can sell to and who you can’t sell to and depressing property values. In the long term... A gimmick like this is going to cost the city money. But hopefully, John,

3:56 just like the case against the botched rollout, which we won already, the courts will also find the pied-à-terre tax itself to be unconstitutional and therefore void it altogether.

4:12 Speaker 1 How about the other lawsuit that you have where you’re fighting the fact that they’re freezing the rents and expenses are going up and some of the people that own buildings could go out of business?

4:29 Speaker 2 John, another crazy thing that the Mondani administration has done. For the first time in city history, It put some on the scale with what’s supposed to be an independent board, the Rent Guidelines Board, to have them produce a result, unprecedented in its 60-year history, a zero-zero across-the-board rent freeze.

4:53 And it did this in a year where landlords’ costs are going through the roof, higher than the rate of inflation, where their income is down. where their net operating income is less than it was last year. And last year, John, that rent guidelines board increased landlords’ rents, allowed them to charge up to 3% more for one-year lease, 4.5% more

5:20 for two-year leases. And John, Their costs were going up roughly the same. Their net operating income was higher last year, yet they were allowed to raise rents. What’s different this year than last year? That Mondani packed the board with acolytes, supermajority, six of the nine members, and put thumb on the scale throughout the process for them to deliver rents. a

5:52 preordained outcome. It was a sham process. The data doesn’t support it. The statutory mandate of what factors that board was supposed to consider, it simply ignored them, considering only, you know, tenant affordability. That’s not the way this process was supposed to work. It was supposed to be balanced decisions based on data.

6:12 Speaker 1 Now, this is a state case, so it goes up as high as the Court of Appeals, if necessary. Is that correct? Yes.

6:19 Speaker 2 Yes, John. We are in Manhattan State Supreme Court. We expect a ruling imminently. The judge did something special in this case. He ordered the city to have to produce documents of communications between City Hall and the Rent Guidelines Board, supposedly independent Rent Guidelines Board. John, there were nearly a thousand communications between City Hall and and the supposedly independent

6:46 Rent Guidelines Board, after the city stood up in court and represented that they thought there would be virtually nothing. And those documents were a revelation. Now the city is trying to cut off that discovery. And when I say a revelation, John, the 40-page explanatory statement, that’s the decision document that supposedly explains the rationale of the Rent Guidelines

7:13 Board for its unprecedented... across-the-board rent freeze for the first time in city history, that 40-page document was delivered to City Hall to review before the public comment period had even expired and nine days before the board even voted.

7:31 That is shocking.

7:33 Speaker 1 Randy Mastro, please keep fighting for all New Yorkers. Thank you so much for coming on this Sunday morning, and God bless you and God bless America.

7:43 Speaker 2 My pleasure, John. Thank you for having me. Thank you.