Matter of 826 Marcy Ave., LLC v State of N.Y. Div. of Hous. & Community Renewal

Holding The court affirmed the lower court’s dismissal of the CPLR article 78 proceeding, finding that the DHCR’s denial of the rent stabilization exemption was supported by a rational basis. The agency’s determination was not arbitrary and capricious because the petitioner failed to demonstrate that the building was substantially rehabilitated as required by the operational bulletin.

The court’s words

Judicial review of an administrative determination is generally limited to whether the determination was made in violation of lawful procedure

2026 NY Slip Op 05180, at the official text

An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts

2026 NY Slip Op 05180, at the official text

If the court finds that the determination is supported by a rational basis, it must sustain the determination

2026 NY Slip Op 05180, at the official text

the petitioner failed to establish that the building was substantially rehabilitated, as that term is defined by the applicable operational bulletin

2026 NY Slip Op 05180, at the official text