October 15, 2019

City Council of Jersey City

280 Grove Street, Room 202

Jersey City, New Jersey 07302

Dear Council Members:

We took note that Mayor Stack and others spoke before your rent control committee.  This office wants to make sure the committee has additional understanding of the testimony as it relates to tenants’ rights and affordable housing.  

First, let me assure you, I personally have the highest regards for the Mayor.  He is no doubt the hardest working Mayor in Hudson County especially as it relates to constituent services.  He has been helping his neighbors with tenant rights since he was a teenager. He does it with a heavy heart and I always admired his energy and love for the residents of Union City.  Even though I have the highest regard for him, we have disagreed over the years on how to solve the problem of affordable rents for those that need assistance.   

Rent control is not the solution to affordable housing nor does it create affordable housing.   Since rent control was enacted in New Jersey almost 50 years ago, if you exclude those buildings built after 1990 prohibiting rent control on new buildings and those that receive some type of government subsidies,  there are less privately-owned housing units available for moderate income residents in every New Jersey city that has implemented rent control.   During the last 50 years, the only city, that I know of, who solved the problem of affordable housing in New Jersey for moderate income residents was Hoboken.    The shame is the government subsidies that began many years ago are expiring and the city is not doing enough to assist the longtime residents that are having their rents increased to market rents.  One would have to conclude; the city is more concerned with the new taxes the once subsidized housing will begin paying.

Please review attached report of facts, the City Council should consider before they make a decision.   Hopefully the City Councils main objective is to solve the problem for affordable housing for moderate income residents.   As always, this office is available to assist in any way it can.

Sincerely,

Joseph W. Hottendorf

Executive Vice President

Cc: The Honorable Mayor Steven Fulop

Cc: Robert Byrne, City Clerk

FACTS TO BE CONSIDERED

Evictions:  The Mayor mentioned that there are 18,000* evictions in Hudson County every year.   What he didn’t mention is many evictions are for nonpayment of rent or for sub-renting by the tenant without authority. Many of the evictions are heartbreaking stories, but what most people don’t realize is the amount of time the eviction takes and during this time the property owner is required to pay the expenses to maintain the services for the building including real estate taxes.  It would be negligent for me not to mention how quickly the city issues tax liens or their outrageous usury interest rates for property owners who do not pay their taxes in a timely matter.   

Overcharging rents:   In Jersey City, because of public reports, it appears that this has been a practice for some property owners to charge rents higher than the rent control law permitted.  We don’t condone ignoring the rent control law, but it appears many of these property owners were honest when reporting their rent rolls on the 2018 REVAL form.  What the city should be more concerned with, if they require the rents to be reduced, will those properties be eligible for a tax appeal?  Lower taxes from rent controlled buildings equals higher taxes for small homeowners!   What should not be done is to reduce the rent of the tenant that is mentioned in the rent-controlled report that is paying more than $5,000 each month and was overcharged.   Anyone willing to sign a lease for more than $5,000 does not need protection nor is there a shortage of apartments for tenants that can afford $5,000 apartments.  

Section 8:  The reason why we have a Section 8 program is because the federal government recognizes the need for rent subsidies, but it doesn’t do enough in urban cities for the housing needs of moderate-income residents.  We agree with your Director of Housing that the city made a mistake when it eliminated the ability of a property owner in receiving market rents with the difference in the increase being paid by the federal government.    It was an incentive for property owners to rent to Section 8 tenants.  However, we don’t agree that property owners are electing to choose new residents as a form of discrimination.  New tenants that meet qualification standards including acceptable credit ratings are attracted to Jersey City because of its renaissance.  

Renaissance:  It’s great for a city to enjoy a renaissance, but they always bring problems if the city does not use the increase in tax revenues to assist the long time low-and moderate-income residents.  If you do not permit property owners to charge market rents, the city cannot increase the assessment on rent controlled buildings and in turn increase tax receipts. Without the increase in tax revenues no new housing will be created for those in need.   If a city goes the route of tougher rent control regulations all you need to do is look at Hoboken when they went in that direction.  In 1983, I spoke before the city council and warned them not to increase the authority of rent control on the property owners.  I predicted then that within 30 years there may not be any rent control units in two and three family buildings.  I admit I was wrong! What I should have predicted was that in 40 years most rent controlled buildings would be converted to condominiums and almost all the two and three family buildings would be converted to condominiums or to one family homes.  Plus, there would be almost no rent controlled buildings left. 

Concern and Affordable Housing Solution:  Because of some public statements by elected officials this office is concerned that Jersey City is going in the same direction that Hoboken’s policy led them, with a policy that almost eliminates families who have lived in the city for more than one generation, displacing mostly low-and moderate-income residents.  The city should remember that r ent control was enacted in 1973 to protect tenants from unreasonable rent increases since then new laws in New Jersey place the burden entirely on property owners to prove any rent increase given is not unconscionable and is reasonable.   If the city is sincere in solving the unaffordable problem, they need to provide subsidies for those that society need to assist.    One such solution to generate revenue is the city allows the new high-income tenants pay for the subsidies by paying market rents.       

*Note: It should be noted the 18,000 evictions are not actually tenants being removed from their apartments but instead notices from the court to the tenant.