Month: February 2020

A major progressive-backed overhaul of rent regulations continues to cause chaos in New York City’s real estate market, following the issuance of new regulatory guidance that bans real estate brokers from charging fees to the tenants they find for landlords.

It’s common practice in New York City for landlords to hire real estate brokers to fill empty units. These brokers will then charge tenants a fee, which typically amounts to 15 percent of an apartment’s annual rent.

In June 2019, state lawmakers passed a major update to the state’s rental regulations that strengthened existing rent control laws, capped security deposits and apartment application fees, and also banned landlords from charging other fees at the beginning of a tenancy.

Yesterday, news broke that New York’s Department of State had unexpectedly issued regulatory guidance interpreting that latter provision of the June rent law to ban the practice of applying these brokerage fees to tenants.

The industry has so far reacted with a mix of panic and confusion.

“That’s insane,” said real estate lawyer Bruce Cohen to The Real Deal. “It’s an all-hands on deck thing because this came out of left field,” a representative of the Real Estate Board of New York (REBNY), a trade association, told The New York Times, warning of “dire” consequences for the industry.

Without the ability to pass brokerage fees onto tenants, landlords are saying they will either just raise rents or forgo hiring brokers altogether. The first option is only available to the owners of unregulated, market-rate apartments in the city. Owners of rent-stabilized units—where rent increases are set by the city and landlords are limited in their ability to pass costs onto tenants—will have to find their own renters or absorb the full cost of these brokerage fees.

“Owners in rent-stabilized apartment units are going to have to make really tough decisions about whether they even invest in brokers, so you are putting the broker industry in huge jeopardy,” says Jay Martin of the Community Housing Improvement Program (CHIP), which represents small landlords.

That would obviously be bad for the brokers themselves. It would also be bad for tenants and landlords, says Martin. The entire reason a brokerage industry for apartment rentals exists in New York City, he tells Reason, is because landlords often lack the financial or logistical bandwidth to show hundreds or even thousands of units to potential tenants.

“It’s not really a situation where small building owners can just put a for rent sign out on their door. This is a situation where brokers serve a vital need as the link between tenants and owners,” he says.

The sudden prohibition on charging renters brokerage fees is only the latest disruption landlords have experienced as a result of the state’s new rent regulations.

That legislation also limited landlords’ ability to pass on the costs of apartment improvements to tenants through rent increases. A survey of CHIP’s members found 69 percent of them had decreased their spending on renovations by 75 percent or more.

Other provisions in the law revoked building owners’ right to deregulate rent-stabilized apartments (charge market-rate rents) once rents reached a certain level. That’s resulted in a near 40 percent drop in the sale of rent-stabilized buildings, and steep declines in these buildings’ value. (There’s some evidence that building sales are recovering slightly in response to the collapse in building values.)

“If the government keeps doing this, we are going to see a rapid insolvency of the housing market in New York state,” Martin says.

The Department of State guidance, which was issued last Friday, is just that; guidance. That means the department can reverse it unilaterally, an outcome Martin said CHIP will be fighting for. RENBY has said that they are considering lawsuits to reverse the guidance.

from Latest – Reason.com https://ift.tt/2UuUDwF
via IFTTT

When Wilmer Maldonado Rodriguez, 36, was found dead Sunday in New Cassel, New York, police and prosecutors quickly went to work—not just on solving the crime, but on trying to blame recent reforms to how information is shared with criminal defendants.

Rodriguez had been attacked and stabbed, allegedly by members of gang MS-13, in 2018, and he had agreed to testify against his attackers. He died right as the cases move forward against three alleged assailants. If MS-13 was responsible, there are a number of ways it could have tracked down Rodriguez. But Nassau County police and prosecutors were quick to the lay the blame on the “discovery” laws that came into effect with the new year.

Discovery rules guide how evidence must be shared between police, prosecutors, and defense attorneys. Until this year, New York had notoriously secretive rules that allowed prosecutors to withhold evidence from the defense until the last possible moment. Prosecutors and police insisted this was necessary to protect witnesses from retaliation. Defense attorneys pointed out that this also prevented them from preparing for trial, and that it was used to force defendants to accept plea deals without knowing what evidence the state had against them. (For some comparisons to other states, scroll down to page 22 in this New York Civil Liberties Union analysis.)

The changes that New York just implemented put the state in line with most of the rest of the country, but you wouldn’t know that from the screaming. Nassau County Police Commissioner Patrick Ryder held a press conference Wednesday to blame the new discovery rules for Rodriguez’s death. According to Newsday, Ryder said that harassment of Rodriguez began after the new discovery law forced prosecutors to give Rodriguez’s name to defense attorneys.

