Amicus Curiae Brief — Community Housing Improvement Program, et al., Petitioners v. City of New York, New York, et al.

No. 22-1095

In the

Supreme Court

of the United States

______________

COMMUNITY HOUSING IMPROVEMENT

PROGRAM, et al.,

Petitioners,

v.

CITY OF NEW YORK, NEW YORK, et al.,

Respondents.

______________

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

______________

BRIEF OF AMICUS CURIAE

MINNESOTA MULTI HOUSING ASSOCIATION

IN SUPPORT OF PETITIONERS

______________

Philip J. Kaplan

Nicholas J. Nelson

Joseph T. Janochoski

Counsel of Record

ANTHONY OSTLUND

CROSSCASTLE PLLC

LOUWAGIE DRESSEN

333 Washington Ave. N.

& BOYLAN P.A.

Ste. 300-9078

90 South Seventh Street

Minneapolis, MN 55401

Suite 3600

Tel: (612) 429-8100

Minneapolis, MN 55402

nicholas.nelson@crosscastle.com

Tel: (612) 349-6969

pkaplan@anthonyostlund.com

jjanochoski@anthonyostlund.com

Counsel for Amicus Curiae

2023 - Bachman Legal Printing n (612) 339-9518

TABLE OF CONTENTS

INTEREST OF AMICUS CURIAE…………………….1

SUMMARY OF ARGUMENT…………………………..3

REASONS FOR GRANTING THE PETITION………6

I.

Rent Control is a Specious Solution to

Affordable Housing…………………………….7

II.

The Second Circuit’s Decision Creates a

Circuit Split, Contradicts this Court’s

Precedent, and Magnifies Confusion in the

Law……………………………………………..10

III.

The Court Should Grant the Petition to

Protect the Property Rights of Minnesota

Property Owners and Provide Clear

Guidance on Rent-Control-Based Takings

Claims………………………………………….15

CONCLUSION…………………………………………..18

ii

TABLE OF AUTHORITIES

Cases

Armstrong v. United States,

364 U.S. 40 (1960)………………………. 6, 10, 15

Cedar Point Nursery v. Hassid,

141 S. Ct. 2063 (2021) …………………….6, 9-14

Heights Apartments, LLC v. Walz,

30 F.4th 720 (8th Cir. 2022)……………….10, 11

Heights Apartments, LLC v. Walz,

39 F.4th 479 (Mem.) (8th Cir. 2022)………….11

Kaiser Aetna v. United States,

444 U.S. 164 (1979)……………………………… 6

Kelo v. City of New London,

545 U.S. 469 (2005)……………………………..18

Lamplighter Village Apartments LLP v. City of St.

Paul,

534 F. Supp. 3d 1029 (D. Minn. 2021)………..11

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982) ……………………….......... 6

Pennell v. City of San Jose,

485 U.S. 1 (1988)…………………. 4, 6, 10, 14-16

PruneYard Shopping Center v. Robbins,

447 U.S. 74 (1980)……………………………….13

iii

Woodstone Ltd. P’ship v. City of Saint Paul,

No. 22-CV-1589 (NEB/DLM), 2023 WL

3586077 (D. Minn. May 22, 2023)……15, 16, 17

Yee v. City of Escondido,

503 U.S. 519 (1992)…………………………12, 14

Statutes

City of St. Paul Ordinance 22-37 (adopted Sept. 21,

2022)………………………….............................16

9 NYCRR § 2520.6………………………………………..8

9 NYCRR § 2523.5………………………....................... 8

9 NYCRR §§ 2524.1-2524.3…………………………….. 8

9 NYCRR § 2524.4………………………………………..8

9 NYCRR § 2524.5………………………………………..9

NY. Unconsol. Laws § 26-510………………………9, 15

NY. Unconsol. Laws § 26-511 ……………………….8, 9

Other/Miscellaneous

Supreme Court Rule 37.2………………………………..1

Rebecca Diamond et. al., The Effects of Rent Control

Expansion on Tenants, Landlords, and

Inequality: Evidence from San Francisco,

109(9) AM. ECON. REV. 3365 (Sept.2019)………8

iv

Susan Du, Minneapolis city staff report recommends

against adoption of rent control, STAR TRIBUNE

(April 14, 2023)………………………………….. 17

Blair Jenkins, Rent Control: Do Economists Agree?,

6 ECON. J. WATCH 73 (Jan. 2009)……………… 7

CITY OF MINNEAPOLIS, Rent Stabilization Staff

Analysis 15 (April 2023).................................. 17

William Michael Treanor, The Original

Understanding of The Takings Clause and the

Political Process, 95 COLUM. L. REV. 782 (1995).

