City officials withdrew and made changes to a proposed rent control ordinance at their meeting Wednesday night, then introduced a new version that they claimed better protected tenants, but despite the change, many members of an audience of more than 125 people were skeptical. When the four-hour meeting adjourned at 11 p.m., one thing was clear: questions remained about the proposal’s scope, its purpose, and even whether it will apply to the buildings that officials say it will. During the meeting, the council listened to comments and concerns from residents of the buildings that will be affected, as well as from tenant advocates, one of whom was almost arrested when he refused to stop shouting at the lawmakers. At the end of the night, the council voted 6-2-1 to introduce the new measure. It is scheduled to come up for a public hearing and final vote on Wednesday, March 1. The main part of the ordinance will impact about 20 low- and moderate-income buildings in town whose owners had, since the 1960s and 1970s, participated in an arrangement with the federal government that forced them to keep the rents artificially low. In exchange, the owners got a low-interest mortgage. In addition, in some buildings, the government provided subsidies to the landlords to make up the difference between the amount that low-income tenants could afford to pay and the rents the landlords were supposed to receive. Buildings that operated under arrangements like this include Clock Towers, Grogan Marine View Towers and 16 properties owned and managed by the Applied Companies. City officials say that another low-income complex, Church Towers, probably will not be affected. Since the federal government was regulating rents in these buildings for as long as 30 years in some cases, the buildings have been exempt from the city’s 1972 Rent Control Ordinance. That law, approved 28 years ago, applies to most buildings in town. It forces landlords to keep their annual rent increases to the Cost of Living Adjustment, usually 2 or 3 percent each year. It also allows them to raise the rent by 25 percent every three years upon voluntary vacancy of a tenant. Recently, the federal government announced that it was going to give up control of the 20 low- and moderate-income buildings in question. It planned to give tenants receiving federal subsidies vouchers to make up the difference between what they are paying in rent and what the landlords are supposed to get. Now, instead of the government paying the difference to the landlord in the form of a subsidy, the tenants can make up the difference by giving their landlords vouchers. The government also made the vouchers “transportable,” meaning that they can be applied wherever tenants choose to take them. The new system raises questions about whether the buildings’ rents will now be governed by the 1972 Rent Control Law. Tenants living there are concerned that the buildings’ owners may be able to jack the rents up to whatever they want, and also that they may refuse to accept vouchers. In response, the City Council came up with a measure saying that a certain percentage of units in the affected buildings will be allowed to fall under rent control, while the rest do not have to. The measure resulted in much controversy last week. And hovering above all the controversy is a question of where exactly the law will apply, as some of the rents that were controlled by the federal government will immediately come under the purview of the state once the federal government relinquishes control. City officials have said they needed this new ordinance in case state oversight does not apply. Breaking it down Under the terms of a City Council ordinance originally introduced at a Feb. 2 meeting by Councilman Stephen Hudock, landlords that own buildings that had been regulated by the federal government would be allowed to bump the rents up to market-rate for 70 percent of the units after existing tenants voluntarily left. The remaining 30 percent would fall under rent control. Landlords would only be able to exercise the special vacancy decontrol one time. After that, the apartments would come under the 1972 Rent Control Law. City officials also claimed that the new law will force owners to continue accepting vouchers, but in actuality, there is no mention of vouchers in the law. At this Wednesday’s meeting, the council withdrew that ordinance and changed it so that 70 percent of the units would actually remain under rent control, and only the remaining 30 could become market-rate after tenants left. Hudock said Wednesday that he inverted the numbers because it seemed to be “more fair to the tenants.” “There is really no absolutely right way and no absolutely wrong way to do this,” said Hudock after the meeting. “What I am trying to do is look right down the middle of this issue and protect as many people as we possibly can, while still presenting something that is fair to everyone, from tenants to landlords.” As for tenants’ fears that they may be forced out, there is a state law in place that says that landlords of all buildings in the state may only ask tenants with leases to move out for “just cause” – for instance, if they fail to pay their rent, or if they create a nuisance. But it is unclear whether the laws can force landlords to accept vouchers. It is also unclear where state control of the rents would supersede the city proposal. Not sure what will happen Hugh McCluskey, an attorney hired by the city to advise it on housing issues, told the council that after reviewing the new law, he believed that there was some question about whether or not the 1972 Rent Control Law would apply to the properties without the new law in place. “These properties probably are not protected by rent control,” he said as he stood in front of a giant poster board outlining the arguments in favor of the ordinance. “If we go to litigation over this, the landlords will probably move to try and go to 100 percent market rate on every apartment in these buildings. If you don’t make an amendment to the rent control ordinance, you