But Ryder eventually had to acknowledge that there was no evidence linking the new rules to Rodriguez’s death. Under the revised laws, prosecutors are still able to ask judges for protective orders to seal the identities of witnesses if releasing the information could put them in danger. Prosecutors had done so here, and a judge had kept the information sealed until December. Then the judge disclosed the names to defense attorneys, but under orders not to share the names until the trials began.

So the only way the new discovery rules could be responsible for Rodriguez’s death would be if the defense attorneys violated the judge’s orders and shared them with the defendants. That’s quite an accusation to be making without evidence. And indeed, after saying we “don’t know if the defense counsel turned that info over to the defendants,” Ryder later in the day issued a statement acknowledging there was “no direct link between the death of Wilmer Maldonado Rodriguez and criminal justice reform.” Attorneys representing two of the defendants have denied sharing the witnesses’ names with their clients.

Even though there’s no evidence at this point linking the murder to the reforms, Nassau County District Attorney Madeline Singas still put out a statement subtly attacking the changes: “This case underscores the importance of safeguarding the identities of witnesses and victims of crime and our hearts are with Mr. Maldonado’s family and friends as we grieve his loss.”

To reiterate, New York’s new discovery laws aren’t taking case information-sharing into some wild, unheard-of space. It puts it in line with the vast majority of other states (including Texas and Florida, not exactly known for coddling defendants) by requiring that this information be disclosed to defense teams. The new rules should not be “controversial.” They’re the national norm. But police and prosecutors are using this unfortunate death to make it appear as though these rules are outrageously lax and a danger to the community. Don’t fall for it.

from Latest – Reason.com https://ift.tt/2GWYYkn
via IFTTT

Dragon’s Ascent is a video game that rewards skillful players with cash. Regulators in D.C. and Virginia want to crack down on it, so they’re moving to subject games of skill to the same sorts of rules that govern games of chance.

Hundreds of these machines have already appeared in stores and restaurants throughout Virginia, and the D.C. sports bar Penn Social wants to install the game too.

D.C. law defines gambling as “playing any game of chance for money or property.” In a letter last October to the city’s Alcoholic Beverage Regulation Administration, D.C. Deputy Attorney General Brian Flowers pointed out that Dragon’s Ascent is not a gambling machine because it doesn’t use a random-number generator or compensating algorithm to change the odds of winning. Players can cash out at any time and receive their refund from the establishment operator. It “is possible for a player to ‘win’ or make money every single time,” Flowers added, “if the player is dedicated and patient enough.”

Mayor Muriel Bowser is urging the D.C. Council to change the law so the city can do something about the game. “Immediate action is necessary to regulate these electronic devices before they infiltrate the city,” Bowser said in a December letter to the council chairman, Phil Mendelson. Bowser fears that Dragon’s Ascent and other games of skill may pop up at establishments that don’t possess Alcoholic Beverage Control licenses, where the Council has no jurisdiction. Virginia has lost around $140 million in revenue thanks to unregulated games of skill, she warned.

For the sake of “immediate public safety concerns,” Bowser intends to submit a permanent bill addressing the licensing, inspection, enforcement, and taxation of skill machines. The bill would build on a set of emergency measures enacted yesterday by the D.C. Council. Under yesterday’s legislation, the games will be restricted to players over 18, and liquor-licensed establishments will have to apply for the right to install the machines.

“Right now, Dragon’s Ascent is a legal game of skill,” Councilmember Kenyan McDuffie (D–Ward 5) told The Washington Post. “So it’s important for the consumer protections to be in place now rather than later.”

Virginia legislators have also been looking for ways to tighten the government’s controls on these games. Earlier this month, a bill was introduced in the Virginia Senate that would amend the state’s definition of “gambling device.” Currently, this refers to any machine or apparatus that uses “elements of chance” to determine whether to “eject something of value or determine the prize or other thing of value to which the player is entitled.” Under the proposed legislation, machines “are no less gambling devices if they indicate beforehand the definite result of one or more operations but not all the operations. Nor are they any less a gambling device because, apart from their use or adaptability as such, they may also sell or deliver something of value on a basis other than chance.”

Unregulated games of skill, Virginia legislators say, have lowered state lottery profits. Bowser’s warnings about lost revenue suggest that she too is worried about the bottom line. Under all the fretful language about public health and order, these look like efforts to maximize the government’s revenue streams.

from Latest – Reason.com https://ift.tt/2SmYCsy
via IFTTT

No rules this time—just a little history.