……………………………………………………...17

Br. of Amicus Curiae Minnesota Multi Housing

Association in Opp’n to Defendants-Appellees’

Petition for R’hrg or R’hrg En Banc (filed June

2, 2022), Heights Apartments, LLC v. Walz, No.

21-1278 (8th Cir.)………………………………..11

v

INTEREST OF AMICUS CURIAE1

The Minnesota Multi Housing Association

(MHA) is a Minnesota non-profit corporation that was

founded in 1967 to promote the highest standards in

the development, management, and maintenance of

rental and owner-occupied multi housing, and to

advocate for Minnesota multi-family property owners

and landlords. MHA has over 2,200 members—most of

whom own or manage fewer than 50 units each—who

collectively own more than 300,000 residential rental

units across Minnesota. Since its founding, MHA has

served as an advocate for owners’ property rights and

a promoter of sound public and industry policies in the

multi housing industry.

MHA appears as amicus because it—like the

Petitioners in New York—has a strong interest in

preserving its Minnesota-based members’ ability to

purchase, sell, manage, and otherwise control real

property, and to exercise their constitutional and

statutory rights with respect to real property they own

or manage. MHA believes that the constitutional and

property law issues in this case—namely, the rights of

owners and landlords to lawfully exclude others from

their property and to determine the amount of rent to

charge their tenants—will profoundly affect multifamily property owners and landlords in Minnesota.

MHA also believes the Second Circuit erred in its

application of this Court’s precedent, and granting the

No party or counsel for a party authored this brief in

whole or in part, and no person or entity other than MHA made

any monetary contribution to its preparation or submission.

Pursuant to Supreme Court Rule 37.2, MHA has given timely 10

day notice to all counsel of record of its intent to file this amicus

curiae brief.

1

1

petition for certiorari is critical to correct that error

and to maintain constitutional protections for property

owners in Minnesota and across the nation.

2

SUMMARY OF ARGUMENT

This case presents the Court with an

opportunity to resolve a Circuit split, reaffirm the

vitality of the Court’s precedents on the Takings

Clause, and clarify significant confusion regarding

important points of takings law that will have—and

indeed, already has had—a profound negative effect on

the rights of property owners in Minnesota and across

the nation.

New York’s Rent Stabilization Law (RSL)

severely restricts property owners’ rights to determine

who can be on their properties and on what terms. The

RSL effectively requires property owners to renew

tenants’ leases in perpetuity, by obligating owners to

lease to strangers deemed by the RSL to be

“successors” of a previous tenant, and by limiting

owners’ ability to possess their properties for their own

use or to change the use of their properties. The RSL

also restricts a property owner’s freedom to charge

rent by requiring any rent increases to be based on,

among other things, the tenant’s ability to pay.

Petitioners challenged the RSL, asserting that

(1) its provisions barring an owner from regaining

exclusive possession of her property are a per se

physical taking; and (2) its requirement that rent

increases account for tenants’ ability to pay is a

regulatory taking. The Second Circuit affirmed the

dismissal of these claims on the pleadings—effectively

holding that an owner loses her rights to exclude, use,

and change the use of her property, as well as her right

to raise rent according to her own financial needs (as

opposed to the tenant’s ability to pay), simply by

electing to lease the property for a period of time.

3

That decision squarely conflicts with a recent

decision from the Eighth Circuit, which held that a

regulation requiring landlords to extend leases in

perpetuity was a per se physical taking. As a result,

the same government actions now constitute a taking

in Minneapolis or St. Louis, but not in New York or

Buffalo. This Court should resolve the disparity.

The Second Circuit’s decision also conflicts with

the takings principles previously articulated by this

Court. The Court’s prior decisions make clear that—

contrary to the decision below—requiring an owner to

lease her property in perpetuity, without ever being

able to recover it for any other use, is per se a taking of

that property. Certiorari is necessary to uphold and

reaffirm that principle.

