A Bedroom for Some or a Community for All?

At a rally at the Hoboken Elks Club in 2001, Senator Bob Menendez asked if the Hoboken of the future would be “a bedroom for some or a community for all.”

The future is now.

Hoboken, an industrial powerhouse for most of the 20th Century, has experienced a successful transition to become a highly desirable residential community.  But Hoboken’s success, as former Councilman and life-long resident Joe Della Fave said at a recent benefit for the Hoboken Fair Housing Association, has had an enormous human cost.  In the documentary Delivered Vacant, which was shown at the event where Joe spoke, there is a dramatic sequence where Hoboken tenants are shown riding on buses to Trenton and navigating the State Capitol’s bureaucracy to get eviction protection bills on the agenda.  The tenants’ activism of the early 1990’s left an important legacy of laws enacted at the state and local levels that still protect people caught in the middle of real estate speculation from losing their homes.

Locally, we are facing a critical situation.  Hoboken is the “hottest rental market in New Jersey” as a lawyer representing a group of the city’s landlords said at a recent forum on Hoboken’s Public Question Number 2, which is on the November 6th ballot.  That statement did not come as a surprise to anyone.  All one has to do is read the apartment listings on the local newspaper or on the windows of the many real estate offices in town.  At the same time, the landlords’ representatives blamed rent stabilization laws as the main reason why Hoboken landlords cannot afford to improve their properties.  In this case, casual observation and my experience as a member of Hoboken’s Rent Stabilization Board from 2001 until 2009 show just the opposite.  It is hard to convince anyone that rent control has kept landlords in Hoboken from upgrading their properties.  All you have to do is look around. 

The majority of cases I heard as a member of the Rent Stabilization Board involved an appeal from a landlord on a legal rent calculation that had been done by the City’s Rent Leveling Officer after a tenant’s request.  In most cases the landlord was ordered to roll back rents and refund overcharges.  What became apparent in many cases was thattenants had become aware of the rent control laws after the landlord had neglected a maintenance problem in the rental unit.  Unfamiliar or uncertain on how to file a complaint with the Building or Health departments, or sometimes frustrated due to their slow response, tenants found that the Rent Leveling Office could help them get their landlord’s attention.  So in these cases, landlords collected high rents without upgrading their properties, plus they did not maintain accurate rental records with the city, resulting in a finding of rent overcharge.  Sometimes the problems originated with a previous landlord, but it was clear that some landlords were happy to meet the demands of a primarily young and mobile tenant population that is willing to pay market rates for a short time or until things start breaking down.  The large turnover of tenants, and the displacement of others, has made Hoboken’s population highly transient.  Hoboken’s Postmaster stated a few years ago that our main post office handles over 18,000 pieces of forwarded mail per week, one of the highest rates in the country.

The statement from the lawyer for the landlord’s advocacy group that landlords have had difficulty getting capital improvement surcharges or hardship applications approved by the Rent Stabilization Board is simply not true.  In my 8 years on the board every single one of these cases received approval from the board.  Hardship applications, where the landlords must present evidence that they are not receiving a fair return on their investment, were particularly rare, probably because landlords are not willing to fully disclose their financial statements. I only remember hearing 2 or 3 hardship applications during my tenure.

After 18 months of hearings and a public referendum last year, the rent control ordinance was amended for the first time since 1993, when a 25% limit on vacancy decontrol after 3 years of tenancy was adopted.   One major change approved last year limits the amount of money that a tenant can recover after a finding of overpayment of rent.  Another change makes it easier for landlords to update rental histories on the city’s records.  Landlords have long complained about the Rent Stabilization Office’s record-keeping, particularly when properties were bought and sold, and have charged that the regulations have not been enforced consistently.  I would like to see the effects of these changes for a longer period of time before we continue to chip away at important tenant protections.

There is no question that the rent control ordinance needs more revisions to make it more relevant to today’s realities of population and marketplace.  For example, I think it would be fair to allow a percentage of the cost of capital improvements (not repairs) to become part of the base rent of a unit, instead of being collected as a rent surcharge and amortized through the expected life of the improvement.  I also find it silly for landlords to have to re-apply annually for tax and water and sewerage surcharges.  When was the last time we saw a significant reduction in these costs?  These are some of the negotiable points that would go a long way in reducing paperwork and establishing a base rent for the unit that is more in-line with actual costs.  I recognize that owners of large multi-unit properties use schemes to avoid local rent control regulations which affect mostly small landlords.  We must continue to seek a fair balance, but the recently approved Hoboken Affordable Housing Ordinance is an important step in distributing the costs of providing affordable housing more fairly amongst the city's property owners and developers.

The landlords’ advocacy group, Mile Square Taxpayers, emboldened by last year’s political victory, has continued the pressure to repeal rent control in Hoboken.  MSTA’s lawyer, lobbyist and many of its members who work in real estate have argued philosophically about property rights in a campaign of ads, blogs, letters, and a public forum.  I agree with Hoboken Fair Housing, the tenant group, in the belief that housing, as shelter and a basic life necessity, is a legitimate concern for government regulation in order to ensure the public good and bring balance to an inherently imbalanced relationship between landlord and tenant.  The societal benefits of a stable community cannot be overstated.  One could argue that one factor in the decrease in quality of Hoboken’s public schools is the more transient nature of Hoboken’s population in the last 30 years.  The feel, not just the look of the city’s neighborhoods has changed.  Today, outside of the newest luxury condominium enclaves where doormen and high-tech systems provide security at a high price, Hoboken’s most desirable areas to live are where most of the rent-stabilized units are located, in the tightly-knit neighborhoods where a diverse mix of parents and children, small-businesses, people who work from home and long-term residents, especially senior citizens, contribute to everyone’s safety by maintaining street life while some residents work outside Hoboken.  Tenants in the older buildings in these established neighborhoods are the most vulnerable to the change that is proposed on Hoboken Public Question #2, which would completely decontrol all units in buildings with 3 or fewer units, and would allow a re-establishment of market rent every time a tenant moves.  It is simplistic and unfair to portray all landlords as greedy speculators who would force their tenants out to realize bigger profits, but the changes proposed, if approved, would provide motivation to some who would cause great harm, especially to long-term residents. 

MSTA says in its website that their organization's mission is to be “involved in the laws, regulations and efforts that will determine Hoboken's future.”  I just fear that that future will be one of bedrooms for some at the expense of a community for all.

The language of Hoboken Public Question #2 is confusing, so please read carefully:  If you agree that stable rents preserve stable neighborhoods, please vote NO.