Hoboken Threatens Corporate Landlord With $660K Fines Over Rent Increases

HOBOKEN, NJ — A luxury building in Hoboken that issued rent increases to tenants of sometimes more than 25 percent has failed to comply with a recent ruling telling them to follow the city's Rent Control Ordinance, the city said in a recent letter to the management.

The city could fine AvalonBay Communities as much as $660,000, they said.

In a Dec. 11 letter to AvalonBay in Iselin, attorneys representing the city of Hoboken said that the Avalon Hoboken building "is still operating as if it was exempt from the Rent Control Ordinance. Avalon charged rents higher than the legal rent calculations conducted by the Rent Regulation Officer." READ MORE: Tenants Win Ruling About Avalon Hoboken

The law allows the city to fine Avalon $3,000 per unit if they continue to operate as if they are exempt from local rent control, or ultimately, between $198,000 and $660,000, the city said.

On Thursday, Mayor Ravi Bhalla said, "The improper and unconscionable rent increases issued by AvalonBay to their tenants is unacceptable and outrageous, and actions unbecoming of a good corporate neighbor. Avalon is flagrantly ignoring the ruling by the Rent Control Board. ...We as a city will stand up to corporate greed that undermines the well-being of our community.”

What Does The Law Say?

In order to keep housing stabilized in Hoboken, the city passed a Rent Control Ordinance in 1972 — with several amendments since then — that limits rent increases for many buildings to the Cost of Living Adjustment (often 5 percent or less) and lets landlords apply to split up tax and water increases among tenants.

In addition, landlords can also get a vacancy decontrol of 25 percent every three years if a tenant moves out. However, since the increase is an incentive for landlords to push tenants out, the law says a landlord will not qualify for the increase if the tenant was pressured or intimidated to leave in some way.

While rent control in Hoboken often applies to units more than 30 years old, some newer buildings fall under the law as well — because their owners have not provided proof that their original builders applied for an exemption to rent control when they were constructed.

Avalon is among the luxury properties that could not prove it's exempt from local rent control, Hoboken officials have said. (See previous reporting on this issue as it relates to Rivington Hoboken and Portside Towers in Jersey City.)

Last year, a national investigation indicated that several groups of landlords were raising rents at the same time based on computer software rather than the market — giving tenants few alternatives if their rent spiked.

In New Jersey, even properties not subject to rent control are subject to state rulings saying rent increases must be kept to a "reasonable" increase. Prior case law has found that an increase over 25 percent may be too high, but it's been left to tenants to refuse to pay the increase and then, when taken to court, make their case to the judge.

New Jersey's strong eviction laws protect tenants from having to leave if they've paid the rent on time and stuck by the lease terms, and even if a lease expires, they can maintain their tenancy. The burden falls to landlords to go to court to try to prove there's a "just cause" for eviction.

In the recent case with Avalon, the city said that 66 tenants of the Avalon Hoboken building, on the west side of town, have filed for a Legal Rent Calculation from the city's Rent Leveling and Stabilization Office.

Rent control laws also allow tenants to someday sue for triple damages if they were paying a rent over what's legal.

'Test Case' Against Avalon Withdrawn

Meanwhile, the city has also helped three Avalon tenants file a lawsuit against the company based on their rent increases, a "test case" meant to determine citywide which types of rent increases could be unconscionable under state law. This would provide more of a yardstick for other tenants — rent controlled or not —facing increases.

One of the plaintiffs in the suit, a single mom with a child in the public schools, said Avalon tried to raise her rent over two years from $3,990 a month to $5,826, forcing her to decide to uproot her child, or scramble to pay nearly $24,000 more per year in rent.

However, a city spokesperson confirmed Friday that the suit has been withdrawn because the city's rent control ruling in October takes precedence.

That would mean the city may have to file another test case if it wants to determine a precedent for unconscionable rents, rather than leaving it to tenants to wait for a court date.

Packing Up

A current tenant of Avalon said that some neighbors have been intimidated enough by the possibility of the increases that they have left the building rather than fight.

"There are people who have moved out in the past year as a direct result of the increases," the tenant said Wednesday, "and have heard of people planning to leave due to the uncertainty. When you attend the Zoom calls with the tenant advocate that the city has hosted, people are often confused as to what they should do."

Hoboken has a tenant advocate whose job it is to assist tenants in understanding the law. Local non-profits like the Waterfront Project in Jersey City also provide legal aid to low-income people for help with tenancy issues, domestic violence, and more.

Below is the city's letter to AvalonBay:

Resources

Read Hoboken Patch's prior reporting on the Avalon rent issue here.

Related stories:

• READ MORE: Rent Ruling In Jersey City May Set Precedent In Hudson County
• READ MORE: Rivington Rent Hikes Reduced; Hoboken Says They're An 'Injustice'

Read the New Jersey laws about increases, eviction, and Truth in Renting here, here, and here.

Tenants in smaller buildings have been fighting battles, too. In the past, Cheryl Fallick of the Hoboken Fair Housing Association has pointed to a years-long legal battle that one Hoboken senior citizen, Jeff Trupiano, has been waging against his landlord.

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