In addition, this Court’s review is warranted to

clarify confused points of regulatory takings

jurisprudence. In Pennell v. City of San Jose, Justice

Scalia explained that a government restriction on the

rent a landowner may charge is a regulatory taking to

the extent it is based on an individual tenant’s ability

to pay—but the full Court did not reach that question,

citing a procedural impediment. Compare 485 U.S. 1,

19–24 (1988) (Scalia, J., concurring in part and

dissenting in part), with id. at 9 (opinion of the Court,

finding it “premature to consider this contention on

the present record”). Here, the Second Circuit declined

to apply the principles articulated by Justice Scalia in

Pennell because the full Court has not yet adopted

them. This case presents the Court with occasion to do

so.

4

Finally, remedying the Second Circuit’s error,

and clarifying the appropriate parameters of a

Takings Clause claim in the context of “rent control”

or “rent stabilization laws,” is an issue of critical

importance to landowners in Minnesota and

nationwide, many of whom are MHA members. Rent

control is a hotly contested issue in Minnesota. The

City of St. Paul, Minnesota enacted a rent control

ordinance in 2022, which a federal district court

recently upheld in reliance on the Second Circuit’s

erroneous decision in this case. The City of

Minneapolis, Minnesota is currently discussing

similar rent control provisions. These policies

negatively affect tens of thousands of property owners

in Minnesota, and economic studies show that these

policies harm tenants as well. The Second Circuit’s

error in this case threatens to exacerbate these

difficulties.

The Court should grant the petition for

certiorari, reverse the judgment below, and provide

clear, authoritative guidance as to the correct

constitutional parameters of the Takings Clause with

respect to “rent control” or “rent stabilization laws.”

5

REASONS FOR GRANTING THE PETITION

As this Court has observed, the right to exclude

others is “one of the most treasured rights of property

ownership” and “is ‘one of the most essential sticks in

the bundle of rights that are commonly characterized

as property[.]’” Cedar Point Nursery v. Hassid, 141 S.

Ct. 2063, 2072 (2021) (quoting Loretto v. Teleprompter

Manhattan CATV Corp., 458 U.S. 419, 435 (1982) and

Kaiser Aetna v. United States, 444 U.S. 164, 176

(1979)). “Given the central importance to property

ownership of the right to exclude . . . the Court has

long

treated

government-authorized

physical

invasions as takings requiring just compensation.” Id.

at 2073.

Similarly, while affordable housing is an

important problem, “compelled subsidization by

landlords” of a tenant’s rent “is an improper and

unconstitutional method of solving the problem.”

Pennell v. City of San Jose, 485 U.S. 1, 23–24 (1988)

(Scalia, J., concurring in part and dissenting in part)

(cleaned up). Requiring owners to limit their rent

based on a tenant’s ability to pay contradicts the

“guiding principle of the Takings Clause that ‘public

burdens . . . should be borne by the public as a whole,’”

and not by individual property owners. Id. at 22

(quoting Armstrong v. United States, 364 U.S. 40, 49

(1960)).

This case deeply implicates those foundational

constitutional principles. The Court should grant the

petition for certiorari to correct the Second Circuit’s

error in upholding New York’s RSL, and to restore

protections for property owners in Minnesota and

around the nation who rent their property.

6

I.

Rent Control is a Specious Solution to

Affordable Housing.

Rent control—or rent stabilization—was first

imposed in the United States in response to wartime

difficulties; during World War II, many housing

markets around the country were overwhelmed as

soldiers and their families relocated around the

country. Blair Jenkins, Rent Control: Do Economists

Agree?, 6 ECON. J. WATCH 73, 74 (Jan. 2009). Rent

control was billed as a way of ensuring affordable

housing. Id.

Unfortunately, not all that glitters is gold. Rentcontrol measures that were designed to alleviate

temporary emergencies have since become permanent

regimes—and in that context, have created new

problems much greater than the ones they purported

to fix. Since the imposition of rent control measures in

various locales in the United States, comprehensive

research has found that rent control actually

accomplishes the opposite of its goal: it drives up rent

and decreases the supply of affordable housing. A 2009

study conducted a comprehensive review of economic

research on rent control, covering “both theoretical

and empirical research on [the] many dimensions of

the issue, including housing availability, maintenance

and housing quality, rental rates, political and

administrative costs, and distribution.” Id. at 105. It

found that “economic research quite consistently and

predominantly frowns on rent control” and that the

economics profession had reached a “rare consensus:

Rent control creates many more problems than it

solves.” Id. at 105 (internal citation omitted). Even

when rent control has provided some short term

7

benefits to a limited set of renters, those benefits were

outweighed by the fact that “the lost rental housing

supply likely drove up market rents in the long run,

ultimately undermining the goals of the law[.]”

