Hoboken Voters Narrowly Defeat Decontrol Proposal

After appearing on the November ballot for the second straight year, a referendum to change rent controls in Hoboken was once again narrowly defeated by a slim-margin of 122 votes. If the measure had been approved, it would have permanently removed rent control from buildings with four or fewer rental units once a current tenant moves out, and would have also allowed a one-time decontrol/recontrol in buildings with five or more units.

Property owners who supported the referendum plan to challenge the result in court once again, despite local tenant advocates fighting to uphold the results last year.

N.J. Towns Move to Limit Rent Controls

There are several moves afoot to limit or eliminate local rent controls in New Jersey, on a municipal level. For instance, in the town of Neptune a measure is being considered to eliminate rent controls for properties with four rental units or less.

Meanwhile, in Hoboken a referendum to reform local rent controls will appear on the ballot this year after having been narrowly defeated in last year’s post-Hurricane Sandy voting. The ballot measure would eliminate rent controls in buildings with 4 or fewer rental units upon vacancy and would allow a decontrol-recontrol scenario for units in buildings with 5 or more units.

 

N.J. Governor Christie Vetoes Rent Control Bill

New Jersey Governor Chris Christie recently conditionally vetoed legislation that would have extended rent controls to some new and existing senior citizen housing developments. New Jersey has some 100 out of 500 municipalities that maintain some form of rent control for existing housing but has also enacted State legislation that precludes rent controls for new housing.

The conditional veto sends the bill back to the Legislature with amendments including a request for a study of the effects of rent controls on seniors and their housing. Since any such study is likely to show that rent controls negatively affect the quantity and quality of housing, the N.J. Apartment Association lauded the veto as the kiss of death for the rent control proposal.

Ordinance allows removal of rent control for new leases in Little Ferry

 

LITTLE FERRY – The Little Ferry Mayor and Council have amended Chapter 15 of the Code of the Borough, which will allow the removal of rent control for new apartment leases in the borough.

At the April 9 meeting, the council voted to pass this ordinance which allows apartment owners to charge the appropriate amount that the market dictates for their apartments. This is covered under section 9 in the Code of the Borough of Little Ferry, which was added by the mayor and council.

Mayor Mauro Raguseo cited the borough experiencing a 1.75 percent decrease in its valuation from 2012 to 2013, which is approximately $20 million as a reason for the new ordinance.

“Having a moderate rent control policy, which the proposed ordinance is, brings forth the opportunity for the apartment owners within the borough to realize more value for their investment. Higher valued property in Little Ferry is good for the community as a whole,” said Raguseo.

The ordinance will not affect any current tenants in apartments, only those who move into a previously vacated unit. According to section 15-2.2, “any rental increase at a time other than at the expiration of a lease or termination of a periodic lease shall be void.”

Those who already live in apartments in the borough can continue to renew their leases without being subject to a rent increase. Tenants with leases of less than one year and those who rent on a month-to-month basis will also not be affected and cannot be subject to eviction “in order to create a market-rate unit,” as described in the ordinance.

“The ordinance protects all current tenants while allowing the property owner to secure future earnings on their investment,” said Raguseo. “An apartment will only be free of rent control when the current tenant vacates the apartment. Current tenants need not worry about having their rent increased to market rate. The council made sure the ordinance is clear and that current tenants are protected.”

Raguseo also stated that the appeals process has not changed and that resident can still file an appeal with the Rent Leveling Board if a landlord does try to raise their rent illegally.

The ordinance also requires the property owner to notify the Rent Leveling Board when a unit becomes a market rate unit, as well as a report due by Jan. 31 on the number of units in each building that are subject to rent control and as well as the number of apartments that are market rate.

 

Source: North Jersey.com

Wheel Estates Residents Lobby Rent Board to Raise Rate

iberkshires.comBy Tammy Daniels

Residents of Wheel Estates Mobile Home Park advocated for a rent increase that will them to buy the park.

NORTH ADAMS, Mass. — It wasn’t the first time a crowd of irate mobile home owners attended a Mobile Home Rent Control meeting. But Wednesday was surely the first time they had ever demanded a rate increase.

“You’re here for the rent control … Give it to them so we can have a place to live,” implored resident David Campbell after the board said it could not act without a formal petition. “We want to live normal like everybody else.”

A newly formed tenants cooperative at Wheel Estates is hoping to buy the park for $2.73 million from Morgan Management but has to have its finances in order by March 27. Morgan, which has been shedding real estate holdings in Berkshire County, already has another buyer waiting in the wings.

Wheel Estates residents are worried that will mean another negligent landlord. Rather than see rents go into a corporation’s pocket, they want it to go into the detiorating water system, pothole-ridden roads and other neglected infrastructure. Continue reading

University of Regina economist says rent control policies bad idea

 

By Terrence McEachern, Leader-Post

REGINA — A Regina economist is cautioning that recent calls for rent control legislation is not the best way to deal with the availability of affordable rental units.

“The short answer — not really,” said Jason Childs, an associate professor of economics at the University of Regina. He explained rent control legislation can be divided into two types — those that set a cap on rent and those that control rent increases gradually.

