Seawall Associates v. City of New York

• Decision Date: 01 December 1988
• Citation: 534 N.Y.S.2d 958,142 A.D.2d 72
• Parties: SEAWALL ASSOCIATES and Anbe Realty Co., Plaintiffs-Respondents, and 459 West 43rd Street Corp., Eastern Pork Products Company, Sutton East Associates-86, and Channel Club, Plaintiffs-Respondents-Appellants, v. The CITY OF NEW YORK, et al., Defendants-Appellants-Respondents, and Richard Wilkerson, Edgar Ferrell, Frank Alicia, Tom Williams, Danny Sogliuzzo, Nicholas Tallerrico and The Coalition for the Homeless, Defendants-Intervenors-Appellants. Action 1. EASTERN PORK PRODUCTS COMPANY, 459 West 43rd Street Corp., Jambod Enterprises, Inc., Mygatt/Perry, Felix Ziade and Rocco Imperial, Plaintiffs-Respondents-Appellants, v. The CITY OF NEW YORK, et al., Defendants-Appellants-Respondents. Action 2. TESTAMENTUM, Plaintiff-Respondent, v. The CITY OF NEW YORK, et al., Defendants-Appellants. Action 3.
• Court: New York Supreme Court — Appellate Division

Page 958

534 N.Y.S.2d 958

142 A.D.2d 72

SEAWALL ASSOCIATES and Anbe Realty Co., Plaintiffs-Respondents and 459 West 43rd Street Corp., Eastern Pork Products Company Sutton East Associates-86, and Channel Club Plaintiffs-Respondents-Appellants, v. The CITY OF NEW YORK, et al., Defendants-Appellants-Respondents and Richard Wilkerson, Edgar Ferrell, Frank Alicia, Tom Williams, Danny Sogliuzzo, Nicholas Tallerrico and The Coalition for the Homeless, Defendants-Intervenors-Appellants. Action 1.

EASTERN PORK PRODUCTS COMPANY, 459 West 43rd Street Corp., Jambod Enterprises, Inc., Mygatt/Perry, Felix Ziade and Rocco Imperial, Plaintiffs-Respondents-Appellants, v. The CITY OF NEW YORK, et al., Defendants-Appellants-Respondents. Action 2.

TESTAMENTUM, Plaintiff-Respondent, v. The CITY OF NEW YORK, et al., Defendants-Appellants. Action 3.

Supreme Court, Appellate Division, First Department.

Dec. 1, 1988.

Nathan Dershowitz, of counsel (Sheldon D. Camhy and George G. Nelson with him on the brief, Dershowitz & Eiger, P.C. and Shea & Gould, New York City, attorneys), for plaintiff-respondent Seawall.

Marvin L. Schwartz, of counsel (Shapiro & Schwartz, New York City, attorneys), for plaintiff-respondent Anbe.

Philip H. Schaeffer, of counsel (Jane D. Connolly and Steven Mairella with him on the brief, White & Case, New York City, attorneys), for plaintiffs-respondents-appellants in Actions 1 and 2 other than Sutton East and Channel Club.

Gary M. Rosenberg, of counsel (Franklin R. Kaiman, New York City, and Theresa J. Hecker with him on the brief, Rosenberg & Estis, P.C., New York City, attorneys), for plaintiffs-respondents-appellants Sutton East and Channel Club.

Elizabeth Dvorkin, (Leonard Koerner with her on the brief, Peter L. Zimroth, New York City, attorney), for Municipal defendants.

Saralee E. Evans, of counsel (Norman Siegel, Wayne G. Hawley and Anne R. Teicher, New York City, with her on the brief, New York Civil Liberties Union, West Side SRO Law Project, Goddard Riverside Community Center, MFY Legal Services, Inc. and East Side SRO Legal Services), for individual defendants-intervenors-appellants.

Virginia Shubert, of counsel (Robert M. Hayes and Mitchell S. Bernard, New York City, with her on the brief), for defendant-intervenor-appellant The Coalition for the Homeless.

Edmund J. Burns, of counsel (Maria Scorcia with him on the brief, Burns, Kennedy, Schilling & O'Shea, New York City, attorneys), for plaintiff-respondent Testamentum.

Carol S. Keenan, Bronxville, of counsel (Ruben Klein, P.C. and Ronald A. Zumbrun, Edward J. Connor, Jr. and Timothy A. Bittle, Sacramento, Cal., attorneys), for Pacific Legal Foundation as amicus curiae.

Before ROSS, J.P., and CARRO, ASCH and ELLERIN, JJ.

ROSS, Justice Presiding.

The issue in these consolidated actions is whether New York City Local Law 9, which was approved March 5, 1987 and which, inter alia, provides for a five-year moratorium on the demolition or conversion of Single Room Occupancy housing, is constitutional.

For more than ten years, the governmental officials of the City of New York have been wrestling with the problems related to single room occupancy (SRO) housing.

An SRO has been defined, as a living unit, which shares a kitchen and/or bathroom with one or more other units (see, Blackburn, Single Room Occupancy in New York City, 1986 Report-prepared for the City of New York Department of Housing, Preservation and Development). SRO units are found in hotels, apartment buildings, and, even private homes. We "judicially notice" (Prink v. Rockefeller Center, 48 N.Y.2d 309, 316-317, 422 N.Y.S.2d 911, 398 N.E.2d 517 (1979)), as a matter of common knowledge, that for generations, SRO units have served as a relatively inexpensive form of shelter for persons of low and moderate income.

