Rent Control Changes Up For Vote By Hoboken Council Wednesday

HOBOKEN, NJ — Rents in Hoboken are among the highest in the nation, but rent control laws in certain buildings keep increases from spiking suddenly, while allowing landlords to pass along surcharges.

Attempts to revise the 50-year-old Rent Control Ordinance have met resistance in the past, largely from tenant advocates who don't want landlords to have an incentive to remove longtime tenants. But some changes have passed over the years.

At its meeting this coming Wednesday, the nine-member Hoboken City Council will consider a list of new changes to the 1973 ordinance.

It was just last month that the council voted to contract with lawyer Barry Sarkisian to consider adjusting rent control.

The ordinance up for a vote this Wednesday can be found here. It will need two votes at a subsequent meeting to pass.

Recently, rents have risen so high that a Jersey City-based group has rallied for a "Right To Counsel" law that would give low-income tenants a free attorney if facing eviction. READ MORE: Should Tenants Get Free Legal Help To Fight Eviction?

People interested in attending Wednesday's meeting can watch here or head to City Hall, 94 Newark Street.

Are The Changes Good Or Bad?

So far, people on opposite sides of the controversy seem unhappy with the changes.

One tenant group believes the changes are a mixed bag.

The Hoboken Fair Housing Association posted a response on Patch to the changes.

The HFHA said the city's rent control board stopped meeting since this past November. Last year, two longtime members of the board were not reappointed.

The HFHA says it suspects a taxpayers'/property owners' group consulted the city on some of the changes.

However, the taxpayers' group in question, the Mile Square Taxpayers Association, doesn't seem all that happy with the proposal either.

"I would say that, with the exception of last year’s proposed amendments ,this is the most significant overt act of hostility to property owners I have ever seen in Hoboken," said Executive Director Ron Simoncini in a statement Tuesday.

Statements from both Simoncini's group and the HFHA are posted below.

City spokesperson Marilyn Baer said Tuesday, "The proposed amendments seek to clarify rent control regulations that have been left ambiguous and unclear. Hoboken will continue to have strong rent control laws in order to protect renters and keep the critical regulations in place."

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Comments From The HFHA

Hoboken Fair Housing Association (HFHA) releases statement on proposed amendments to Hoboken’s Rent Control Laws:

An ordinance introducing comprehensive changes to Hoboken’s rent protections is up for 1st reading on Wednesday’s city council agenda. The proposed legislation is intended to settle an interpretation disagreement between the rent leveling officer and head of housing, and the rent leveling and stabilization board. The mayor has, literally, shut down administration of our rent control laws and all rent board meetings (since October 2022) until passage of the amended law. All decisions or rulings on legal rents, capital improvement surcharges, hardship increases, requests for rent reductions or appeals to the rent board have ceased.

The proposed changes are fairly comprehensive and cannot be characterized as ‘fair to both tenants and landlords’ which is a frequent talking point that historically accompanies proposed changes to the ordinance regardless of whether it is a factually accurate statement.

Hoboken’s rent control laws are decidedly nuanced, and our local rent control history is rife with a
tangled web of fires, displacements, referendums, court challenges, accusations, and contentious ballot questions.

Over the 50 years that Hoboken has had rent control in place, it has gone from a centerpiece on the platform of aspiring local political candidates to a topic that candidates and elected officials do their best to avoid, ignore, and misconstrue.

In general, changes being proposed on Wednesday make the following amendments to the ordinance:
- Folds surcharges into the rent. Tax, sewer and water surcharges are now paid on top of, and in
addition to the rent. Folding surcharges into the rent will raise the yearly increases, which are a
percentage added to the existing rent. In the past, the increase was calculated as a percentage
of the rent amount without surcharges. If the proposed changes go forward, the yearly
percentage increase will be calculated using to the rent + any surcharges.
- Clarifies that new buildings with 4 or more units are exempt from the ordinance for 30 years
only if they 1) file the required paperwork before the building receives a certificate of occupancy
and 2) notify potential renters at the time they take occupancy that the property is not rent
controlled.
- Hoboken’s subsidized buildings such as Marine View and Clock Towers currently have
affordability controls from agreements that will soon expire. Our currents laws mandate a
transition to rent control and the proposed law does not, and would leave the tenants without
rent control.
- Codifies (legalizes) all rent updates done by the rent leveling officer to date. including hundreds
of calculations done in contradiction to the plain language of the existing Code and which
denied all appellants (in these cases a renter) their right to challenge the rent calculation within
20-days of the decision.
- Continues to permit landlords to submit alternative proofs of rent increases and vacancy
decontrols in perpetuity thereby incentivizing lack of compliance with the ordinance’s filing
requirements.
- Reduces the cap on the maximum yearly increase from 7.5 percent to 5 percent or the consumer price index (CPI) whichever is the lesser number