Rebecca Diamond et. al., The Effects of Rent Control

Expansion on Tenants, Landlords, and Inequality:

Evidence from San Francisco, 109(9) AM. ECON. REV.

3365, 3365, 3393 (Sept. 2019). Despite its glaring

flaws, rent control has persisted.

New York City has been subjected to failed rent

control policies for decades. New York’s RSL, which is

at issue in this case, is extremely stringent. Under its

provisions, property owners who lease their property

are effectively required to renew their tenants’ leases

in perpetuity (absent circumstances outside the

owners’ control). See 9 NYCRR §§ 2524.1-2524.3.

Owners are also required to continue to lease to

strangers deemed by the RSL to be “successors” of the

previous tenant—including any member of the

tenant’s extended family, and any other person living

with the tenant who has an “emotional and financial

interdependence” with the tenant. See 9 NYCRR

§§ 2520.6, 2523.5. Notably, people who succeed to a

tenancy in this way can then pass on their

successorship rights to others who live with them—

and those third-generation successors can pass on

their successorship rights, and so on indefinitely. The

RSL also heavily restricts an owner’s ability to regain

possession of her own property for her own use, absent

an “immediate and compelling necessity.” See, e.g.,

NY. Unconsol. Laws § 26-511; 9 NYCRR § 2524.4.

In addition, the RSL restricts owners from

changing the use of their properties. An apartment

owner may not switch to commercial rentals,

8

withdraw her property from the residential market, or

even demolish her own property, unless she satisfies

extremely strict requirements (and in some cases, pays

tenants a stipend and relocates them to equal or

superior housing). See 9 NYCRR § 2524.5; see also

N.Y. Unconsol. Laws § 26-511(c)(9)(a).

The RSL also heavily restricts owners’ ability to

raise rent, even to cover increasing costs. Permissible

rent increases are determined by a Rent Guidelines

Board, which takes into account “relevant data from

the current and projected cost of living indices for the

affected area[.]” N.Y. Unconsol. Laws § 26-510(b)(2).

Put another way, any rent increases are necessarily

restricted or prohibited based not on the property

owner’s expenses or finances—and not on any

problems or public expenses generated by an owner’s

particular property or by rental properties in

general—but instead based on considerations of

housing affordability in the area and a tenant’s ability

to pay.

The provisions of the RSL obliterate a property

owner’s right to exclude others from the property, “one

of the most essential sticks in the bundle of rights that

are commonly characterized as property[.]” Cedar

Point Nursery, 141 S. Ct. at 2072 (internal citation and

quotation marks omitted). And by restricting rent

increases based on cost-of-living indices and tenants’

ability to pay, the RSL effectively compels landlords to

subsidize tenants’ rent. This sort of forced subsidy is

an “improper and unconstitutional” method of

attempting to solve affordable housing problems

because it contradicts the “guiding principle of the

Takings Clause that ‘public burdens . . . should be

borne by the public as a whole,’” and not by individual

9

property owners. Pennell, 485 U.S. at 22–24 (Scalia, J.,

concurring in part and dissenting in part) (quoting

Armstrong, 364 U.S. at 49).

II.

The Second Circuit’s Decision Creates a

Circuit Split, Contradicts this Court’s

Precedent, and Magnifies Confusion in the

Law.

In this case, the Second Circuit held that these

provisions of New York’s RSL were neither a per se nor

a regulatory taking. That conflicts with both a recent

Eighth Circuit decision and this Court’s precedent.

This Court should grant certiorari to resolve the

conflict between the Courts of Appeals, to correct the

errors below, and to clarify the appropriate standard

for Takings Clause claims in the rent control context.

First, the Second Circuit’s decision conflicts

with a decision from the Eighth Circuit in Heights

Apartments, LLC v. Walz, 30 F.4th 720 (8th Cir. 2022),

creating a Circuit split that this Court should resolve.

