In the interest of presenting multiple opinions on the hot topic of rent control and Public Question #2 I present the position of Ron Simoncini of the Mile Square Tapayers Association who advocates for vacancy decontrol for building with 1-4 units and a yes vote On Hoboken Question number 2. These are the opinions of Ron and the MSFT and not necessarily the Hoboken Journal. Here is Ron's note......
Mayor and Councilmen and Councilwomen:
A YES VOTE ON QUESTION 2 IS RIGHT FOR HOBOKEN
As Hoboken’s elected officials, you have heard a lot about the politics of the rent regulation system in Hoboken, but I am concerned that many of you may not have had the time to sit and reflect on the policy issues related to the upcoming election on November 6th.
Last year most of you encourage your constituents to vote to reform rent control, and I would ask that those of you who have not made a recommendation do the same this year – Vote YES on Question 2. Some of you already have made comments about Question 2, and you still have time to reconsider your position. To that end, I respectfully submit MSTA’s full position on Question 2.
BACKGROUND
· in September of 2009 you started hearings in rent control in Hoboken as a result of phantom violations of the rent leveling ordinance. You held 6 meetings
· in January of 2011 you introduced amendments to the ordinance meant to cure the problems created by various applications of the rent leveling ordinance by rent leveling board administrators that had been called by a judge unconstitutional as applied
· in March 2011 you passed those amendments unanimously
· in June 2011, after three bites at the apple to certify enough signatures, a group of tenant advocates successfully placed a public question on the ballot to reverse it
· November 2011 your law was upheld in a vote that turned out 68% in favor and you expressed an interest in continuing to reform rent control.
Your amendments allowed landlords to over come the fact that forms they might have filed were not accepted by the rent leveling office by allowing them to provide alternative proofs that vacancies had occurred, entitling the landlord to an increase of legal rent. However, continued misadministration by the rent leveling office and stilted policies at the rent leveling board, which is led by self-described tenant advocates, have undermined your will in passing Z-88.
Property owners, and property itself, have an important voice in the future of Hoboken. The political manipulations related to these interests has spurred a veritable movement in Hoboken that has attracted massive support, including from the 12,000 condominium owners. The Hoboken Housing Improvement Initiative (H2I2) balances the interests of the City, property owners and tenants, and deserves your support. Attached are the law itself, specifically protecting existing tenants; and our basic position paper.
However, during the campaign unfortunate mischaracterizations about threats from the law have been appearing on illegal campaign posters and illegally distributed materials. To address these claims specifically, I submit, H2I2:
1) Expressly protects existing tenants with H2I2.
It is fair to protect every existing rent control resident in Hoboken the same as they were the day they moved in. That is completely fair because a deal is a deal. But moreover, it is necessary to do so, as we have seen that politics explodes into regulatory environments, and we do not want to expose tenants, who are our customers, to the rampant misadministration of the law that we have seen under the tenant-led rent-leveling regime. Thus, the claim that rent control is ending for tenants is oxymoronic and should not be regarded by you as credible – more than 6600 units will be permanently under rent control when H2I2 passes. In terms of regulatory severity, even after the passage of H2I2 Hoboken will be among the 25 most restrictive ordinances in New Jersey.
2) Provides property tax reform, reducing the burden on 12,000 households in single-family and condominium properties.
Your tax assessor affirmed that rent controlled apartments pay reduced property taxes that will be increased by rent control reform. When units are improved and/or generate more revenue, they are reassessed and pay more. Currently, single-family and condominium owners subsidize rents in the form of compensating for the undervaluing of rent control properties. Thus, a condo unit that is governed by rent control may pay $20,000 per year in property taxes, but if its owner attempts to rent it out he finds that it remains a rent control property with a co-called legal rent of $500 and in addition he may pay maintenance and upkeep of $600 per month. It’s unfair. Patently unfair.
3) Provides equitable status for homeowners and condominium owners while reducing the cost of government.
It is also fair to the single-family homeowner and the condominium owner to be treated as they are in every other rent control community in the country: as a property owner not subject to rent control. It is fair to say to the small family property owner of 2-4 units that they are free from undue regulation that inhibits their ability to manage their family’s primary asset. Under intense pressure to convert these properties to condominium – the city has already last 23% of them and more than 12,000 from the rent regulated category since 1983 – releasing them from rent control surely increases that chances that affordable rental housing will remain in Hoboken. And it is reasonable to remove these properties, which are troublesome to regulate, from the authority of the rent leveling office, which has shown no capacity to adequately administer
4) Balances rent control protection for tenants while encouraging improvements to the housing stock that increase jobs.
It is fair to the professional real estate owner to improve his property and benefit from its value – and fair to every existing tenant to also benefit from those improvements. Construction related to upgrades to apartments will created needed jobs in Hoboken, adding to economic activity throughout the City.
5) No threat to affordability.