Alexander Hamilton was many things: aide to Gen. George Washington, secretary of the treasury, major general of the U.S. Army, lover, cheater, duelist, musical phenomenon. But few people know his immensely influential role in American free press law—just months before his fatal duel.

Today, we think of libel as defamatory falsehood: false written statements—especially lies, but sometimes honest mistakes—that injure a person’s reputation. And we also think of libel as a civil claim; criminal libel prosecutions are very rare.

In 1700s England, though, criminal libel cases were common, and they covered many written statements that harmed a person’s reputation even if they were true. Such statements were outlawed in part because they were seen as likely to produce duels. (Hamilton died because of his harsh statements, albeit oral statements, about Aaron Burr.) And when said about government officials, such defamatory statements—again, even if true—were seen as undermining the government’s authority. “The greater the truth, the greater the libel,” some said.

American law was based on English law, so many Americans assumed American law would take the same view. In the famous colonial-era 1735 John Peter Zenger trial, the defense had argued that truth must be a defense in libel cases. But though the jury acquitted Zenger, such jury decisions set no legally binding precedent.

Enter Alexander Hamilton in 1803. Thomas Jefferson was president; Hamilton was a prominent New York lawyer. When Harry Croswell, an anti-Jefferson newspaper editor, was prosecuted in New York state court for libeling Jefferson, Hamilton came to Croswell’s defense.

Croswell’s publication had alleged that Thomas Jefferson had paid another editor, James Callender, to make scurrilous accusations against Washington and Adams. This allegation of Croswell’s injured Jefferson’s reputation, the prosecution charged, thus making it a libel—without regard to whether it was true. And it also injured the nation, making it a so-called “seditious libel.”

Croswell was convicted, after the trial judge instructed the jury that truth was not a defense in libel cases. Croswell appealed, and Hamilton, representing Croswell, argued that truth should have been a defense: “The Liberty of the Press consists, in my idea, in publishing the truth, from good motives and for justifiable ends, though it reflect on government, on magistrates, or individuals. It is essential to say, not only that the measure is bad and deleterious, but to hold up to the people who is the author, that, in this our free and elective government, he may be removed from the seat of power.”

Today, that standard actually would diminish First Amendment protection. At least as to matters of public concern, the Court held in 1964, prosecutors must always prove an alleged libel was false, regardless of whether it was said “from good motives and for justifiable ends.” But in 1803, Hamilton’s position was a great step toward broader legal protection for criticism of government.

And Hamilton’s position swept the nation. Not at first: The New York court split 2–2, thus leaving Croswell’s conviction standing. But Justice James Kent, who would become one of the most influential judges and legal writers of the early 1800s, endorsed Hamilton’s views in his opinion. In 1805, the New York State Legislature enacted a statute implementing Hamilton’s view that truth was always a defense when published “with good motives and for justifiable ends”—phrasing that Hamilton pioneered. In the decades after that, many state constitutions were framed precisely this way. To this day, 20 state constitutions contain Hamilton’s formula: Arkansas, Florida, Illinois, Iowa, Kansas, Michigan, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, South Dakota, Utah, West Virginia, Wisconsin, and Wyoming.

Hamilton and Justice Kent had become close friends in the years before the Croswell case. While they were in Albany for the court sitting that included the Croswell argument, Hamilton, Kent, and a few others had dinner together. Over dinner, Hamilton remarked that he thought Aaron Burr was dangerous and untrustworthy. Burr was at the time planning to run for governor of New York, though he ended up being beaten by Morgan Lewis, the trial judge in Croswell’s case.

Another man at the dinner reported on these remarks, and an Albany newspaper then referred to them. Burr demanded that they be retracted. Hamilton refused. Burr challenged Hamilton to a duel. And Hamilton didn’t live to see his view of the freedom of the press become part of American law.

Written by Eugene Volokh, who is a First Amendment law professor at UCLA.
Produced and edited by Austin Bragg, who is not.
Additional graphics by Joshua Swain

This is the tenth episode of Free Speech Rules, a video series on free speech and the law. Volokh is the co-founder of The Volokh Conspiracy, a blog hosted at Reason.com.

This is not legal advice.
If this were legal advice, it would be followed by a bill.
Please use responsibly.

Music: “Lobby Time,” by Kevin MacLeod (Incompetech.com). Licensed under Creative Commons: By Attribution 3.0 creativecommons.org/licenses/by/3.0/

from Latest – Reason.com https://ift.tt/2S6GPXM
via IFTTT