One side says the proposed changes to Hoboken’s rent control ordinance go too far. The other side says they don’t go far enough.
“That probably means we’re somewhere in the middle,” said Council President Beth Mason, whose subcommittee recently proposed changes to Hoboken’s rent control ordinance, originally established in 1973 to protect tenants from advantages that shifted to landlords during a real estate boom in Hoboken.
Anytime the city has proposed changes to the rent control ordinance, protest and resistance usually accompanies the often spirited dialogue. Rent control applies to approximately 8,000 units in the city, and is enforced on many apartments built before 1987. The ordinance prohibits massive rent hikes, though landlords may apply for a 25 percent rental increase once every three years if a tenant willingly vacates, or they may apply for an increase if the landlord is not making a reasonable return on property, as well as through other means.
“The law is not fair. Both sides agree it’s not fair.” – Council President Beth Mason
The city is currently facing a class action lawsuit from landlords in Hoboken who believe the administration of the existing law has not been just. Currently, if a landlord charges an illegal rent to a tenant, the tenant may sue for back rents, tracing back as far as the illegal rent has been charged, with no statute of limitations. In addition, the payments to renters can be tripled because of consumer fraud laws.
The solution may sound simple to some for landlords: don’t charge an illegal rent. However, according to some advocates on both sides of the issue, the city has a poor history of record keeping. Since the enforcement of the law requires very specific paperwork, many landlords worry that if a tenant asks for a legal rent calculation from the rent control office, they’ll learn they’ve charged an illegal rent.
The city has put forth new changes that may be introduced to the City Council as soon as Feb. 2.
One of the proposed changes will impose a two-year statute of limitations or period of repose for tenants who wish to claim that they’ve been charged an illegal rent. The proposed change would limit landlord liability by requiring tenants to request a rent calculation “within two years of the start of his or tenancy” if they wish to question the landlord on the legality of the rent.
“In no instance shall a tenant be allowed to collect rental overcharges for a period in excess of two (2) years as determined by the Rent Leveling Officer or the Board,” according to one of the proposed changes.
Another proposed change requires landlords to provide information explaining tenant’s rights in rent controlled apartments and obtain a signature from a tenant whenever the landlords signs or renews a lease, or increases the rent.
The third proposed change allows landlords to submit alternative proofs of rents and vacancies to the rent leveling office for the record books. Currently, landlords must file specific paperwork, including a vacancy decontrol certificate, to be eligible for a 25 percent rent increase by means of a vacancy decontrol. One landlord believes the change is being made because the city’s recordkeeping has been unreliable, and it takes the onus of good recordkeeping off the city, allowing for alternative means of proving a rent is legal.
Public speaks out
The subcommittee held a public hearing on the proposed changes on Monday evening, with approximately 50 members of the public in attendance at the City Hall council chambers.
Ron Simoncini, a landlord advocate and spokesperson for Mile Square Taxpayers Association, an organization of landlords in Hoboken, said the changes “do not go far enough.”
“The first issue is in the proposed amendment 155-4B (disclosure) which says that we’d be required to obtain a signature on every lease or renewal,” Simoncini said. “There’s no reason to do this. It should [only be required] on a new lease.”
Mason responded to this claim later in the week in an interview with The Reporter.
“To be clear on disclosure, we almost need to be at the point of over-disclosing, at least until [landlords] get in the habit of informing everyone,” Mason said.
Simoncini, who often speaks for many landlords at council meetings, said he hoped larger provisions would be amended, including the exclusion of one- to four-unit buildings from the rent control law. Tenants have vigorously opposed this notion, saying this exclusion would basically repeal rent control in the city.
Simoncini has long blasted the council for not making changes to the ordinance, saying it requires political courage to do so. He said at the meeting that the city has “done a good job with the things put [forward]” but then asked, “if you look at two years of discussion, is it really a good job?”
Another landlord, Joe Murray, spoke out, saying the changes also “don’t go far enough.”
“The block I live on is slowly becoming converted to condos,” Murray said. “Why? Because the owners cannot get a reasonable rent on the buildings they occupy when they charge the rent just to meet taxes and expenses.”
One tenant advocate, Dan Tumpson, called the proposed two-year repayment “a rip-off.”
“I’m very concerned that you’re going to do a few things now and a few things down the road,” Tumpson said. “Step by step you’re going to re-write the ordinance.”
Cheryl Fallick, another tenant advocate, said the “details of the alternative proofs must be more avidly spelled out.”
Cathy Cardillo, a tenant advocate lawyer, e-mailed the subcommittee with her thoughts on the proposed changes. Cardillo called the proposed changes a “clear abrogation of tenant rights.”
“Apparently, this continued right to enjoy living in one’s apartment, without the threat of coercion or a holdover eviction, is either of no moment to you, or the influence of moneyed interests carry more sway,” she wrote to the subcommittee and special counsel Victor Afanador on Jan. 23. “Especially when these interests promise it would end their continued and costly litigation against the City – something, of note, that CRAHH (tenant organization) is working hard to end for you, at no cost.”
The class action lawsuit against city offices, including the Rent Leveling and Stabilization Board, is currently in the discovery phase. The plaintiffs, landlords of the city, seek damages in millions of dollars of back rent, saying that the city is mishandling the law and that misadministration has been the norm.
Joseph Hottendorf of Liberty Realtors raised the issue of lawsuits against the city during the public hearing.
“The first section will get rid of the class action suit,” he said, referring to the proposed two-year statute of limitations. But he also recommended the city “tighten up” the legislation before presenting it forward as an ordinance.
Though the changes are said to prevent future lawsuits, Councilman Ravinder Bhalla, who also sits on the subcommittee, declined to comment when asked if the changes proposed have any effect or were in response to the pending litigation facing the city.
However, Mason said the committee was not formed to fight the lawsuit.
“The issue here is that the litigation is happening because there is a number of things that are a challenge in the law,” she said. “The law is not fair. Both sides agree it’s not fair. Information isn’t clear in the law, so we need to be able to make sure we make it clear…the proposed changes are in response to the fact that we haven’t looked at this ordinance in a long time.”
Mason and Bhalla both called the public hearing productive, with Mason saying the proceedings went forward with civility, something relatively new to rent control discussions in Hoboken.
Mason said on Wednesday she hoped the legislation would be put forward at the next council meeting, but the timeframe was not clear at the public hearing. The comments from the public hearing will be reviewed, and changes will be made to the proposed amendments.
Ray Smith may be reached at RSmith@hudsonreporter.com