Newark considers changing rules for rent increases on vacant units

By Karen Yi | NJ Advance Media for NJ.com
on March 06, 2017

 

NEWARK -- City officials are considering changing how rent hikes are calculated and approved in rent-controlled residences that become vacant. 

On Tuesday the Newark City Council will decide whether to make four changes to its 2014 rent control ordinance that they say will clarify the type and amount of investment a landlord must make to be able to raise rents.

"We introduced this stuff, this is progressive," South Ward Councilman John Sharpe James, who co-sponsored the city's original rent control measure, said of the changes. "It's cutting edge."

Tenant advocates have welcomed some of the tweaks but worry the changes will incentivize landlords to push residents out of their rent-controlled homes in order to qualify for rent increases. 

"The amounts that (landlords) have to spend to rehabilitate are just too low and provide too high an incentive for abuse," said tenant leader James Powell. He said the current ordinance went through a rigorous process and there was no reason to change it. "Right now it's good policy and good law," he said. 

Under the city's current rent control ordinance, a landlord can ask the city to raise a vacant unit's rent by a maximum of 20 percent if the landlord spends $5,000 multiplied by the number of rooms in the unit to rehabilitate the residence.

The proposed changes would reduce that threshold and allow landlords who spend eight months worth of a unit's rent to ask for up a 20 percent increase in rent. Rehabilitation work worth six months of rent would allow a 15 percent increase and work worth four months of rent would allow a 10 percent bump.

Councilman James said all sides agreed the $5,000 per room threshold was too high. He said requiring eight months worth of rent as a rehabilitation investment was a compromise and dismissed worries about renters being pushed out. 

"If you look at Newark's history, we've been maligned as one of the worst places to live. We can't run a city on what they think might happen, the worst case scenario," he said. "This does not touch any current residents

The amended ordinance also clarifies what is considered substantial rehabilitation so landlords will be forced to make more than just basic repairs to qualify for a rent increase. Landlords will no longer be credited for work and materials they provide themselves. The changes also redirect any appeals from Rent Control Board decision to Superior Court instead of the City Council.  

James maintained the changes strengthened protections for tenants against slumlords and poor maintenance on buildings.

Housing advocates said clarifying what constitutes substantial housing and removing credits for a landlord's own work gave the law more teeth to prevent tenant abuse.   

Joseph Della Fave, executive director of the Ironbound Community Corporation, however, worried redirecting the appeals process from the council to the courts could burden tenants.

"When people have an appeal process to the council then they have a cost-free option," he said. "If it has to go to court, it's no longer cost-free."

The city is also reworking a proposed inclusionary zoning ordinance that will require new housing developments to provide a percentage of affordable units. It's not clear when that ordinance will be voted on. 

The City Council will meet at 10 a.m. on Tuesday at City Hall to decide whether to adopt the ordinance.

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