February 12, 2020

City Council of Jersey City

280 Grove Street, Room 202

Jersey City, New Jersey 07302

Dear Council Members:

The Liberty Board of Realtors continues to be concerned with the City Council’s continued attempts to solve the problem of affordable housing for longtime residents in Jersey City.  The set asides for tax abated new construction housing is not the solution to solve the lack of affordable housing for the many of Jersey City’s residents that are being displaced daily, nor will the numerous amendments to the rent control ordinance create one apartment.   If anything, the proposals will do what rent control does best which is reducing the number of affordable apartments for those that are being displaced from the city they lived in for many years.

Almost 50 years ago, rent control arrived in New Jersey when there was more affordable housing than there is today.  All of these nitpicking regulations that oversee what property owners are allowed to earn on their investment has not solved the problem.  Instead, what it does is allow elected officials to brag how compassionate they are to those that need affordable housing with proposals that control the profit of property owners. 

For 30 years the affordable housing problem was actually solved in one Hudson County city.  Thousands of affordable apartments were created in Hoboken, but now many of those rent subsidies either have or continue to expire with no apparent solution to help those long-time residents of Hoboken.  Consequently, without the subsides, rents were increased, forcing longtime residents to move out of the only city they knew.  They will forever be displaced from the city they and their children were born in and will no longer be able to call Hoboken home.  However, Hoboken officials’ actions are very similar to Jersey City’s policies, which is to strengthen rent control laws.  Throughout the past, the solution has always been to try and fix rent control, but it never created one affordable apartment.  History proves rent control actually eliminates the  apartments that are affordable.   New development set asides are not the solution since the guidelines do not satisfy the needs of many that are being displaced. 

Because of this, one would think that our elected officials do not realize who is being affected the most.  For instance, one group that is impacted is young adults who grew up in Jersey City.  Their parents were born in Jersey City, too.  They graduate high school, go onto higher education or a trade school and soon want to leave the nest.   These young people are at the beginning of their careers and cannot afford the better things that Jersey City has to offer.   

Moreover, Jersey City is an urban community and in order for it to continue to improve, it needs to keep the various types of job skills offered by its residents.  Urban communities in a state with the type of mass transit we have in New Jersey do not tend to attract commuters for many of the job skills Jersey City needs to provide.  The mass transit system is not that affordable, and it was designed to transport people to Manhattan and that thinking continues today in Trenton.  For this reason, in order for Jersey City to reach its full potential, it needs to provide housing for the jobs that pay less than 6-figure annual incomes.   Housing needs for this income group are being ignored in many urban cities and Jersey City is no exception.
 

To properly address the displacement of longtime residents these are some facts that we know:

1. There are many rent controlled buildings where their registrations are missing or were never registered
2.  It appears there are rent controlled buildings charging more then allowed
3.  Many, if not all, of the tenants that are being overcharged are tenants with affordable incomes
4.  Many of those buildings charging greater than allowed, supplied the rent collected on their REVAL forms
5. If the overcharged rents are lowered many of those buildings will qualify for successful tax appeals
6. Successful tax appeals will increase taxes for all property owners
7. Successful tax appeals will increase rents for all tenants that are not making six figure salaries
8. When requiring set asides the development pays less taxes.  Taxes that could be used to provide affordable housing
9. Those square footage set asides may be needed for today but the tax relief continues for the future
10. After REVAL rent control apartment buildings taxes increased by 7%
11.  After REVAL apartment buildings built after 1990 are not rent controlled, their taxes increased by almost 50%      

For years, Jersey City and many urban cities continue to rely on set asides in new developments and rent control corrections to address the storage of affordable housing for their long-time residents.  The results have never lived up to expectations, in fact the displacement of longtime residents only increases.  You can only conclude these solutions have failed and it is time for our elected officials begin looking at solutions that have worked and improve on them.   This is the reason why I mentioned the Hoboken success that prevented thousands of longtime residents from being displaced from the city their parents were born in for more than 30 years.  One issue that I addressed as a resident in Hoboken in the 1970’s was that 30-40 years would arrive sooner than one would image.   For this reason, if you review their success of providing affordable housing, please remember providing housing for 30-40 years is a solution for today but creates the same problem in the future.          

The Liberty Board of REALTORS is recommending that the City Council spend their energy in creating policies that will create affordable housing instead of making the same mistakes elected officials have been making for more than 50 years.  Use the system the public understands.  Let the private sector grow with good oversite and tax the growth in assessment.  Use some of the growth in taxes to give tax relief to homeowners and some can be used to provide long term affordable housing only for those that need and deserve a subsidy.

The Liberty Board membership includes almost 1000 REALTOR families in Jersey City.  For that reason, we offer each of you the opportunity to have your comments on this issue forwarded to our membership.  They will be published in our next Membership Newsletter.   

If we can be of any assistance, please do not hesitate to contact my office.

 
Sincerely,

Joseph W. Hottendorf,

Executive Vice President

Cc: The Honorable Mayor Steven Fulop

Cc: Robert Byrne, City Clerk