NAR Backs Property Owners Challenging Costly NYC Artist Housing Fee

The National Association of REALTORS® (NAR), joined by the New York State Association of REALTORS® (NYSAR) and a coalition of industry partners, filed an amicus brief supporting a group of New York City property owners challenging a city land use fee, otherwise known as an exaction. The property owners are part of the Joint Live Work Quarters for Artists (JLWQA) program and have petitioned the U.S. Supreme Court to invalidate the exaction as an unconstitutional taking under the Fifth Amendment. 

The dispute centers on the JLWQA program, a decades old initiative in SoHo and NoHo that allowed certified artists and their families to live in their studios and industrial-zoned buildings. The program played a key role in revitalizing these neighborhoods. 

Over time, however, the city largely stopped enforcing the requirement that only certified JLWQA artists could occupy these units. Many are now inhabited by non-certified residents, and the restriction has little practical effect. Despite this, when the city rezoned the neighborhoods in 2021 to allow broader residential use, it singled out JLWQA properties. Owners must now pay a steep, nonrefundable fee, exceeding 100 dollars per square foot and often totaling hundreds of thousands of dollars, to remove the outdated restriction before they can sell, transfer, or redevelop their property. 

Property owners argue that the fee is unfair and effectively traps them with unsellable properties, since there is no meaningful market for units restricted under the JLWQA program. A lower court agreed, finding that the city failed to show any connection between the fee and a legitimate impact caused by the owners. However, the appellate court reversed that decision, concluding that constitutional protections against government takings do not apply because the city is demanding money rather than land. 

The owners are now asking the U.S. Supreme Court to intervene. The central question is whether monetary demands imposed as a condition of using or selling property should be subject to the same constitutional limits as demands for land. 

NAR and its partners warn that allowing governments to impose significant fees without rigorous legal scrutiny could set a troubling nationwide precedent. The Court’s decision on whether to hear the case, and how it ultimately rules, could shape how local governments across the country impose fees in zoning and land use decisions, with implications for property rights far beyond New York City.