Efforts are underway in Newark to bring much of its new housing – which is currently exempt from rent regulation – under rent control. An ordinance, put forward by mayor Ras Baraka, requiring newly built apartments be to rent controlled, was recently presented to the City Council. While there are few details so far, the ordinance appears to be aimed mainly at luxury housing. It limits rent increases to 5% over any two-year period on most new housing construction. Newark is proposing this law even though a state law, passed in 1987, exempts new apartment buildings from local rent control laws for 30 years or for the duration of their mortgages. The purpose of the exemption from rent control for most housing built after 1987, was to encourage the growth of new housing to meet the demand for it. At the time, rent control was seen as an obstacle to creating more housing. And, while this exemption was initially granted for five years, it was extended for another five years in 1992, and, in 1997, it was made permanent.
The new rent control ordinance under consideration in Newark relies on a provision in the state law that gives cities the ability to ensure that tenants are not subjected to “unconscionable” rent increases. What’s unclear is what “unconscionable” means. That is left to housing court judges to determine in each case. Newark’s ordinance is attempting to define what is “unconscionable” by limiting rent hikes to 5% over a two year period. In setting a specific limit on rent increases, Newark officials say they are attempting to keep the city affordable as new luxury housing is going up at a fast pace. They were moved to take action because of the sharp increases in rents they saw taking place in Jersey City. As they put it, they don’t want Newark to become another Jersey City -“where steep rent increases in new, uncontrolled buildings are taking some tenants by surprise.”
It seems Newark officials were referring to the ongoing conflict residents of Portside Towers have with their landlord, who is increasing rents as much as 35 percent in some cases. Tenants claim the rent increases are illegal because the landlord failed to complete the necessary paperwork to be exempted from the rent control law. The landlord, Equity Residential, disputes this claim.
Tenants are facing big rent increases across New Jersey as landlords, who are exempt from local rent control laws, raise rents as high as they can. According to the Housing and Community Development Network of New Jersey, the state is one of the most expensive in the nation to rent an apartment. This has become stressful for many families spending more of their income on rent.
According to Zumper, an online real estate rental site, the median rent for a one bedroom apartment in Jersey City is $3435 up 18% from last year. This refers mainly to the cost of housing by the waterfront and in the city’s historic district. Rents can vary dramatically by neighborhood. On Zumper, the average rent for a one bedroom in Greenville is $1600 and in McGinley Square, $1700, but in nearby Journal Square, it rises to $2858. The average rent in Greenville and McGinley Square is out of reach for most residents in these working class neighborhoods experiencing the ripple effects of the growth in luxury housing in Journal Square and elsewhere in the city. .
The lack of any limit on the amount of rent landlords can charge allows them to raise rents as high as they like. And, the potential for higher profits has also led to speculation in the housing market making the cost of housing more expensive for everyone. Would putting luxury housing under rent control be a help or a hindrance in making housing more affordable? What do you think?
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