New proposal could ease restrictions on Newark rent hikes

By Dan Ivers | NJ Advance Media for NJ.com
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on August 07, 2015

Newly proposed changes to Newark's rent control policy would slightly ease restrictions on when landlords would be able to raise rates for tenants

 

NEWARK – A battle over the city's rent control regulations that has waged on for more than a year may finally be nearing its conclusion.

newly crafted ordinance introduced to the Municipal Council on Wednesday would loosen restrictions on landlords hoping to increase rents, allowing them to raise them in a wider variety of circumstances than under the existing law.

Council members who have been involved with the legislation indicated that they believed it struck a balance that would allow for increases in certain circumstances, while maintaining protections for tenants against aggressive hikes that might force them out of their homes.

"Ultimately we're all looking for the same goal, which is to strengthen tenant rights," said South Ward Councilman John Sharpe James.

The original ordinance was passed in May, fulfilling a campaign promise made by sponsored by then mayor-elect Ras Baraka. The law took effect on June 20th, impacting more than 10,000 rent-controlled properties in the city.

Before long, however, the newly formed Newark Apartment Owners Association challenged the law in court, asking an Essex County judge to order an immediate stay on the law and declare it unenforceable.

That request was not granted, but city officials soon began working on what they called "technical" adjustments to the law, setting off new tensions between tenants worried that the ordinance might be weakened, and landlords who argued that the existing regulations were too stringent and threatened to flatline the city's housing market.

The latest amended version maintains a protection advocates describe as key for tenants – tying automatic annual increases in rent-controlled properties to the consumer price index, which is typically less than 2 percent.

However, it allows landlords more opportunity for more substantial increases of up to 20 percent after a tenant leaves, provided they make major improvements to a property.

The existing law requires that those investments be equal to $5,000 per room in the building in order to qualify for the increase, which the new proposal would lower to $2,500 per room, plus $500 for additional bedrooms. It would also expand the definition of the "major improvements" that would allow for the increase.

The proposed changes were welcomed by the Newark Apartment Owners Association, which contends that the ordinance currently on the books discourages reinvestment into rental properties, and threatens to essentially flatline the city's housing market. 

"Its certainly not everything owners wanted, its certainly not everything tenants wanted, but I think it's a more balanced ordinance than what's currently on the books," said Derek Reed, an attorney for the association.

A representative for Newark Tenants United, which had been lobbying city officials on behalf of tenants, could not be reached for comment.

Council members James, Gayle Chaneyfield-Jenkins and Anibal Ramos Jr. originally sponsored the amended ordinance, but they recently withdrew their names from the legislation after a number of changes were made by the city administration.

Despite the withdrawals, they said they remained supportive of the proposal, and simply wanted the policy to reflect that it was authored by the administration.

In a statement, Ramos said the proposed law was the product of careful work by both the council and Baraka's office.

"It ties rent increases to the Consumer Price Index, it better defines capital improvement surcharges and it requires landlords to address health and safety violations," he said.

The new ordinance will be subject to a public hearing at a council meeting next month, after which a final vote can be taken.

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