In a recent survey of 60 new tenants in rent control properties, 58 were from outside of Hoboken and the other two moved from market rate apartments to rent control apartments. The average income of these 60 households was $74,000. None of Hoboken’s public housing or senior housing is impacted by H2I2, and with the nature of Hoboken’s incoming tenancy, it cannot be said that rent subsidies are even required. Exactly who are property owners being asked to subsidize through an unfair tax burden and through devaluation of their properties? People who do not even live here now?
6) Maintains protections against harassment and eviction.
We hear a lot about the prospect of tenants being harassed and evicted from their homes as a result of the new ordinance. There are layers and layers of reasons why this is not a legitimate concern, but it is certainly true that some people are sincerely afraid. However, eviction laws in New Jersey are the toughest in the country and they remain exactly as they are under H2I2, including in1-3 unit owner occupied properties. Every tenant has the right to a perpetual tenancy unless they are using the apartment illegally or they are woefully behind on their rent.
In addition to eviction and harassment laws, which provide punishments sure to deter violations, tenants are protected by habitability conditions are enforced by the Hoboken Buildings Department. If anyone is concerned about a lack of attention to the conditions of an apartment, then they should call the building department for an inspection. The department has the right to punish landlords and enforce the upkeep of every apartment.
During the Z-88 referendum brought by the tenants, we heard the primary problem with reforming rent control is it leads to harassment and eviction. But no such wave of harassment or eviction occurred under Z-88 and though they are repeating their claim about H2I2, it does not stand to reason that it is legitimate. There is NO case of a landlord accused of harassment to create a vacancy in Hoboken since the rent leveling law was enacted in 1983. Surely there has financial motivation, but the scrutiny under which landlords operate and the prospective penalties are adequate protection.
The most incredible argument I heard against H2I2 from tenants, who often complain about the conditions of aging buildings, is not that improvements to vacancy decontrolled units will go unperformed, but that landlords in Bayonne, which decontrolled its rental housing in 2012, are using improvements to harass tenants. Everyone who has lived through an apartment being repainted knows the improvement takes a little while and is inconvenient, but when it's over you enjoy your living space more.
Can a group that squeezed more than $10 million in settlements from landlords as a result of phony over-charged claims -- enriching an unscrupulous attorney and providing a windfall for hundreds of tenants -- really be serious that they would fail to protect tenants from being harassed or illegally evicted?
We need to assure tenants that the protections already in place will continue to provide the same legal comfort they always have and hope that those few who have sincere fears will see they are unfounded. But in reality, those tenants who mistrust landlords and are bent on contentiousness never have to accept that landlords will do the right thing, they just have to accept that the regulatory and policing bodies already in place and already protecting them will continue to do so.
SUMMARY
Laws are about policy and not psychology desert the interests of the people who pay the bulk of property taxes in the town so that new residents moving in can get a discount and the existing tenants can take pleasure in harming the people who own the property and the City in which they live.
You know intellectually that the Yes Vote is fair. Politically it is perfectly defensible. I think you all have the courage and the will and the impetus to get behind it and do what is right. Advocate for Yes and reform rent control in a sustainable and equitable way while we have the chance.
H2I2 BASIC POSITION
While protecting every existing tenant identically to their protections when they signed their lease, Hoboken’s current rent leveling ordinance should be reformed to address inequities for property owners who are deprived of the value of their properties and prohibited from improving them. The Hoboken Housing Improvement Initiative will follow the example of most municipalities in New Jersey by exempting vacated units in condominiums and structures with 1-4 apartments from the rent leveling ordinance and allowing for rents on vacant units in buildings of greater than 4 apartments to be negotiated to the mutual satisfaction of tenants and owners.
There is abundant support for modernizing Hoboken’s rent leveling ordinance, given that:
a) That the New Jersey Department of Community Affairs has set a standard exempting from rent control small properties and that as a result most New Jersey towns exempt buildings with 1-4 units from rent control;
b) New Jersey tenants are afforded the most stringent anti-harassment, anti-eviction and building conditions legislation in the country, providing ample protection of their rights to occupancy of their apartments.
c) That contemporary rent control ordinances in similar communities have evolved to reflect the current fiscal, housing and business environments;
d) That the proven effect of rent control laws is to transfer property tax burdens from multi-family to single-family home owners but not other commercial property owners;
e) That affordable housing is a worthy social objective, but that rent control is proven to be ineffective at creating or maintaining affordable housing, and that its rewards do not reach the intended beneficiaries;
f) That the intended beneficiaries of the rent leveling ordinance may be protected based on the tenure of their residency; but that new residents who have not earned the status should not be granted;
g) That the health of the housing stock is threatened by limiting the income of properties to a point where their upkeep is not practical for the owner;
h) That current annual increases alone do not permit energy or insurance pass-throughs, resulting in an effective property taking and a multi-family property tax appeal spiral;
i) That restricting rents can lead to condominium conversion and an effective reduction in affordable housing;
j) That the administration of rent leveling ordinances should not be unduly burdensome and expensive to the municipality or the property owners;
k) That violators of the rent leveling ordinance should be subject to penalty of under the law.
