January 7, 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 some of the suggested announcements for
amendments to Jersey City’s rent control and housing laws. The real
underlying problem in Jersey City is “gentrification” and local
government’s
failure to utilize the real estate tax revenue growth that accompanies
gentrification to provide affordable housing for long-time residents.
Gentrification
has been
Hudson County’s unspoken success story for more than 150 years --
originally
driven by immigration from around the world, and now by many new
residents arriving
from around the country. Today’s
young
professionals, some being driven out of New York City by its
short-sighted real
estate policies, often earn 6-figure incomes as Finance and IT
professionals
and can afford to pay market rents or purchase a refurbished
condominium. In
both cases, the City can realize higher
property values and increased tax collection, and those higher taxes
can
provide housing programs for those longtime residents that need
assistance.
The Liberty
Board of Realtors
studied the impact on property taxes from condominium conversions of 2,
3 and
4-units’ multifamily buildings for the last few years, finding the
amount of
the total real estate taxes paid to Jersey City increased each year for
these
conversions and in 2019 by more than $2 million.
Prohibiting the conversion of these
buildings
would be denial of supply and demand, which shows that 2-4 family units
are not
as desirable to today’s market as luxury condominiums and rentals would
cause a
financial hardship for the present property owners and for the city. Among the many negative
financial
consequences of prohibiting the conversion of these buildings would be
increased tax appeals and reduced retirement assets for longtime
residents.
This era is
the opportunity
for the City to use its popularity to capture the increased revenues
and
allocate them specifically for the creation of affordable housing. The time is now – these
transformational
markets do not last forever, and the relocation of longtime residents
is fast increasing. Set-asides
for affordable housing is not the
answer as many longtime residents do not qualify under the
affordability
requirements and do not have the financial resources to rent at current
market
prices.
Any new
housing regulations
must include a discussion about how they affect the people we should
care the
most about – the people who have built the City and worked for the
betterment
of Jersey City during the city’s difficult period.
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
110A
Meadowlands Parkway, Suite 103 •
Secaucus, New Jersey 07094 • 201-867-4415
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