Over the past decade, two major factors have caused a significant decline in the number of SRO units available to the poor. First, upon the basis of adopting the wide-spread opinion that SRO units were "substandard" housing, the City adopted a policy of encouraging the demolition, and then redevelopment of the buildings containing such units. Second, due to the rapid rise in real estate values in New York City, particularly in Manhattan, where 75 percent of the SRO units are located, many SRO owners found it more profitable to convert their buildings to commercial and other residential uses, rather than to continue to operate them as SROs.

Mr. Paul A. Crotty, Commissioner of the New York City Department of Housing Preservation and Development (HPD), in an affidavit, dated April 13, 1987, which was submitted in support of the City's position in the instant litigation, stated, in pertinent part:

"Significant hardships and social costs have attended the decline in the number of SRO units. SRO residents have frequently been pressured to vacate units through the use of threats, violence, reductions in essential services and other forms of harassment. The elderly, physically and mentally disabled and non-English speaking residents of SROs have been especially vulnerable to such tactics. Because of a severe shortage of lower cost housing in New York City, displaced SRO residents often find it difficult or impossible to find new housing.... Moreover, there is substantial evidence that the displacement of SRO residents and the loss of these units has contributed to the City's growing homeless population. Providing shelter for the homeless has placed a significant strain on the City's resources. The City provides shelter for a far greater number of homeless people than any other City in the country. Indeed, New York City currently houses as many homeless individuals in its shelters as it did at the height of the Great Depression ...".

As soon as the City government realized that SRO units were disappearing at an alarming rate from the City's housing stock, with the result that the number of affordable rental housing units for the poor was shrinking, the City abandoned its policy, mentioned supra, of encouraging the destruction and redevelopment of SRO units, and, took steps to stop the decline in this form of housing.

In 1982, the City signalled its change in policy, by amending the New York Administrative Code (Code), § 11-243, (i)(6), so as to eliminate the J51 property tax abatements for the conversion of SRO dwellings to other uses; and, the Court of Appeals in Replan Dev. v. Dept. of Hous., 70 N.Y.2d 451, 522 N.Y.S.2d 485, 517 N.E.2d 200 (1987), app. dsm'd. 485 U.S. 950, 108 S.Ct. 1207, 99 L.Ed.2d 409 (1988), held that legislation constitutional.

Subsequently, in an effort to discourage the harassment of SRO residents by owners, who were seeking to empty their buildings, in order to make more profitable use of them, the City Council, in 1982, enacted the Unlawful Eviction Law (see, Local Law 56 of 1982), and, funded the Special Housing Unit in the New York County District Attorney's Office, which specialized in the investigation and prosecution of corrupt landlords, who used unlawful means to drive SRO tenants out.

Thereafter, in 1983, for the purpose of slowing up efforts at alteration or demolition of SRO properties, the Council enacted Local Law 19 of 1983, which provided that the City Department of Buildings could not issue a permit for the alteration or demolition of an SRO building, unless the Commissioner of HPD certified that there had been no harassment of the residents of such a building during the previous thirty-six months. Furthermore, this Law states, if HPD certification is denied, then the Department of Buildings is prohibited (see, Code, § 27-198) from issuing this type of permit for a period of thirty-six months from the date of the denial of the certification. This regulatory scheme was sustained, after a federal constitutional challenge, in Sadowsky v. City of New York, 732 F.2d 312 (2d Cir.1984).

When the enactment of the laws, discussed supra, did not stem the decline in the number of SRO units, the Council enacted Local Law 59 of 1985. In enacting this Law, the Council declared that it had found "a serious public emergency exists ... caused by the loss of single room occupancy dwelling units housing lower income persons ..." (see, Local Law 59 of 1985, section 1). The purpose of this Law was to maintain the status quo, while the City reformulated its policy of dealing with the SRO problem. Our examination of Local Law 59 indicates that it, in substance, placed an eighteen-month moratorium, retroactive to January 9, 1985, on the demolition or conversion of most categories of SRO properties, and, mandated a study of SRO housing.

Mr. Anthony J. Blackburn, as Project Director, conducted the mandated study. In 1986, he issued to the HPD a report, which was prepared by Urban System Research & Engineering, Inc., and entitled: SINGLE ROOM OCCUPANCY IN NEW YORK CITY.

Review of the Blackburn study by us indicates it found that the number of SROs was diminishing, SROs house a predominantly poor population, and for SRO tenants, there are no housing alternatives. Furthermore, in substance, the study recommended a major effort by the City to preserve SROs, owners of SROs should be allowed to demolish them, as long as they replace the units in some other location, and, the needs of SRO tenants would be better served if the landlords of SROs were not-for-profit corporations.

Before City officials had finished evaluating the Blackburn study, and formulating a new SRO housing plan, the moratorium, established by Local Law 59, expired on July 9, 1986. Therefore, the Council enacted Local Law 22 of 1986, which extended the moratorium on demolition or conversion of SROs to December 31, 1986. Local Law 22 also banned "warehousing", by requiring SRO owners to maintain the units in habitable condition, and, to make a good faith effort to rent them. Additionally, if an SRO unit was not occupied by a bona fide tenant for a period of thirty days or...