In the middle of a New York City Rent Guidelines process that has property owners fearing the first ever zero rent increases in City history, the Newark City Council passed a new ordinance that will make it much more difficult for property owners to raise rents in rent-controlled units.
Prior to the vote, owners were permitted to raise rents annually by 5% if their building has 49 units or less and by 4% if the building has more than 49 units. Owners could also ask the City of Newark to raise rents up to 25% in vacant apartments if they were able to show proof that they spent $100 or more in making an individual apartment improvement. The new ordinance caps the annual rent increases to the New Jersey Consumer Price Index and caps the increases of vacant apartments to 20% and raises the threshold to request that higher rent to $5,000 per room in a given apartment.
Newark property owners are livid with the new ordinance, stating that it fails to “take into account the cost of maintaining those buildings and disincentives from making improvements to their properties.” New York City property owners can agree with this. With a Price Index of Operating Costs (PIOC) showing an increase of 5.7%, including increases in all components of building operating costs, the New York City Rent Guidelines Board is clearly not taking into account all the costs that owners face when maintaining their properties. The first ever zero rent increase was proposed by the RGB despite these increases in operating costs and now New York City owners are scurrying to make sure a final vote of zero rent increases does not leave them in a similar burden that Newark owners must now deal with.