Court of Appeals Upholds Kingston's Adoption of Rent Stabilization, RGB Rent Appeal Guideline

June 25, 2025

LVT Number: #33734

A group of owners of buildings that became subject to rent stabilization under the City of Kingston’s August 2022 adoption of the ETPA filed a challenge to the city’s actions, arguing that the vacancy study upon which the ETPA adoption was based was flawed. The landlords also challenged orders issued by a newly established Rent Guidelines Board (RGB) that would have reduced current rents.

A group of owners of buildings that became subject to rent stabilization under the City of Kingston’s August 2022 adoption of the ETPA filed a challenge to the city’s actions, arguing that the vacancy study upon which the ETPA adoption was based was flawed. The landlords also challenged orders issued by a newly established Rent Guidelines Board (RGB) that would have reduced current rents.

In 2023, the court upheld Kingston's adoption of the ETPA as reasonable, finding that the city's vacancy survey was conducted in good faith, used a proper methodology, and was based on a common sense analysis of available data. But the court agreed with landlords' challenge to the RGB orders that had determined that any rent increase above 16 percent of the rent charged a tenant on Jan. 1, 2019, constituted a rent overcharge and that, upon renewal, landlords must decrease all rents by 15 percent. The court found that nothing in the ETPA authorized the RGB to make a blanket determination that units were subject to a maximum rent increase and immediate rent reduction.

The owners and the City of Kingston both appealed. The appeals court upheld Kingston's adoption of the ETPA in early 2024 and reversed part of the lower court's decision, now holding that the Kingston RGB wasn't required to conduct a case-by-case assessment to set a rental adjustment guideline or to specify a fair market rent guideline. However, owners couldn't be ordered to pay refunds for rent paid before they were aware of their potential exposure under the ETPA. The Third Department granted the owners permission to appeal further to New York's highest court, which ruled against the owners. 

The Court of Appeals upheld Kingston's vacancy survey despite several errors because the court found the errors didn't significantly alter the results. The Court held that the survey provided a "reasonably reliable and relevant measure of the municipality's actual vacancy rate for the relevant class of housing." The Court also denied the owners' challenge to the Kingston RGB's Fair Market Rent Appeal (FMRA) guideline, which used a pre-HSTPA base date of Jan. 1, 2019, to set the fair market rent. The Court noted it was denying a facial challenge to the FMRA guideline because the DHCR said it could not base any refunds on rents that were charged more than two years before the local effective date in Kingston, which was August 2020. 

As to the challenge to the RGB's adoption of a 15 percent rent reduction as its lease renewal guideline, the Court dismissed the issue on a technicality, leaving the lower court's decision to uphold the rent rollback intact. 

 

 

 

 

 

Matter of Hudson Val. Prop. Owners Assn. Inc. v. City of Kingston: 2025 NY Slip Op 03691 (6/18/25; Halligan, J, Wilson, CJ, Rivera, Garcia, Singas, Cannataro, Troutman, JJ

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