can bet your bottom dollar that it will become an issue because there is just too much as stake here.” But tenants’-rights activists said that McCluskey and city officials were misinterpreting the way the law works and giving landlords a huge boon. They said that there is no reason that the apartments wouldn’t immediately fall under the 1972 Rent Control Law as soon as they came out of federal control. Thus, they maintained, the changes are only giveaways to landlords. “The city’s rent control ordinance defines not who is covered, but who isn’t,” said Marine View Plaza resident and tenant activist Annette Illing, who had argued her case unsuccessfully with city officials in the halls before the meeting. “What they are doing is saying that buildings that were under federal regulation are now retroactively not covered by the rent control ordinance. And then they are saying that once the federal regulations expire they will be covered with the following exceptions. And the exceptions are reprehensible.” But during the meeting, McCluskey rejected those arguments. He pointed to a letter that a city official sent to landlords in 1988 that said buildings that were regulated by the federal government would not fall under the city’s rent control laws when those regulations were lifted. And he said that the courts had interpreted a phrase in the law exempting certain landlords from rent control laws “with a broad brush” in other state and federal cases. Mayor Russo took the microphone several times to tell residents that the ordinance was intended to protect them, not benefit landlords. “This resolution was motivated by the fears of some residents in Clock Towers who were worried about the imminent sale of that building,” he said. “If these amendments are not in place, then the new owners of that building could come in and set market rates for every apartment in that building.” Still, some residents wondered why the administration was seeking to make complicated adjustments to the rent control ordinance, when it could simply state that buildings that once were regulated by federal agreements fall under the purview of the Rent Control Law. “Why don’t we put an addition to the law that makes it very clear that when these regulations end, these buildings come under the rent control law?” asked Daniel Tumpson, a long-time tenants rights activist who was later escorted to the back of the council chambers by police for approaching the council and continuing to shout at them after debate had been cut off. “Instead of doing something clear and simple,” Tumpson said, “you are adding all these exemptions.” At least one member of the council appeared to have been moved by Tumpson’s logic. “Before we vote on this, I want to see if it is possible to do this with no vacancy decontrol at all,” said Councilman Dave Roberts. Officials noted that the 1972 Rent Control Law does provide for vacancy decontrols anyway. However, those controls would not apply unless a tenant voluntarily vacated after having lived there for three years or more, and they would be limited to 25 percent. Another councilperson said that the changes Hudock had made to his resolution might warrant her vote. “I’m going to take another look at this and see if this is the best thing for the tenants,” said Council President Nellie Moyeno, who had said the previous week that she was not “comfortable” with a measure that would allow 70 percent decontrol. Meanwhile, one landlord said the week before the meeting that the ordinance has other advantages. Joseph Barry, who owns Applied Housing, said that allowing the landlords to increase some of the rents to market-rate will ensure that they have sufficient funds to maintain the buildings properly, rather than neglecting them as is sometimes done in low-income public housing. After nearly an hour of debate had passed, McCluskey boiled the legalese in the 10-page city ordinance down into a down-home metaphor. “What this amendment is designed to do is not take any chances,” he said. “We don’t want to wait to determine if the baby has pneumonia; we want to give it its antibiotic now before it’s too late.” Still a number of residents left the meeting shaking their heads and wondering aloud why the city officials wanted to go ahead with this. “Instead of just letting the ordinance take effect, they are playing God with something that works,” Illing said. Frightened of change Many of the tenants who spoke out at the meeting had lived in buildings like Clock Towers and Marine View Plaza for decades and now will deal with changes in more than just the rents. The buildings may no longer have to take tenants from existing waiting lists of people who want to get into the low- and moderate-income buildings. They also may not have to give preferences to family members of residents who want to move out of their family’s apartment in the complex and into their own. In addition, they may not have to transfer people within the buildings who want to move to bigger apartments because their families are growing. One resident said that he would not have been able to stay in Hoboken if not for low rents in these buildings. However, some of the residents of these buildings have become high wage-earners and have even purchased outside property of their own, but have continued to live in these buildings at low rents because there is no law forcing them out. Some of the city’s top officials live in the low- and moderate-income buildings. Contentious The contentious council meeting also had its usual dose of cat-fights between Mayor Anthony Russo and Councilman Tony Soares. After one exchange, the mayor charged that Soares was “a mean man.” Soares then accused the mayor of having referred to him under his breath as “a little mean man,” an apparent reference to a form of dwarfism knows as Achondroplasia that has stunted the councilman’s growth. The mayor adamantly denied the charge. After the meeting, Soares complained about the manor in which the mayor had emceed during much of the debate.
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