Original Post 1/20/2011:
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| Gina DeNardo |
Community activist Gina DeNardo had this piece she submitted to me on rent control and her position on why the ordinance has not worked in her opinion. The Hoboken Journal editor is also a property owner and I do find certain aspects of the ordinance problematic in that it does not address the issue of condo conversions in a fair way, i.e. from a homeowners perspective. However, the positions advocated below are that of Gina alone. I welcome both sides of the debate on this important yet contentious issue. I do realize this is a sensitive topic that creates a lot of emotion in people so I just ask that if you choose to comment keep it issue based. Thanks. Below is the op-ed piece from Gina......
Rent Control - The Original Purpose
The original purpose of Rent Control was to prevent profiteering during the Vietnam War, when President Nixon instituted wage and price controls. Since the first Rent Control ordinance was enacted in Hoboken – in 1974, not much has changed, except how the ordinance has been interpreted and administered. Between 1981 and 1985, for example, rents were allowed to be increased by 25% on each tenant turnover (see attached ordinance from 1981) – whether the tenant was in the apartment for a month, a day, or a year. In 1985, the ordinance was amended to only allow a maximum increase of 25% on turnover only once in any 3 year period. And while there was a requirement to file a vacancy decontrol form once a tenant vacated, this requirement was flagrantly ignored by the Rent Control Administrator– instead, the Rent Office calculated “legal rents” based on tenant turnovers that were evident in actual rent registrations (vis-a-vis a new tenants name appearing on a subsequent ‘yearly’ registration.) What complicates this issue even further is that no actual “vacancy decontrol form template” existed for a landlord to fill out between 1981 and 1985, hence the records for those years are most certainly incomplete and inaccurate, and as recently as the early 2000’s, the Rent Control Administrator has refused to accept the mandated forms.
Up until 2007, the practice of “calculating legal rents” was essentially the same - the Rent Administrator referred back to the first “recorded” registration, in some cases 1981, but in other cases 1985 (when it first became mandatory for a landlord to file a rent registration, otherwise a penalty could ensue.) And in almost all cases, there were (and still are) gaping holes from when one registration was filed to the next filing. In any case, the “legal rent” was surmised by starting with the first rent filed, and adding 25% every time a registration reflected a new tenancy if it occurred within the three year window (in addition to the yearly CPI increase.)
Problems With Ordinance
When the City’s administration of the Ordinance, and in particular the process by which they were calculating rents, was challenged in 2007, they were legally forced to change the process that they had abided by for the proceeding 25 years – to the detriment of all landlords, small and large alike. This change has ultimately brought financial devastation to many small landlords, as now their “once legal rents” – the same rents that were “legal” prior to 2007, were now being challenged in courts of law – deeming them “illegal” – due to the judicial recognition that the process to calculate rents was flawed by virtue of the Administrators’ lack of adherence to the Ordinance. This is the crucial point: The person in charge of administering the law intentionally and to the financial detriment to those following his or her instructions, arbitrarily applied rules not consistent with the Ordinance. Today, the City requires that forms which never existed in the first place are available and in the building file in order for vacancy increases to be included in final calculations, and does not allow forms be filed retroactively. Did I mention it was standard practice for people to bring files “home for the weekend” – including attorneys that were “phishing” for information? Who knows what important forms were removed in the process…
This has encouraged some “ambulance chasing” attorneys and their clients to capitalize on this new found loophole, causing financial devastation to small landlords, some of which have lived here in Hoboken their whole lives, worked hard and saved enough to achieve the American dream of “home ownership” - only to have it taken away at the blink of an eye by a City and court system that not only finds them liable for “over charging” in the “new calculation world”, but also finds them liable for the rent overpayment that was collected and received by prior landlords. One could equate this to being charged for a crime that you did not commit. And speaking of crimes, murder does not have a statute of limitations, and neither does rent control in Hoboken. To add insult to injury, the current landlord may be charged with Consumer Fraud – imagine, now you committed “Fraud” because your once legal rent (under the pre-2007 administrative process) is now “illegal” – so even if you just purchased a building, you as a brand new landlord, are responsible for the “over payment” of an entire tenancy (even if this tenant had 10 prior landlords) and 3 times the damage plus the plaintiffs’ attorney fees (we know how they love to capitalize on a good loophole…). For what? Because of the arbitrary and inconsistent administration of an Ordinance that was created to protect, not destroy rights.
Conclusion
Rent control reduces the quality of available housing, deters investors and increases rents for tenants that are excluded from its protection and does not even achieve what it was intended to do: provide low cost housing for those that actually need it.
Below is the orginal ordinance as noticed in the paper:
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| The original Rent Control ordinance - Click to enlarge |
Below is Gina DeNardo in an interview on behalf of Mile Square Tax Payers Association:
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