Newark's rent control fight gets second wind

By Naomi Nix | NJ Advance Media for NJ.com
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on January 21, 2015

NEWARK — Perhaps for Newark’s city council, take two will be the charm.

Less than a year after Newark’s city council passed legislation overhauling the city's rent control laws, local legislators are looking to re-write key parts of the new guidelines.

Late last year, Newark mayor Ras Baraka proposed legislation revising the rent control guidelines the council passed last May, which made it harder for landlords to raise rent;

And some city council members are proposing their own tweaks to the newly-passed law.

"We are working with the Newark Municipal Council to protect hard-working Newark residents from aggressive rent increases that would force them out of their homes and neighborhoods," Baraka said in a statement.

“We are exploring technical fixes to fix the rent control ordinance that will not change the spirit of the amendments that were implemented."

Baraka was one of the councilman who sponsored the original legislation revising the rent control laws. In another effort to protect tenants his administration sent a crew of code enforcement inspectors today to a building with a landlord they say has left tenants with faulty heat, rat-invested rooms and structurally weak buildings.

The council deferred a vote on Baraka’s proposal, but North Ward councilman Anibal Ramos, Central Ward councilwoman Gayle Chaneyfield Jenkins and South Ward councilman John Sharpe James are separately working together on their own revised rent control guidelines.

Ramos said the council's version of the regulations will likely see a vote next month.

Meanwhile, activists on both sides are lobbying legislators to make the law sway more favorably to tenants or landlords.

Two key parts of the legislation have fueled much of the debate. The first is the council's decision last year to cap automatic annual increases in rent controlled properties to the consumer price index, which is usually less than 2 percent as opposed to the 4 or 5 percent annual increase under the old law.

New legislation is likely to keep capping rent increases to the consumer price index but further clarify how that figure is calculated.

“I think the bigger issue became to clean up some of the language in the previous ordinance,” said North Ward councilman Anibal Ramos, who said the draft his office helped write keeps the consumer price index increase.

The second major issue is how much and under what circumstances landlords are allowed to raise rent of vacant apartments that they rehabilitate. Last May the council passed legislation which capped the rent increase for vacant rehabilitated units to 20 percent if the apartment owner spent $5,000 per room in the unit.

New legislation could change both the $5,000 figure as well as the definition for what counts as a rehabilitation or major improvement.

Derek Reed, the lawyer representing the Newark Apartment Owners Association, who has seen various drafts of the regulations, said even with revisions the regulations could disincentivize landlords from making improvements to their buildings and hurt the local economy.

“I still think that the council is missing the mark as far as how to address the devastating financial impacts,” said Derek Reed, the lawyer representing the Newark Apartment Owners Association.

“How can we work towards softening that impact and still accomplish the goals I know the council is looking to accomplish.”

But the tenant activists have their own worries about revising the legislation.

"We are very concerned that any changes...have to be accompanied by language in the preamble section that makes it crystal clear that those changes are not changes but clarifications,” said Matt Shapiro, of the New Jersey Tenants Organization

As activists and lawmakers debate the future of Newark's rent control law, it will likely be a judge who has final say.

Soon after the new regulations were passed by the council last May, the Newark Apartment Owners Association filed a lawsuit alleging it was unconstitutional, too vague and unfairly burdened landlords.

In addition to the legal fight, the Newark Apartment Owners Association commissioned a study to send to city council members from the Philadelphia firm Econsult Solutions. The study showed the new law could cost the city more than $17 million in property tax revenue in the long run.

The research group contends the new ordinance will decrease annual investment in apartment buildings by $25.2 million per year resulting in the loss of close to 400 jobs in the city.

But Shapiro cast doubt on those claims, saying landlords will get their fair share of profit.

“It was the right law to pass,” he said. "And we stand by it. We stand by it strongly.”

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