The “Reasonably Reliable and Relevant” Standard for Vacancy Surveys & Expanded Rent-Reduction Powers under the ETPA

Introduction

Matter of Hudson Valley Property Owners Association Inc. v. City of Kingston (2025) marks the New York Court of Appeals’ first comprehensive treatment of two pivotal questions arising from the 2019 Housing Stability and Tenant Protection Act (HSTPA) and the Emergency Tenant Protection Act of 1974 (ETPA), newly extended statewide:

What evidentiary threshold must a municipality satisfy when declaring a “housing emergency” and opting in to rent-stabilization?
How far may a local Rent Guidelines Board (RGB) go when setting across-the-board rent adjustments—especially downward adjustments—and when retroactively defining “fair market rent”?

The appellants—private landlords and their Hudson Valley association—sought to overturn Kingston’s 2022 emergency declaration and invalidate two RGB guidelines: (1) a “fair-market-rent” rule pegged to 116% of January 1 2019 rents and (2) a 15% downward across-the-board rent reduction for one- and two-year leases commencing between August 1 2022 and September 30 2023. Judge Halligan, writing for a unanimous Court, rebuffed every challenge and, in doing so, forged a new doctrinal template for future litigation.

Summary of the Judgment

1. Emergency Declaration Upheld. The Court announced a fresh standard: a vacancy-rate finding survives judicial scrutiny so long as it “rests on a reasonably reliable and relevant measure” of the actual vacancy rate. The burden of disproving reliability sits with the challenger. Applying the standard, Kingston’s 2022 survey—showing <2% vacancy after a no-response-equals-no-vacancy presumption—was deemed adequate, despite methodological quibbles raised by landlords.

2. Fair-Market-Rent Guideline Sustained. The guideline did not effect an impermissible retroactive penalty under Regina Metro because (a) DHCR regulations bar refunds for periods more than two years before Kingston’s August 1 2022 effective date, and (b) landlords had been on statutory notice since HSTPA’s June 14 2019 enactment that rent-stabilization could reach them.

3. 15 % Rent-Reduction Guideline Sustained. Although preservation doctrines shielded some arguments, the Court signaled that section 4(b) of the ETPA empowers RGBs to issue both upward and downward “annual guidelines for rent adjustments,” dispelling the notion that only increases are permissible.

Analysis

1. Precedents Cited & Their Influence

Spring Valley Gardens Assoc. v. Marrero, 68 N.Y.2d 627 (1986)
Previously upheld a declaration but offered scant guidance. The Kingston decision fills that doctrinal gap with the “reasonably reliable and relevant” test, effectively updating Spring Valley for the HSTPA era.
Executive Towers at Lido, LLC v. City of Long Beach, 37 A.D.3d 650 (2d Dept 2007)
Quoted for the proposition that an emergency declaration grounded in “a good-faith study derived from precise data” is valid. The Court endorsed, but sharpened, that formulation.
Matter of Regina Metropolitan Co., LLC v. DHCR, 35 N.Y.3d 332 (2020)
Landlords’ primary retroactivity weapon. The Court distinguished Regina, stressing that Kingston’s guideline did not reopen claims inoculated by prior law and that owners were on notice post-HSTPA.
Matter of Freeport Randall Co. v. Herman, 56 N.Y.2d 832 (1982)
Cited to show landlords execute leases “subject to the power of the state” to impose rent regulation after the fact, weakening the retroactivity objection.

2. Legal Reasoning

a. The New Vacancy-Survey Standard.

The ETPA is silent on survey methodology. Judicial review thus hinges on reasonableness.
The Court consciously avoided a rigid statistical test, opting instead for functional reliability and relevance. This elasticity respects municipal discretion while preventing arbitrary declarations.
Key indicia of reliability in Kingston’s survey: government-derived property list; certified-mail outreach; explicit no-vacancy presumption; ≥70% unit coverage despite only 40% building response; targeted follow-up on largest buildings.
Challengers must do more than propose a “better” method; they must expose fundamental unreliability or irrelevance.

b. Retroactivity & Fair-Market-Rent.

Regina forbids revival of time-barred overcharges that upset vested expectations. Here, no such expectations existed once HSTPA extended ETPA statewide.
DHCR’s own two-year refund cap (9 NYCRR §2502.3[a][2]) operates as a prophylactic, ensuring refunds do not run back prior to Aug 1 2020.
Because the regulation only references January 1 2019 to calculate present rent rather than to compel refunds before that date, its retroactive effect is incidental and permissible.

c. Scope of RGB Authority.

Section 4(b) empowers RGBs to set “annual guidelines for rent adjustments.” The statute is facially neutral—no language restricts adjustments to increases.
The Court implicitly recognized that rent reductions may be necessary to balance tenant affordability against owner returns when market conditions warrant.
Arguments that RGB failed to weigh all section 4(b) factors (operating costs, vacancy rate, etc.) were deemed unpreserved—hinting future litigants must meticulously raise such claims below.

3. Anticipated Impact

Municipal Playbook Finalized. Cities, towns, and villages across New York now have a judicially endorsed framework for conducting vacancy studies: measured flexibility coupled with transparent methodology.
Litigation Burden Shift. Landlord challengers bear a heavier evidentiary burden; merely producing a competing survey will seldom suffice.
RGB Policy Latitude. Boards may confidently explore downward adjustments and broad fair-market-rent formulas, provided DHCR regulations gird against excessive retroactivity.
Legislative Synergy. The 2023 statutory amendments (authorizing fines for non-respondent owners and codifying the no-vacancy presumption) dovetail with the Court’s reasoning, likely reducing factual disputes in future cases.
Statewide Ramifications. Expect more upstate municipalities to opt in, emboldened by Kingston’s validation; expect owners to redirect litigation toward procedural and factor-weighing attacks rather than wholesale invalidation attempts.

Complex Concepts Simplified

ETPA (Emergency Tenant Protection Act). A 1974 New York statute enabling local governments to regulate rents once they declare a “housing emergency” (<5% vacancy) for certain pre-1974 buildings with 6+ units.
HSTPA (Housing Stability and Tenant Protection Act) 2019. Sweeping reforms that, inter alia, expanded ETPA eligibility statewide.
Rent Guidelines Board (RGB). A local body appointed via DHCR that annually sets permissible rent adjustments for stabilized apartments within the municipality.
Fair-Market-Rent Appeal. Administrative process allowing tenants (or owners) to challenge a unit’s “initial legal regulated rent” as excessive, potentially yielding refunds.
Retroactivity Doctrine. Constitutional principle that legislation (or regulation) cannot—absent strong justification—alter substantive legal consequences of past conduct once immunity has vested. Regina represents the modern New York articulation.
Article 78 Proceeding. New York’s procedural vehicle for challenging governmental actions as arbitrary, capricious, or contrary to law.

Conclusion

The Court of Appeals’ decision in Hudson Valley Property Owners Association v. City of Kingston does more than resolve a local dispute; it crystallizes statewide doctrine on two fronts. First, it introduces the “reasonably reliable and relevant” standard, striking a pragmatic balance between municipal autonomy and evidentiary rigor when declaring housing emergencies. Second, it affirms broad RGB discretion to enact across-the-board rent reductions and retroactively reference pre-emergency rent levels without running afoul of due-process limitations identified in Regina.

Together, these holdings supply municipalities with a sturdy roadmap for navigating rent-stabilization opt-ins and embolden RGBs to craft aggressive, tenant-protective guidelines, all while delineating clear procedural and substantive guardrails for future litigation.