Jason Childs, associate professor of economics at the University of Regina, argues rent control policies could have negative impacts on the people they are designed to help. Instead, he says social housing and subsidies to low-income renters should be considered. Photograph by: Don Healy , Regina Leader-Post

Regardless of the type, Childs argues rent control legislation doesn’t help the people it is supposed to help. He said in places with rent controls, there is a tendency for tenants to hold onto low-rental units even if their economic situation improves. Childs cites actress Faye Dunaway as an example of someone who lived in a rent-controlled apartment in New York City for several years before finally vacating.

“If you’re already in an apartment, you’re golden. If you’re trying to find one, you’re out of luck,” he said. “The distribution of the effects of this policy is really, strongly negative for younger folks and new arrivals. So, we’re going to be protecting established residents at (their) expense.”

Childs also argues rent control legislation would negatively affect the quantity of rental units. Developers would be faced with a disincentive through the introduction of uncertainty in terms of demand and the ability to make a profit in the rental market.

This is combined with a quality problem with rent-controlled units.

“Basically, if you control the rate at which I can increase the rent … (and) if I’m not making money at this, I’m going to let maintenance slide,” he explained.

The issue of rent control arose earlier this week when a group of tenants living at 2221 Robinson St. spoke out about approaching monthly rent increases as high as 77 per cent on Sept. 1. Many have said they would rather move than pay the monthly rent increases — in some cases — from $675 to $1,195 for a two-bedroom apartment.

On Tuesday, the matter reached the floor of the Saskatchewan legislature during question period when NDP MLA David Forbes argued for rent control legislation in light of the Robinson Street situation.

However, Childs argues more social housing and subsidies to low-income renters are better ways to approach the issue.

In terms of the Robinson Street rent hikes, Childs admits 77 per cent is a huge monthly rent increase and that he has sympathy for the tenants, but also questions the fairness of tenants receiving a reduced rent when young people and new arrivals to the city are paying market value.

“This is less than a zero-sum policy,” he said. “Society as a whole loses.”
Source: Leader Post

Rethinking Rent Regulation

By Robert Knakal

One of the most prominent needs in the New York City real estate market is affordable housing.With the expected growth in our population over the next couple of decades, it is imperative that work-force housing exist. This is housing for police officers, firemen, teachers and the scores of other workers who make this city run. An insufficient supply of affordable housing for these folks is a critical issue for the economic well-being of the city that future local administrations will have to address.

Most of our elected officials continually, and inaccurately, refer to our rent-regulation system an “affordable housing” program. Rent control and rent stabilization do not create affordable units as options for our current work force.

In fact, rent regulation actually does just the opposite, as it reduces the number of options for new residents coming into the marketplace. There are 3.3 million dwelling units in NYC, but someone new coming into town looking for an apartment really has only 2.3 million “choices,” as 1 million units remain stuck in the rent-regulation system.

This constraint on supply means that market-level rents are artificially high due to the artificially low rents paid by folks who have been in apartments for a long time. Study after study shows that in the absence of price controls, market prices are lowered. Getting rid of rent regulation would mean more choice and lower rents for the overwhelming majority of New Yorkers. It would also mean lower property taxes for those in free-market properties, as currently regulated properties would begin to contribute an appropriate level of taxes.

No I haven’t lost my mind—I don’t expect rent regulation to go away anytime soon. But the program’s existence undeniably exacerbates the housing problems we have here. Until the nonregulated residents of New York realize that they are paying higher rents and higher property taxes than they should be because they are the ones subsidizing rent-regulated tenants, and they become vocal about it to local politicians, rent regulation isn’t going anywhere.

Another negative aspect of rent regulation is that the benefits of subsidized rent levels create motivation for occupants of these units not to move, regardless of whether the unit’s size is appropriate for them or not. Therefore, we have little old ladies living in three-bedroom apartments by themselves and families of four or five living in one- or two-bedroom apartments. This misallocation of our housing stock is not good for the city.

Furthermore, the fact that these rent subsidies are given out based on inertia rather than need, as there is no means testing on rent regulation, means that this program does not address the affordability issue.

So how does the city create the affordable work-force housing that is so desperately needed?

One idea would be to bring back the 421a program in its original form to create needed affordable units. Changes to this program were precipitated by elected officials who don’t fully understand the program.

Another idea is to create a citywide 421g-type program to incentivize the private sector to convert obsolete office buildings into affordable housing. There is an oversupply of office space presently, and removing some excess space would simultaneously strengthen the office-space market and create affordable housing.

Lastly, the city could stimulate the creation of additional affordable housing units by providing FAR bonuses. Giving FAR bonuses in ratios of 3 to 1, or 4 to 1, to developers doesn’t cost the city a dime. It just takes the political will to address those who will inevitably complain that larger buildings are blocking out the sun or are creating negative impacts on the quality of life.

If these no-cost incentives are created properly, it is very likely that affordable units will be created by the private sector, eliminating the need for the government to try to figure out how to provide these units and creating a more livable city.
rknakal@masseyknakal.com

Robert Knakal is the chairman and founding partner of Massey Knakal Realty Services; in his career he has brokered the sale of more than 1,300 properties with a market value in excess of $9 billion.

Source: Commercial Observer