As expected, a Superior Court judge affirmed the wording of the question as it appeared on the petitions to also appear on the ballot because it is a critical function of the amendment that there are no changes to existing protections. As we have seen from the rent leveling office’s performance in Hoboken, any amount of political mischief is possible in the administration of the rent leveling ordinance. The wording of the question reflects our desire that existing tenants remain as they are until they voluntarily vacate their units. A deal is a deal.
And finally, the biggest concern we see voiced by tenant advocates is that “subtle” harassment will occur in order that existing tenants vacate their units so owners can achieve higher rents. And yet the Hoboken Fair Housing website acknowledges that there is no change in eviction status as a result of the amendment. They are asking the voters to accept that all of the other benefits of the amendment should be eschewed in favor of tenants not being worried that anti-eviction law, anti-harassment law, habitability standards laws and the protections afforded by their own elected officials will fail as a result of an apartment owner being able to raise rents marginally more on a vacancy. There is no evidence of such occurances in other New Jersey municipalities, despite that decontrol is unregulated in more than 540 municipalities in New Jersey.
Hoboken Housing Improvement Initiative Ordinance Amendment
WHEREAS: the residents of the City of Hoboken will benefit from the continuation of rent control that protects tenants from unreasonable annual rental increases; and
WHEREAS: it is important to provide incentive to property owners within the City of Hoboken to maintain and improve their property so that stable property values may be fostered; and
WHEREAS: the adoption of this amendment to the City of Hoboken’s Rent Control Ordinance will protect the interests of both tenants and landlords;
BE IT ADOPTED that Chapter 155 of the Ordinances of the City of Hoboken are amended:
1) Upon the voluntary, uncoerced vacation or court ordered eviction of any tenant in occupancy in a condominium unit, or in a building containing four or less rental units, such condominium unit, or unit within a four or less rental unit structure, shall be permanently exempt from further application of the Hoboken Rent Leveling Ordinance.
2) a. Vacancy Decontrol. Upon the voluntary, uncoerced vacation or court ordered eviction of any other tenant for which rent increases are controlled by the terms of the City of Hoboken’s Rent Leveling Ordinance a landlord may negotiate a rental with the proposed new tenant at a mutually agreeable level between the landlord and the proposed tenant.
b. The landlord must file with the Rent Leveling Office, and provide a copy to the tenant in occupancy, if any, a "Vacancy Decontrol Certification" within fifteen (15) days after entering into a lease agreement and accepting a deposit from a new tenant, which shall include the following information:
1. Property address;
2. Apartment number;
3. Vacating tenant's monthly base rent;
4. New tenant's monthly rent;
5. Name of landlord;
6. Address of landlord;
7. Telephone number of landlord;
8. A statement of the owner or manager certifying that the vacancy was uncoerced or as a result of court ordered eviction.
c. Vacancy Decontrol Certifications and the statement provided to any tenant then in occupancy, shall be deemed approved by the Rent Leveling Office unless a written objection is filed by the tenant with the Rent Leveling Office and served upon the landlord, within ten (10) days of the landlord filing a complete certification. In the event an objection is filed, a hearing shall be conducted by the Rent Leveling Board within thirty days. At such hearing the burden shall be on the person filing the objection to establish that the landlord has not complied with the provisions of Section 2(b) herein.
d. Once a unit has been rented to a new tenant, it shall be subject to the remaining provisions of the chapter and any future rental increases for the duration of the tenants’ occupancy are limited to those increases permitted under this chapter.
e. Notwithstanding the provisions of the ordinance that require the filing of an annual registration statement, the filing of a Vacancy Decontrol Certification at the beginning of a lease term shall be deemed sufficient registration of the rental amounts for the given lease term.
f. Anti-Harassment Provision. It shall be unlawful for a landlord, or his agents, to willfully do or commit or cause to be done or committed any of the following: any harassment, intimidation or other similar action to a tenant with the intent to have a tenant vacate the rental unit; any reduction by the landlord in services which causes the tenant to vacate the premises; and any vacation of the premises which is coerced; provided, however, that this provision shall not limit a landlord, or his agents, from any act specifically authorized under the laws of the State of New Jersey.
g. Violation Anti-Harassment Provision. A willful violation of this subsection shall subject the landlord to: (i) on the first offense, loss of privilege to apply for vacancy decontrol at the subject property for a period of not less than one (1) year; (ii) on the second offense, loss of privilege to apply for vacancy decontrol at the subject property for a period of not less than two (2) years; (iii) upon a finding of any further offenses, loss of privilege to apply for vacancy decontrol at the subject property for a period of five (5) years. The complaint for violation of this provision shall be brought in the Municipal Court for the City of Hoboken.
(Ord. No. _____) ◦
