Block v. Hirsh

Facts

Prior to World War I, housing in the United States was usually regarded as an issue best left to state and local governments. In the aftermath of the war, the country experienced a national housing shortage. This impelled federal intervention in the housing market, and in October 1919, Congress passed a statute establishing a commission with the power to regulate rental property in the District of Columbia. The statute allowed for the fixing of fair and reasonable rents, and secured a tenant's right of occupancy so long as he paid his rent and performed by the conditions of his lease. However, it reserved to the owner his right to possession for actual bona fide occupancy, as in to provide a home for himself and his relatives. This right was conditioned on the tenant being given a 30 days' notice to vacate the premises. The statute declared that its provisions were made necessary due to emergencies growing out of the war, and limited its duration to a period of two years.

Block was a tenant in an apartment building located at F Street in Washington. His lease was set to expire on December 31, 1919, but he would be allowed to remain in occupancy under the rental property statute. Hirsh, who had recently purchased the building, notified Block on December 15 and requested that he vacate the premises upon expiration of his lease. Hirsh wanted the premises for his own use, but did not see fit to give the 30 days' notice because he denied the validity of the statute. Block declined, and on review, the Court of Appeals held the statute unconstitutional. Block appealed to the Supreme Court.

Judgment

In a 5-4 decision, the Court upheld the law as constitutional. The majority opinion was written by Justice Oliver Wendell Holmes, Jr. Congress's claim, Holmes contended, was that "circumstances have clothed the letting of buildings in the District of Columbia with a public interest so great as to justify regulation by law." These circumstances constituted a "publi[c], notorious, and almost worldwide fact". There was no reason to doubt that the war had bred unseemly conditions in the district, nor Congress's intention of providing an effective remedy to that end. In times of trouble, Holmes concluded, the private may be affected with a public concern, allowing governmental action otherwise considered impermissible. Moreover, condemnation for public use had been repeatedly upheld by the Court in the fields of mining, irrigation and insurance. Holmes noted that state control of privately owned buildings evoked a peculiar apprehension, but nonetheless was within regulatory reach:

The more pressing question, Holmes said, was whether the statute had gone too far in restricting the entitlement of the property owner. Beyond the general police power, and further beyond the power of eminent domain, an eventual clash with the due process right of the Fifth Amendment was inevitable. If unduly exerted, the legislation would be in violation of the takings clause. However, rate fixing in the public interest was a valid form of regulation, as had been decided in Munn v. Illinois. Additionally, the self-imposed time limitation sufficiently dispelled any trepidation that would have been manifest in the case of a permanent change. Holmes concluded with an admonishment in the vein of judicial restraint:

Dissent

Justice Joseph McKenna wrote a sharply worded dissent. The conditions imposed by the statute, McKenna said, were "contrary to every conception of leases that the world has ever entertained, and of the reciprocal rights and obligations of lessor and lessee." The constitutional prohibitions on denial of due process and impairment of the obligation of contracts were "so direct and definite as to need no reinforcing words", and the only question was whether the statute fell within the purview of these limitations. McKenna dismissed the claim of wartime necessity, stating that "the country has had other wars with resulting embarrassments, yet they did not induce the relaxation of constitutional requirements nor the exercise of arbitrary power." He warned that the Court's decision might presage a slippery slope of government mandates in other areas deemed necessary for the public improvement:

In light of this danger, legislative judgement should not be accorded determinative weight: "It is to be remembered that the legality of power must be estimated not by what it will do, but by what it can do." McKenna characterized the statute as an example of socialism:

Significance

In 1924, the rental property statute upheld in the case reached the Court for a second review. This time, despite the language being the same, the statute was struck down in a unanimous decision. In Chastleton Corp v. Sinclair, the Court held that the emergency necessitating the measure had passed, and that that which "justified interference with ordinarily existing property rights as of 1919 had come to an end by 1922." However, from the New Deal it became clear that all forms of rent regulation were constitutional.