In Heights Apartments, LLC, the Eighth Circuit

addressed a challenge to a Minnesota executive order

imposing a moratorium on residential evictions during

the COVID-19 pandemic. 30 F.4th at 723–24. The

Eighth Circuit applied this Court’s holding in Cedar

Point Nursery, 141 S. Ct. at 2072, noting that

whenever a regulation physically appropriates

property, a per se taking has occurred. Id. at 733. As

the Eighth Circuit observed, it is “immaterial whether

physical invasion is ‘permanent or temporary,’

‘intermittent as opposed to continuous,’ or whether the

government is directly invading the land or allowing a

third party to do so.” Id. (quoting Cedar Point Nursery,

10

141 S. Ct. at 2074–76). The Eighth Circuit held that,

because the executive orders at issue in Heights

Apartments, LLC “forbade the nonrenewal and

termination of ongoing leases,” they effectively turned

every lease in Minnesota “into an indefinite lease,

terminable only at the option of the tenant.” Id. Such

allegations, the Eighth Circuit held, gave rise to a

plausible per se physical takings claim under Cedar

Point. Id.; see also Lamplighter Village Apartments

LLP v. City of St. Paul, 534 F. Supp. 3d 1029, 1034-36

(D. Minn. 2021) (deciding an ordinance that required

landlords to rent to individuals they would otherwise

exclude likely constituted a per se physical taking and

a regulatory taking).2

The Second Circuit’s decision on the per se

taking issue here directly contradicts the Eighth

Circuit’s decision in Heights Apartments, LLC. Where

the Eighth Circuit holds (at the pleading stage) that

regulations effectively requiring perpetual leases are a

per se physical taking, the Second Circuit holds (also

at the pleadings stage) the opposite. Compare Heights

Apartments, LLC, 30 F.4th at 732–33, with Pet. App.

22a-28a. Notably, the Second Circuit does not even

address the Heights Apartments, LLC decision, much

less distinguish its reasoning. There is no reason why

the same government acts should be takings in one

MHA has a particular interest in Heights Apartments,

LLC because MHA submitted an amicus brief in support of the

appellants in that case, opposing the appellees’ request for

rehearing en banc. See Br. of Amicus Curiae Minnesota Multi

Housing Association in Opp’n to Defendants-Appellees’ Petition

for R’hrg or R’hrg En Banc (filed June 2, 2022), Heights

Apartments, LLC v. Walz, No. 21-1278 (8th Cir.). The Eighth

Circuit denied the appellees’ request for rehearing. See Heights

Apartments, LLC v. Walz, 39 F.4th 479 (Mem.) (8th Cir. 2022).

2

11

part of the country but not another. This Court should

grant certiorari to resolve the split.

Second, the decision below conflicts with this

Court’s takings decisions in Cedar Point, mentioned

above, and Yee v. City of Escondido, 503 U.S. 519, 528–

29 (1992). The Second Circuit held that the RSL’s

restrictions on property owners’ ability to recover their

own property or change its use did not effect a physical

taking. Pet. App. 19a. Because Petitioners “voluntarily

invited third parties to use their properties[,]” the

Second Circuit held, the government had “broad power

to regulate housing conditions in general and the

landlord-tenant relationship in particular without

paying compensation for all economic injuries that

such regulation entails.” Ibid. (quoting Yee, 503 U.S.

at 528–29 and citing Cedar Point Nursery, 141 S. Ct.

at 2077).

That holding distorts Cedar Point and Yee. In

Yee, this Court addressed a California statute that

limited property owners’ rights to change the use of

their land, but did not bar it entirely; owners could

change the use of their land and evict their tenants,

“albeit with 6 or 12 months notice.” Yee, 503 U.S. at

528. The Court noted that the right to exclude was an

“essential stick” in the bundle of property rights, but

decided that the law at issue had not taken that right

from the property owners. Id. Critically, however, the

Court noted that “[a] different case would be presented

were the statute, on its face or as applied, to compel a

landowner over objection to rent his property or to

refrain in perpetuity from terminating a tenancy.” Id.

(collecting cases). That is exactly what New York’s RSL

does: it bars a landowner from declining to continue to

rent her property and, subject to certain conditions

12

entirely within the control of the tenant (and an

indefinite chain of his successors), forces her to refrain

in perpetuity from terminating a tenancy. See 9

NYCRR §§ 2524.1–2524.5; 9 NYCRR §§ 2520.6,

2523.5; NY. Unconsol. Laws §§ 26-510, 26-511.

