The City Council may take a final vote this Wednesday night on changes to Hoboken’s 38-year-old Rent Control Ordinance. The hearing is expected to draw heated comments from people for and against the amendments, which evolved after approximately 18 months of work by a council subcommittee.
Rent control has been a controversial issue in Hoboken over the last several decades, with landlords saying it prevents them from making a fair profit on their properties, and housing activists saying that any attempt to change the laws may encourage landlords to force existing tenants into the street. The current law limits annual rent increases to a few percent a year, but allows landlords to apply for larger increases based on certain criteria. Landlords can also pass along tax and water surcharges.
“Both sides seem to be unhappy, so we probably have something down the middle.” – Beth Mason
A major impetus for the proposed changes was the fact that tenants were finding out that they were – technically – overcharged for rents through the years, and being able to file lawsuits to gain thousands of dollars in back rent from landlords. Other lawsuits have successfully maintained that the landlords were not at fault because the city did not keep adequate rent records.
Recently, some Hoboken landlords were notified of a class action lawsuit by Brach Eichler LLC, a firm representing one landlord suing the city of Hoboken, the Hoboken Rent Leveling and Stabilization Board, and other involved parties.
The lawsuit charges that owners of multi-family properties regulated by the rent control ordinance have been victimized by the city’s enforcement of the rent control law “in a manner inconsistent with its express language” and in a manner landlords can comply with.
The suit asks the court for damages and to stop the rent calculation process as defined in the ordinance.
When the revised rent control ordinance was introduced on Feb. 16, the plaintiff’s lawyer, Charles X. Gormally, told the City Council amending the ordinance to the landlords’ satisfaction might solve some of the city’s legal problems.
One advocate for local property owners pointed out that one court has ruled that the city’s administration of the rent control law has been “arbitrary, capricious, and unreasonable” – yet successive city councils have failed to make changes.
Under the existing law, if landlords charge a rent higher then what is legally allowed, they must pay back the overcharge for all the years of the violation, as well as consumer fraud penalties, which often results in the payment tripling. However, some landlords say it’s impossible to tell if the rent is illegal because of missing and incomplete documents in the city’s rent leveling office.
One proposed change would limit payments for rent overcharges to two years, a time period Council President and Rent Control Subcommittee Chair Beth Mason said is a middle ground for tenants and landlords that was reached after months of subcommittee meetings.
Cathy Cardillo, a tenant advocate and attorney who represents the Citizens for the Retention of Affordable Housing in Hoboken (CRAHH), issued a letter to Mayor Dawn Zimmer and the council members on Feb. 16, the day of the first reading of the ordinance, criticizing the council for bowing to “monied interests.”
“Who benefits when you limit all excess, which means ‘illegal,’ rents paid to a cheating landlord, to only two years – can you reconcile yourself to that?,” Cardillo wrote in her letter. Cardillo added that she believes the proposed changes “will not only disserve a large portion of [their] constituency – it will actually harm them.”
Landlords, of course, disagree, believing it has taken far too long to make changes to the existing system.
When attorney Gormally spoke at the Feb. 16 council meeting, he thanked the council for having “the courage to act.” Gormally said previous councils didn’t change the law even after “one judge in Jersey City found the ordinance was unconstitutional as applied.”
A second proposed change would make it easier for landlords to apply for a vacancy decontrol. Currently, landlords can raise rents 25 percent every three years if there has been at least one vacancy. The change would broaden the types of documents used to prove a vacancy.
The third and final change would require landlords to distribute a pamphlet outlining tenant’s rights and to obtain signatures from tenants whenever a change in rent price or tenancy occurs.
Gormally told the council that the changes could solve some of the city’s legal problems.
But a tenant advocate said that this statement made her feel “uncomfortable.”
“[Gormally said] if you want the lawsuits to stop, you’ll basically do what they want you to do, and that makes me a little uncomfortable,” said Eileen Lynch, a tenant advocate, at the Feb. 16 meeting. “Because what power do the tenants have? This is a group of well-funded individuals who can afford to run class action suits.”
Local real estate organizations have sent out pamphlets to amplify their views about rent control. On the opposite end of the spectrum, tenant advocates have recently begun taping small pieces of paper around town that read: “Save your community, save Hoboken rent control.”
‘Down the middle’
Mason believes the changes are important for Hoboken’s government.
“The council was asked to look at this [ordinance] years ago,” Mason said. “It’s an older law. There’s a number of things that need to be addressed because every law needs to be looked at to make it compliant…you need to regularly review these regulations so there’s not a detriment to the city overall, especially where a court is bringing it up.”
Mason doesn’t think the changes appeal to one side of the debate.
“Both sides seem to be unhappy so we probably have something down the middle,” Mason said.
The council can take a final vote on the measure after listening to comments from the public at Wednesday’s meeting.
Mayor Dawn Zimmer’s administration will also formally introduce a budget for 2011 on Wednesday evening at the council meeting. This is the first budget introduction since Zimmer lost control of the council majority, and the council has been steadfast in their demand that the budget be delivered on time.
The budget will cover spending from Jan. 1, 2011 through Dec. 31.
While not spelling out specifics, Zimmer said in her state of the city address that taxes will go down “significantly more this year.”
The City Council will convene on March 2 at 7 p.m. in the City Hall Council Chambers.
Ray Smith may be reached at RSmith@hudsonreporter.com