NEW YORK, NY June 03, 2008 —The state's highest court ruled today that a family can convert a rent-stabilized building into a private house.

The Court of Appeals said state law does not set a limit on the number of rent-stabilized apartments they can take over for their own personal use.

Alistair and Catherine Economakis bought the six-story East Village building in 2003 for investment purposes. They later decided to convert its 15 apartments into a large single family home for them and their two children.

Housing advocates say the case sets a dangerous precedent by letting wealthy families take rent-regulated housing stock out of circulation forever.

The lawyer for the owners, Jeffrey Turkel, said the public policy implications were beyond the scope of the case.

TURKEL: The reason why the Court of Appeals said that is because that's what the legislature said. The legislature said the owner can attempt to recover one or more apartments and the Court of Appeals said that one or more means just that one or more.

REPORTER: The owners still have to prove in housing court that they are going to live in the building for at least three years.