September 26, 2019

CORRECTED

City Council of Jersey City

280 Grove Street, Room 202

Jersey City, New Jersey 07302

Dear Council Members:

The Liberty Board of Realtors® has recently been made aware of several news reports regarding the rent control committee hearings. These reports seem to push the idea that property owners are deserving of punishment and we are concerned the city council could be persuaded by these heartbreaking, but isolated events the news has chosen to focus on.

The city council must focus on the main problem in Jersey City, which is a problem that exists beyond your city and throughout our region, which is “the need of funding to create affordable housing for moderate income residents.” We agree, conditions of existing units need to be addressed and enforced, but no one is addressing the larger problem of how to create affordable housing.

We know from a long history of experience and simple economics that government controls on any investment will only create less of that product and should only be used as a short-term solution. But rent control will celebrate its Golden Anniversary in three years and during these almost 50 years, there is less affordable housing for moderate income resident in Jersey City, proving that rent control is not fixing the problem.

Jersey City is in the midst of a renaissance, with new investments arriving in the city. If we cannot address the problem of allocating the growing tax revenues into affordable housing now, it will never be done.  Now is when many new residents that are arriving can afford to pay higher rents and higher rents mean those buildings will pay higher taxes. Rent control was enacted in 1973 to protect tenants from unreasonable rent increases. Since 1973 new laws in New Jersey have placed the burden entirely on property owners to prove that any rent increase given not unconscionable and is reasonable.

 It is our understanding the rent control staff are comparing records with those of the revaluation company and advising property owners to lower rents, so the amounts conform with the city’s controls. We do not condone ignoring the laws in Jersey City, but since these properties were reassessed recently, the city should understand many of these properties may now or will soon qualify for a tax appeal and when their taxes decline the ones for small homeowners will increase. If the committee review the buildings the tax assessor classifies as 4C (apartment buildings), they will be note those built before 1988 had taxes increased an average of 7% after the revaluation. In New Jersey, state law exempts buildings constructed after 1988 from rent control. Those buildings built after 1988 had an average tax increase of more than 45% after the revaluation.

The committee should be focused on how to get these new arrivals in Jersey City that can afford to pay their fair share of the tax burden by paying market rents.  

Instead, the city council is about to pass an ordinance that would place properties in redevelopment areas under rent control, which will deliver subsidized rents to households that can afford to pay market rents.

Where is the attention to reducing the tax burden for small homeowners? Where is the attention to funding rents for tenants that truly need assistance?

As always if any councilperson needs any additional information this office is available to assist. 

Sincerely,

Joseph W. Hottendorf,

Executive Vice President

Cc: The Honorable Mayor Steven Fulop

Cc: Robert Byrne, City Clerk