Similarly, in Cedar Point, this Court addressed

a California law granting union organizers a right to

enter the properties of agricultural employers for up to

three hours per day, 120 days per year, in order to

solicit support for unionization. 141 S. Ct. at 2069. In

ruling that the law constituted a taking, the Court

observed that “physical invasions constitute takings

even if they are intermittent as opposed to

continuous.” Id. at 2075, 2080. California had argued

the case was like PruneYard Shopping Center v.

Robbins, 447 U.S. 74, 83 (1980), in which the Court

held that the state did not commit a taking by

requiring the owner of a shopping center to allow

visitors to engage in leafleting. Cedar Point, 141 S. Ct.

at 2076. Distinguishing PruneYard, this Court

observed that the agricultural right-to-enter law was

different from the shopping-mall leafletting

requirement: “Unlike the growers’ properties, the

PruneYard was open to the public, welcoming some

25,000 patrons a day. Limitations on how a business

generally open to the public may treat individuals on

the premises are readily distinguishable from

regulations granting a right to invade property closed

to the public.” Ibid. Because the Cedar Point right-toenter “regulation appropriate[d] for the enjoyment of

third parties the owners’ right to exclude[,]” even

temporarily, the Court held it constituted a per se

physical taking. Id. at 2072.

13

Cedar Point is directly applicable to the RSL’s

provisions eliminating owners’ ability to exclude

tenants from their properties, and requiring them

instead to re-lease property to tenants (and their

successors) in perpetuity. The distinction Cedar Point

draws between private property closed to the public,

and private property open to the public, is an

important one that the Second Circuit glosses over.

When a landlord rents an apartment, she does not

open it to the public – she opens it to a specific tenant,

approved by her, for a specific period of time, on

agreed-upon terms. New York’s RSL, however,

requires the landlord to continue renting to that

tenant and his successors—even against the landlord’s

will—in perpetuity, subject only to factors within the

tenant’s control. In doing so, the RSL “appropriates for

the enjoyment of third parties the owners’ right to

exclude[,]” and so effects a per se physical taking under

Cedar Point’s guidance. Id. at 2072.

The Court should grant review to reaffirm the

continuing applicability of the principles it articulated

in Cedar Point and Yee.

Third, while the decision below creates a Circuit

split and conflicts with this Court’s guidance on per se

takings, the Second Circuit’s decision on Petitioners’

regulatory takings claim illustrates the confusion

among the lower courts regarding how regulatory

takings principles apply in the rent-control context. In

Pennell, Justice Scalia’s opinion noted that while

affordable housing is an important problem,

“compelled subsidization by landlords” of a tenant’s

rent “is an improper and unconstitutional method of

solving the problem.” 485 U.S. at 23–24. Requiring

owners to limit their rent based on a tenant’s ability to

14

pay contradicts the “guiding principle of the Takings

Clause that ‘public burdens . . . should be borne by the

public as a whole,’” and not individual property

owners. Id. at 22 (quoting Armstrong, 364 U.S. at 49).

That is exactly the situation that the Second Circuit

confronted here—but the court below declined to

enforce Justice Scalia’s Pennell principles, stating that

they had not been adopted by a majority of this Court.

Pet. App. 22a-23a n.25.

The Court should grant review to expressly

adopt the well-reasoned principles Justice Scalia

articulated in Pennell.

III.

The Court Should Grant the Petition to

Protect the Property Rights of Minnesota

Property Owners and Provide Clear

Guidance on Rent-Control-Based Takings

Claims.

Absent reversal by this Court, the Second

Circuit’s decision upholding New York’s RSL will

likely have disastrous effects on property owners—

including MHA’s members in Minnesota.

Indeed, the effects of the Second Circuit’s

decision are already being felt in Minnesota. Recently,

the District of Minnesota relied on the Second Circuit’s

decision to uphold rent stabilization laws in St. Paul,

Minnesota against a regulatory-taking challenge. See

Woodstone Ltd. P’ship v. City of Saint Paul, No. 22-CV1589 (NEB/DLM), 2023 WL 3586077 (D. Minn. May

22, 2023).

