Newark giving low-income residents struggling due to coronavirus up to $1K to pay rent

Posted May 13, 2020

Tenants across New Jersey can use their security deposits to help pay rent, but there hasn’t been any direct cash assistance to renters who are struggling during the coronavirus crisis.

But in Newark, where about 78% of residents are renters by one 2017 study’s estimate, city officials aren’t waiting around for help.

The city created a $1 million Emergency Housing Assistance Fund to provide low-income residents up to $1,000 each to help pay rent or utilities. It’s a one-time assistance program unless the city can get more funds from the federal government, Newark Department of Economic and Housing Development Director Allison Ladd said.

"We’re really hoping to not only help Newark residents thrive, but first survive during COVID-19,” Ladd told NJ Advance Media on Wednesday.

Applications for city residents will be available starting May 18 on the city’s website.

The rental assistance is being paid for with federal H.O.M.E. grants and possibly some dollars from the city’s housing trust fund, which developers pay into in lieu of having low-income housing in their projects. The $1 million will not take away from other programs since the city received additional funds from the federal Housing and Urban Development Department when the coronavirus first reached New Jersey, Ladd said.

Newark Mayor Ras Baraka also signed an executive order that creates a moratorium on rent increases for the city’s nearly 30,000 rent-controlled units. The executive order is in addition to another one the mayor signed in March that temporarily banned evictions.

“We are a city of renters with only 22 percent of us owning our own homes, Baraka said. “The COVID-19 crisis has left many tenants struggling to pay rent and some unable to pay anything. The actions today supplement our moratorium on evictions and will help tenants keep their homes.”

The mayor’s freeze on rent increases covers additional dwellings that were not included in the portfolio of the New Jersey Housing Mortgage and Finance Agency, which voted in April to suspended rent increases for 36,000 of its rental units.

Not all dwellings in Newark are rent-controlled and the executive order does not apply to Section 8 units. For example, public housing and owner-occupied properties that have up to four units are exempt from the city’s rent control ordinance. Some newly constructed or rehabilitated properties can be exempt too.

The executive order also prevents any increase in rent covered by Newark’s rental control ordinance for parking, pets, the use of furniture, subletting or security. Landlords cannot increase damage and cleaning deposits either.

The moratorium is also retroactive to April 1. It will remain in effect two months after the state of emergency declaration in the city ends.

The city also created a $6 million fund in March to assist the homeless, artists and small businesses impacted by COVID-19. Those funds were reallocated federal grants and Newark officials have said it will not impact the city’s ailing budget, which the mayor has warned will likely suffer revenue shortfalls.

Newark, meanwhile, is still focused on keeping development moving.

The City Council on May 6 approved 18 new developments, including a massive 1,000-unit project on the corner of Orange and Nesbit streets known as Peddlers Square. The city sold the property for $7.45 million and will work “in good faith” to consider the approval of a tax abatement of up to 30 years at a later date, according to the financial agreement.

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