IN RE: 738 EAST 6TH OWNER (DE) LLC (2025)

Judgments (denominated orders), Supreme Court, New York County (Erika M. Edwards, J.), entered on or about December 6, 2024, which denied the petitions to vacate or annul respondent New York City Department of Housing Preservation and Development (HPD)'s placement of petitioners' buildings on the Certificate of No Harassment (CONH) Pilot Program Building List, and ordering that petitioners' buildings be removed from the list, or finding that petitioners' buildings should be granted a waiver of certification of no harassment, and dismissed the proceedings brought pursuant to CPLR article 78, unanimously affirmed, without costs.

Petitioners challenge HPD's placement of their buildings on the CONH Pilot Program List based on the respective scores that each received on the building qualification index (BQI).  Under the program, buildings with six or more dwellings are evaluated “for distress based on the department's records of open and closed hazardous and immediately hazardous violations of the housing maintenance code, records of paid and unpaid liens for expenses incurred by the department for the repair or elimination of dangerous conditions under the emergency repair program, change of ownership, or any other factor that reasonably indicates distress ․” (Administrative Code § 27–2093.1[a]).  These criteria are promulgated under 28 RCNY 53–03.  If certain criteria are met, the buildings are then placed on the CONH Pilot Program List and subject to additional requirements when applying for construction permits.

Petitioners have failed to establish that 28 RCNY 53–03 is so lacking in reason that it was essentially arbitrary (see Matter of Tri–City, LLC v. New York City Taxi & Limousine Commn., 189 A.D.3d 652, 652, 138 N.Y.S.3d 30 [1st Dept. 2020]).

Further, petitioners each failed to establish that HPD's determination to include their buildings on the CONH Pilot Program List was arbitrary, irrational, or affected by an error of law (see generally Matter of Pell v. Board of Educ. Of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 232, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974];  CPLR 7803[3]).  For several of the buildings, petitioners do not identify the mistakes, if any, HPD may have made in calculating the BQI scores.  In addition, HPD submitted evidence showing its methodology in calculating the buildings' scores based on information derived from databases of violations and repair costs, as well as other documentation in its possession.

The court properly determined that petitioners failed to establish that any of the buildings in question qualified for a waiver, as the petitioners did not meet the prerequisites addressed in Administrative Code of City of N.Y. § 27–2093.1(i).

Petitioners failed to establish that their buildings' placement on the CONH Pilot Program List and additional regulatory requirements resulted in the deprivation of a protected property interest (see generally Matter of IG Second Generation Partners L.P. v. New York State Div. of Hous. & Community Renewal, Off. of Rent Admin., 10 N.Y.3d 474, 482, 859 N.Y.S.2d 598, 889 N.E.2d 475 [2008];  Tang v. Visnauskas, 847 Fed.Appx. 24, 26 [2d Cir. 2021], cert denied ––– U.S. ––––, 142 S.Ct. 349, 211 L.Ed.2d 185 [2021]).  Even assuming that petitioners are correct that the additional regulatory burden may affect their property values, this premise is insufficient to establish that HPD's actions deprived them of protected property interests (see Fusco v. Connecticut, 815 F.2d 201, 205–206 [2d Cir. 1987], cert denied 484 U.S. 849, 108 S.Ct. 149, 98 L.Ed.2d 105 [1987]).  Finally, petitioners have not submitted competent proof to show that the additional regulatory requirements deprive them of their ability to develop or sell these properties.

We have considered petitioners' remaining arguments and find them to be unavailing.