In 2021, a slim majority of St. Paul’s generalelection voters made it the first city anywhere in the

15

Midwest to enact a rent-control ordinance. See

Woodstone Ltd. P’ship, 2023 WL 3586077, at *1. The

St. Paul ordinance parallels the RSL in multiple ways:

it generally limits rent increases to 3% within a 12month period on any residential rental property, and

it prohibits owners from recovering apartments for

their or their families’ personal use unless the owner

offers the tenant a similar apartment at a similar rent

(if available). See City of St. Paul Ordinance 22-37 at

§ 193A.05(b)(2) (adopted Sept. 21, 2022) (amending St.

Paul Leg. Code § 193A.01 et. seq.) (accessible at

https://tinyurl.com/STPord23).

As economists have long predicted, this law

immediately caused the opposite of its intended effects.

As the district court in the Woodstone case observed,

within a few months of the ordinance being approved,

St. Paul’s residential housing supply took a significant

hit: new multifamily building permits decreased over

80% compared to the year before, financing dried up

for new-housing developers, and numerous housing

projects (including affordable housing projects) had to

be paused. See Woodstone Ltd. P’ship, 2023 WL

3586077, at *2.

Two residential property owners sued the City

of St. Paul, asserting (among other claims) that the St.

Paul ordinance constituted a non-categorical

regulatory taking under the Fifth Amendment. Id. at

*16. The plaintiffs asserted the same or similar

regulatory-takings arguments brought by the

Petitioners in this suit, including an argument that

Justice Scalia’s concurrence in Pennell should be

adopted. But the district court rejected those

arguments and instead explicitly relied on the Second

Circuit’s analysis of New York’s RSL in this case to

16

uphold St. Paul’s rent stabilization ordinance. Id. at

*17 n.13, *18.

The Second Circuit’s ruling, which the District

of Minnesota followed in Woodstone, may embolden

other Minnesota cities to enact similarly intrusive

ordinances. Several Minneapolis city council members

have expressed support for rent control—against the

recommendations of city staff, who (among other

things) counseled the City of Minneapolis to wait for

the outcome of the Woodstone case.3 This Court’s

review is needed to provide definitive guidance for

cities in Minnesota and elsewhere.

The Takings Clause is especially important in

rent control cases like this one. The Takings Clause

was intended to provide property owners with “some

extra measure of protection” from the failures of the

political process, particularly where a majority who

are not property owners inflict onerous restrictions on

the rights of property owners through the ballot.

William

Michael

Treanor,

The

Original

Understanding of The Takings Clause and the

Political Process, 95 COLUM. L. REV. 782, 850–51

(1995). Property owners and landlords are vastly

outnumbered by the combined voting power of tenants

who are the intended beneficiaries of rent control laws.

Given this disparity in voting power, public uses—like

providing subsidized rental housing—can readily be

foisted upon “owners who, for whatever reasons, may

be unable to protect themselves in the political process

See Susan Du, Minneapolis city staff report recommends

against adoption of rent control, STAR TRIBUNE (April 14, 2023),

https://tinyurl.com/msprc23; see also CITY OF MINNEAPOLIS, Rent

Stabilization Staff Analysis 15 (April 2023) (available at

https://tinyurl.com/msprep23).

3

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against the majority’s will[,]” which in turn benefits

those “citizens with disproportionate influence and

power in the political process[.]” Kelo v. City of New

London, 545 U.S. 469, 496, 505 (2005) (O’Connor, J.,

dissenting).

The

decision

below

eviscerates

the

constitutional protections that the Takings Clause was

designed to provide. Granting the writ will allow this

Court an opportunity to resolve the Circuit split and

clarify the law—for the benefit not just of Petitioners

in this case, but also for property owners nationwide,

including in Minnesota, who have already been

harmed by the ruling below.

CONCLUSION

The petition for a writ of certiorari should be

granted.

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Dated: June 9, 2023

Respectfully submitted,

NICHOLAS J. NELSON

CROSSCASTLE PLLC

333 Washington Ave. N

Ste. 300-9078

Minneapolis, MN 55401

612-429-8100

nicholas.nelson@crosscastle.com

PHILIP J. KAPLAN

JOSEPH T. JANOCHOSKI

ANTHONY OSTLUND LOUWAGIE

DRESSEN & BOYLAN P.A.

90 South Seventh Street

Suite 3600

Minneapolis, MN 55402

Telephone: (612) 349-6969

pkaplan@anthonyostlund.com

jjanochoski@anthonyostlund.com

Counsel for Amicus Curiae

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