This past spring, the Hoboken City Council made changes to the city’s longtime rent control ordinance, which applies to most apartments built before 1987 and limits how much landlords can raise the rent each year. Voters have the option of voting “yes” to repeal the city’s changes, or “no” to keep them, as tenant advocates gathered enough signatures earlier this year to place the issue up for a referendum.
The rent control referendum appears as the second question on the ballot.
Rent control was established in 1973 to stop rent hikes that some feared would price out residents of the mile-square city. Right now, most landlords can only raise the rent by a few percent each year, but they can also pass along tax and water surcharges, and they can get bigger increases for making capital improvements and every three years if a tenant voluntarily leaves.
To repeal the changes, vote “yes.” To keep the changes, vote “no.”
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Attempts to fine-tune the law have often met with opposition, and it’s a sensitive issue in Hoboken.
After approximately two years of City Council subcommittee meetings headed by 2nd Ward Councilwoman Beth Mason, changes to the ordinance were passed unanimously by the council in March. But the referendum effectively suspends those changes until the Nov. 8 vote.
The changes
The council approved three major changes.
One change limits the back rent tenants can collect if a landlord is found guilty of overcharging them. Currently, tenants can be awarded money for the duration of the violation, multiplied by three due to consumer fraud laws. Landlords say that this has allowed tenants to collect six-figure payouts from unwitting landlords, some of whom may have bought a building that was charging incorrect rents to begin with.
The new changes limit back payments to tenants to a maximum of two years, but that amount can still be tripled by order of a judge.
A second change eases document requirements for landlords who wish to apply for a rent increase by way of vacancy decontrol (a 25 percent increase once every three years if a tenant vacates willingly). A factor driving these changes was a complaint by landlords that over the years, the city’s bookkeeping was so sloppy that determining the correct rent was difficult.
A third change requires landlords to inform tenants of their rights, and to show proof that the information was supplied.
Mason said last week that she stands by the council’s legislation.
“We worked at it for several meetings for over a year,” Mason said. “Many groups of people were involved in the hearings and meetings and this is something that is significantly needed in our city.”
Tenants vs. landlords
Dan Tumpson is a tenant advocate who helped gather the signatures to place the issue on the ballot.
“The way the council arrived at these changes was completely wrong,” Tumpson said last week. “The main issue [the council] was to address was alleged misadministration of the law.”
Tumpson said the proposed changes don’t correct that. Instead, he said the subcommittee started discussing “major changes to the rent control law.”
Ron Simoncini is a spokesperson for the Mile Square Taxpayers Association, a group of landlords in the city. He supports the changes.
“There are no actual policy changes in these amendments,” he said. “All this does is correct problems with the law.”
He supports the major economic change in the legislation limiting rent back rent reimbursements.
“The [proposed] two year look-back is the most generous look-back in Hudson County,” Simoncini said. “No one returns more than one year of rent overcharges in Hudson County except Hoboken…a two-year opportunity to look at your condition and be able to make a claim is very generous.”
Tumpson believes the law only rewards landlords who break the law.
Simoncini believes it’s not that simple. He said that because the city’s record keeping has been unreliable, it’s not always clear what the proper legal rent is. Also, there are “phantom liability” charges, meaning if the previous owner of a property had charged an illegal rent, the current landlord could be responsible for paying that back rent to the tenant.
Tumpson has been involved in six challenges to rent control laws since 1981, and said this is the first time that the changes will actually go to the ballot. Previously, the council has repealed the law in response to petitions.
“If they undermine rent control, there are [tenants] that will lose their [apartments],” Tumpson said. But Simoncini believes that the changes, if implemented, could result in more properties remaining rent controlled.
“Landlords want to rent their properties,” Simoncini said. He added that many rent-controlled properties have converted over the years because of how the city administers the rent control ordinance.
One change in the ordinance gives “equitable authority” to the rent leveling board over court rulings.
“That’s a problem because it says they have the authority to depart from the law,” Tumpson said. “If you have a board and you give them a right to depart from the law, well there goes the rent control law…the board should be enforcing the law.”
Simoncini said that if tenants and property owners disagree with the ruling, they can still appeal the decisions in court.
Ray Smith may be reached at RSmith@hudsonreporter.com