Hoboken Home Renters Gain Extra Protection From ‘Tax Surcharges’

HOBOKEN, NJ — People who rent homes in Hoboken will get some extra layers of protection when it comes to paying “tax surcharges” to their landlords thanks to a city ordinance signed into law Monday.

According to a statement from city officials, as a result of the amendment, owners of rental properties subject to rent control are only permitted to pass along a tax surcharge based on the date they acquired the property as opposed to 1988, the date previously specified by the rent control ordinance.

Officials stated:

"In recent years, property owners were allowed to pass on large tax surcharges on top of rent to tenants based on all property tax increases dating back to 1988. Property owners who acquired rental properties after 1988 were still permitted to apply the tax surcharge on property tax increases dating to 1988, even when they did not own the property or absorb those tax increases prior to their ownership."

• See related article: Hoboken Landlords Abusing 'Loophole' To Raise Rents, Mayor Says

Now, thanks to the new law, the tax surcharge can only be applied back to the date of when the property owner acquired the property, resulting in a smaller calculated amount, or tax surcharge, that can be applied to tenants, officials stated.

Additionally, the amendment states that landlords must inform and explain the tax surcharge in writing to tenants including the actual tax surcharge, the base rent, the tax surcharge, total and apportioned, and the effective date. The tax surcharge must be imposed at the beginning of a lease term or renewal, and is not permitted to be assessed mid lease. Landlords who already have filed for a tax surcharge are grandfathered and can transfer their property with the tax surcharge intact so long as they annually refile with the city, officials said.

The Hoboken City Council previously passed the amendment by a 8-0-1 margin.

"I was pleased to see the broad council support for this change in how municipal tax increases are passed along to residential tenants in our city,” Councilman Jim Doyle said. “This is fair change that will help tenants, and we need to continue with reforms like this to help keep our community economically diverse for the benefit of all."

“I am happy to have been part of the working group for the rent control ordinance,” Councilwoman Vanessa Falco said. “This is one area that Mayor [Ravinder] Bhalla was committed to amend that will really assist residents. We will continue to find solutions in this area as this amendment is a work in progress.”

“We are committed to ensuring tenants are not burdened by large tax surcharges, and this new law will help ensure fairness and transparency for renters,” Bhalla said. “I appreciate the assistance of Councilman Doyle and Councilwoman Falco in leading this process through the council.”

Hoboken Councilwoman Tiffanie Fisher offered Patch the following statement on Wednesday about the new amendment:

"To avoid confusion, this law change does not affect current tax surcharges being passed through to tenants. I was proud to support this legislation to protect tenants. But as others have expressed, it is a change that we hope will not have unintended consequences of increasing displacement so we will need to keep a close watch."

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