The "takings clause" of the Constitution bans government appropriation of property without just compensation. The 14th Amendment makes that and other rights applicable not only to the federal government but to state and local governments.
James and Jeanne Harmon, who own and live in a small brownstone in Manhattan, filed suit complaining that the city's Rent Stabilization Law forced them to allow reduced rent for three tenants, and their designated successors, for 90 years without regard to need. The Harmons said the rents were set by law at 59 percent below market.
A federal judge dismissed the complaint and a federal appeals court in New York agreed. In a summary order, the appeals court said, "In some instances, government regulation of private property may be 'so onerous that its effect is tantamount to a direct appropriation or ouster -- and that such regulatory takings may be compensable under the Fifth Amendment,'" citing U.S. Supreme Court precedent.
"Here, there is no dispute that the RSL was enacted and became applicable to the Harmons' property many years before they took ownership of it [in 2005]," the appeals court order said. "Thus, the Harmons' argument that the RSL impairs their lease agreements with rent-stabilized tenants is without merit."
The U.S. Supreme Court rejected the case without comment. The rejection sets no precedent.