Newark leaders look to ease concerns over potential rent hikes

By Dan Ivers | NJ Advance Media for NJ.com
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on September 04, 2015

NEWARK – As the city's rent control policy lingers in a state of limbo, Newark leaders are looking to calm tenant groups' fears that they may soon be forced or priced out of their homes.

On Wednesday, the Municipal Council honored a request from Mayor Ras Baraka's administration to defer a proposal that would have made it slightly easier for landlords to increase payments on rent-controlled apartments upon vacancy, provided they make specific investments in the property.

Before the vote, however, Baraka approached a podium at City Hall, and sought to reassure residents that the proposed revisions were aimed at encouraging landlords to repair their buildings.

"There are landlords who are not owners of huge buildings like the ones in Forest Hill. There are landlords who have 3 apartments, and they're living in one...there are landlords who have 20 apartments," he said. "There are buildings that need significant rehabilitation."

The statement was prompted by an escalating push from tenants and their supporters to maintain a policy the city adopted last year, soon after the mayoral and council election.

Since then, however, officials have expressed a desire to loosen some of those restrictions by reducing the amount of investment required of landlords to earn up to a 20 percent increase in rent, from $5,000 per room to $2,500 per apartment, plus $500 for each bedroom.

An organization of landlords filed a lawsuit last year claiming the existing law is unenforceable, and the subsequent shift has given many tenants the feeling as though they are fighting against political forces greater than themselves, according to Matt Shapiro, president of the New Jersey Tenants Organization.

"Those are the people who elected (the mayor and council) to office, and those are the people they owe their allegiance to. Not to landlords who don't live in Newark, and are just taking money out of Newark," he said.

Derek Reed, an attorney for the Newark Apartment Owners Association, dismissed the allegations of any backroom dealing, saying any adjustments to the policy would be won on their own merits.

"I think those are reckless allegations that seem to impugn the very elected officials that have given the tenants the most restrictive rent control ordinance Newark has ever seen, and maybe the state has ever seen," he said. "We don't know what else they're being offered by the landlords."

Baraka and other council members maintain that their new proposals continue to protect tenants rights by tying automatic annual increases in rent-controlled properties to the consumer price index, which they say is likely to be only around 1 percent, and by requiring landlords to be free of major code violations in order to qualify for larger increases upon vacancy. The most recent proposal would also allow landlords and tenants to appeal rent control decision to the municipal court, rather than the council itself.

Many council members also claim the existing law actually discourages significant improvements to the city's housing stock by limiting owners' ability to recover their overhead cost within a reasonable time frame.

"If you want to put granite top counters in, as a landlord you have the right to recoup some of that investment. At $5,000 per room, you weren't going to get landlords making investments," said North Ward Councilman Anibal Ramos Jr.

Tenants have also expressed fears that the changes would allow landlords to purposefully neglect their properties in hopes of forcing tenants out, creating a vacancy that would allow them to drastically increase rent.

"We call that a passive eviction, because the tenants get fed up with the way it looks," said Elaine Ellsbury, interim president of a coalition of residents at the Colonnade, a 560-unit building in the city's North Ward.

Baraka addressed those concerns on Wednesday, however, saying ousting tenants evictions with the goal of raising profits was a near "impossibility" under state law. He told the council he had formed a committee to help craft a new ordinance, and would consult with both landlord and tenant groups, after which he expected to present them with a final proposal.

"Ultimately what we need to do is come to what a reasonable number is for landlords. We're going to bring it back and give people the opportunity to have that discussion one last time," he said.

Council President Mildred Crump also attempted to clear the air, cautioning against spreading "misinformation" and assuring tenants that their concerns would be carry equal weight to those of city landlords.

"Most of us sitting up here have been tenants at one time or another. We didn't always own homes," she said. "We can empathize with those who are current rents about how this should be handled."

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