JERSEY CITY, NJ - While New Jersey state officials have continued to grapple with how to support tenants possibly having difficulty paying their rent during the COVID-19 crisis, Jersey City is wrestling with potential changes to its rent control ordinance that could dramatically reshape the real estate market.
Changes to an ordinance proposed earlier this year would take into account the state of emergency and restrict landlords from taking specific actions against tenants up to 30 days after any emergency ends.
Since the beginning of the year, the city council has been debating a 43-page draft ordinance. Behind the scenes, council members have struggled to come up with a plan that would strike a balance between not imposing heavy hardships on landlords, while at the same time considering the needs of renters.
By offering his own changes earlier this week Councilman James Solomon has attempted to help bridge the gap between the two sides of any rental agreement.
While initial plans to expand rent control to one and two-family homes have been scrapped, the ordinance the council will review this week would continue some of the same exemptions as the original rent control laws. Rental properties exempt from rent control would include dwellings with four or less housing spaces, low rent public housing developments, licensed hotels or motels, commercial and industrial space, and newly constructed dwellings with 25 or more dwelling units located within a redevelopment area.
Current regulations only apply to buildings constructed before 1987 a feature that would be eliminated in the new proposal that calls for any building with more than 50 units to be covered – regardless of when they were constructed.
Ron Simoncini, the executive director of the Jersey City Property Owners Association which represents 8,000 property owners in Jersey City, said he supports many of the proposed regulations, but added that there has to be consideration to landlords who are also struggling to meet increasing expenses.
The proposed law would create sweeping changes that could have unintended negative consequences, he warned. “I respect Councilman (James) Solomon even if we disagree on some issues,” Simoncini said.
Solomon is seen as the force behind the changes to rent control in the city that has been rated at the fifth most expensive city for renters and where 70 percent or more are leased properties.
“We support the city, but we believe the new regulations must strike the right balance,” Simoncini said. “There are a lot of things we support in the new regulations, things we were asking for. We like the idea of reporting disclosures because it will allow people to know what buildings are under rent control – which in some cases now, people are not aware of us and leases did not show.”
But he said there are other issues he said need to be worked out, such as how much the owner gets to increase rent as a result of a vacancy, and how landlords may seek hardship increases when they face extraordinary issues.
Landlords currently can increase rents $1.35 for every $100 of improvements made when an apartment is vacated; $1.55 per $100 if the improvements exceed $5,000. The new law would restrict the increase to $1.15 per $100 for all capital improvements.
Simoncini said this would discourage landlords from making any improvements – an issue that remains one of the major stumbling blocks. “A lot of testimony before the rent control committee has not been reflected in the draft ordinance,” he said.
Solomon said that the proposed changes would strengthen tenant’s awareness and protect them against rent increases while also giving tenants increased rights during change of ownership and buyouts of property and that the new ordinance would allow the city to have better oversight – addressing issues that have largely gone unregulated in the past.
For instance, the new regulations would require landlords to register with the city. While this has been the case in the past, many did not and the city did not pursue them. Under the new ordinance, the city would step up enforcement, and would make certain that landlords comply with reporting regulations.
According to language included in the ordinance a landlord would be required to give each tenant relevant information regarding the rental agreement and the property including the name and address of the landlord and his or her agent; the name, address and telephone number of the superintendent; a twenty-four-hour emergency telephone number for the landlord or his or her agent; a description of the housing space rented; the related services and equipment involved, including use of basement, garage, clothesline, washing equipment, utilities, heat, hot water, garbage removal, repairs, and maintenance; the base rental as of the date of the inception of the tenancy; the rent of the prior tenant; and notification of the existence of the rent registration law,” according to the proposed ordinance.
While Simoncini supports these regulations, he said he is concerned that some aspects of the proposed new ordinance could hurt the city as much as help.
“Market constraint hurts everybody; enforcement helps everybody,” Simoncini said. “There are legitimate concerns on both sides. Residents should be protected, but these regulations shouldn’t choke us to death.”
Praising Solomon for his work to bring attention to rent control, while noting that they don’t agree on everything, Simoncini said that they “both want to make Jersey City a better place to live.”
With the current proposal by Solomon allowing for rent increases of up to four percent at the expiration of a lease that lasted at least 12 months, and a restriction against increasing rent more than one year, Simoncini concluded that “good landlords should be rewarded,” and once again shared his desire to work with the local legislator on the issue.
“We want to partner with the city and to make sure there is a real and thorough examination. It is important to measure the market impact when tinkering with rent control.”
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