- Requires the rent leveling and stabilization board to get the permission of the administration in
advance of promulgating any rules
- Increases the annual filing and application fee for yearly registrations, capital improvements,
legal rent calculations and appeals to the board
-Removes the penalty for not filing a registration form and substitutes a requirement to pay a double registration fee, incentivizing landlord’s non-compliance to file

No outreach was done to Hoboken renters, rent control activists or the rent leveling board members in connection with crafting the proposal. Staff in the Housing Division did consult with investor/developer real estate lobbyist representatives and sources have stated that the administration, including the mayor and his chief of staff, met with and/or spoke with a representative from the Mile Square Taxpayers Association (MSTA), an organization that lobbies for the abolishment of rent control in Hoboken.

At a recent city council meeting, the administration proposed, and the city council approved, a contract to engage retired Judge Sarkisian to review Hoboken’s rent control laws. Despite members of the public requesting an answer to what the directive of the contract was, no answers were provided.

However, based on these outcomes, it is clear that the contractor was directed to modify the ordinance in order to codify any and all administration, practices and processes that contradicted the existing language of the Code and to codify administration, practices and processes that ensure, to the greatest extent possible, that the rent control files list legal rents so exorbitant that it would be impossible to secure tenants willing to pay those amounts thereby nullifying key consumer and community protections that ironically remain in the ordinance.

Comments From The Mile Square Taxpayers' Association:

Below is a statement from Ron Simoncini – Mile Square Taxpayers Association [MSTA] Executive Director - regarding the Council’s proposed amendments and reaction to the HFHA.

For the last 10 months, MSTA has been sharing with the Council and the Administration its perspectives on rent control and necessary amendments to the rent control ordinance, many related to the rogue behavior at the rent control board level and the lack of resources and lack of record keeping integrity at the Rent Control Office, over a judge declared Hoboken’s rent control ordinance unconstitutional as applied.

Among several significant problems with the proposed amendments to the ordinance, the City is increasing the fees it is receiving by more than 300% but it is reducing the amount a property owner can increase rents so that it is less than inflation.

And the City is suggesting that if landlords have been deferring rent increases to be sensitive to the current tenant’s financial condition, that their generosity is now going to be punished when they set rents for a future tenant whose incomes usually exceed $100,000 per year? The City has ruled for a generation that these increases could be deferred and property owners have relied on that standard, but in a window into just how arbitrary the City can be, it has not even proposed to grandfather rent registrations that it has accepted as legal.

And if I were a council member and I saw that future adjustment to the rent control law eliminate council involvement, I think I would be a little concerned about where legislative authority went. As MSTA has been asserting, this is the perfect moment to look at the true impacts of rent control and change policies to the benefit of the entire market. Instead, this proposal clearly is an attempt to risk-manage the litigation environment as a result of the horrid performance of the rent control board as well as gesture toward some of the elements in a previous amendment proposal that failed to gain council support again and again. That should be as unacceptable to the public as it is to MSTA. Think about the number of things that this proposal does not solve for:

1. The base year changing to 1985 solves almost none of the problems we have identified that resulted in the hiring of Judge Sarkisian, whose work, we presume, resulted in the amendments related to Board operation (some of which are good). It does not ease administration of the Ordinance at all and it does not create an impetus for non-registrants to become part of the rent control regime. In order to be meaningful, the base year needs to include a roll-up of surcharges and be changed to a date AFTER the original Z-88 was enacted – and to the benefit of tenants, it should be as close to the pandemic as possible, which is why we recommended 2019.
2. The idea that rent increases are anything less than inflation is antithetical to balancing the interests of tenants and property owners. Not one person in Hoboken ever income-qualified for the subsidy that rent control represents – the ordinance blankets the whole market without considering the financial strength of the property owner versus the tenant and their relative capacity to bear increased costs. Only an annual increase that matches to cost increases does that. When you set increases lower than inflation, the condo and single family homeowners bear greater relative tax increases as a result.
3. Nothing in this proposal creates the resources or impetus for the City to actually address the real affordable housing needs it faces.

I would say that, with the exception of last year’s proposed amendments, this is the most significant overt act of hostility to property owners I have ever seen in Hoboken. The fact that the Administration did not in any sense enter a dialogue with the property owners about the nature of these changes is a personal insult to ever single property owner in this town – single family, condo, multi-family and commercial.