Balanced Housing Solutions has filed a lawsuit against the New York State Division of Housing and Community Renewal, alleging unconstitutional regulatory changes that threaten to dismantle years of investment in rehabilitating New York City's housing stock. The complaint was filed on November 25, 2025, in the United States District Court for the Eastern District of New York, targeting RuthAnne Visnauskas in her official capacity as Commissioner.
The plaintiff, Balanced Housing Solutions (BHS), claims that the Division's retroactive enforcement of new program requirements has effectively nullified the investments made by its members to renovate dilapidated apartment buildings across New York City. BHS argues that these changes were made unilaterally and without public notice, demanding re-regulation of apartments that had been properly deregulated under existing regulations. The lawsuit details how developers had relied on established laws and invested millions to transform substandard buildings into high-quality apartments, only to face new regulatory demands after project completion.
According to BHS, the Division's actions have disregarded their compliance with program requirements and ignored the Safe Harbor Provisions which allowed for deregulation if certain conditions were met. These provisions included replacing 75% or more of building systems and achieving at least 80% vacancy before renovation commenced. The organization contends that these retroactive changes are not only unlawful but also threaten to wipe out hundreds of millions of dollars in investments citywide.
The complaint seeks a declaratory judgment to prevent the Division from applying new program requirements retroactively to projects completed before recent legislative amendments. BHS is asking for injunctive relief to stop what it describes as one of the largest attempts at a regulatory taking in history. They argue that such actions would devastate their members financially and deter future investment in New York City's aging housing infrastructure.
Representing Balanced Housing Solutions are attorneys from prominent law firms specializing in real estate and constitutional law. The case is being overseen by judges from the Eastern District Court with Case ID 1:25-cv-06574.
Source: 125cv06574_Balanced_Housing_Solutions_v_Visnauskas_Complaint_Eastern_District_New_York.pdf