As Montclair’s rent control extends to two- and three-unit properties, owners worry about impact
By JAIMIE JULIA WINTERS
The rent control ordinance the Montclair Township Council passed in April 2020 — and the one set to go to referendum if landlords and tenant advocates hadn’t struck a deal on a replacement last week — would have only applied to multi-family buildings of four or more units.
But the newly crafted ordinance, expected to be introduced by the council on April 5, goes further and includes two- and three-unit buildings, other than owner-occupied buildings — and some landlords of those smaller buildings are not happy about it.
Two landlords of such buildings — Eric Broms and Carmel Loughman — called into a March 28 special meeting in which the council authorized a settlement with a landlords group that had petitioned to force the 2020 ordinance to a referendum, and that was suing the township to invalidate a separate, temporary rent freeze first put in place early in the coronavirus pandemic. The settlement requires the township to adopt the newly negotiated ordinance, which also sets rent increase limits at 4% annually, and 2.5% for seniors. Landlords will also get to raise rents up to 6% a single time.
Broms and Loughman said the smaller landlords did not have a seat at the negotiating table, and their unique needs as small landlords were never represented. And Broms vowed to fight it.
“Vote it down and give these [two- and three-unit] property owners a chance for their say,” Broms told the council. “We don’t have the deep pockets some of these large investors have that can just shell out a million bucks. But I tell you, you can look at a million bucks two ways — as one lump sum or 100 million pennies. Us property owners will be able to get together 100 million pennies. I can promise you, we will fight this.”
But Councilman Peter Yacobellis, who advocated for inclusion of two- and three-unit buildings, said he saw it as a more inclusionary option.
About 1,400 buildings in town have two or three units each, according to figures provided by Councilman David Cummings last year. Mitch Kahn, a tenant advocate who helped negotiate the new ordinance, said he doesn’t know how many of those would be owner occupied and exempt from the ordinance.
Yacobellis has previously said he expects the new ordinance would nearly double the number of renters who would be covered in Montclair. According to the Census Bureau’s American Community Survey for 2020 — the most recent year for which figures were available — there are an estimated 5,501 renter-occupied units in the township.
Loughman, who has owned and occupied a three-family home in Montclair for 17 years, told Montclair Local she is against the ordinance, even though her building would not be subject to rent increase limits.
She said she’s concerned with new regulations for multi-family buildings that set registration and inspection guidelines, maintained by a future rent control officer and rent leveling board.
“[For the past 17 years] I haven't had to register or have my home inspected,” Loughman told Montclair Local.
She told the council on March 28 that it was a privacy issue to require her, as a landlord, to submit her records and tax returns in order to register her home. Yacobellis said that tax records should only be required when a landlord pursues an exemption due to hardship or capital improvements, but said that the yet-to-be-appointed board would establish procedures.
“The council did no analysis, data collection or research to study the effects of rent control on a town over the long term. There are many studies on this topic, and the consensus among economists is that it is not good for a town,” Loughman said.
While Loughman accused the council of ceding the development of the ordinance to two special interest groups — the Tenants Organization of Montclair and the Montclair Property Owners Association landlord group — Brom went further, saying that “a deal was negotiated on their [two- and three-family property owners’] part by essentially a dark group.”
Brom said the two- and three-family property owners are the “moms and pops” of Montclair.
“They saw it as a great investment in the future. They believed in the town. Now what you are doing is affecting their ability to adjust rents as they see fit,” he said, adding that the small property owners are landlords who know their tenants personally, and raised rents nominaly to keep them as tenants.
With the new ordinance, landlords would be able to increase rents upon vacancies with no percentage limits, but only once every five years. The 2020 ordinance limited vacancy increase to 10%.
Montclair Housing Commission Chairman and small landlord William Scott said that it was untrue that the smaller landlords were not represented, as he himself has been part of the process.
“I am a small landlord in the Township of Montclair. I have been at the negotiating table from the beginning to the end of the situation. I am proud that my small building will now be covered by the new rent control ordinance and I can play my part in protecting Montclair tenants,” Scott said.
The ordinance would not limit increases for tenants living in newer buildings. New Jersey since 2008 has prohibited rent control on new buildings for 30 years after the date construction is completed or until after an initial mortgage is amortized, whichever comes first.
In Montclair that pertains to 820 units, and includes Montclair Residences, Valley & Bloom, Montclairian II, Vestry, Westly, 2 South Willow and the Sienna, according to Scott.
Rent control limits would also not apply to the approximate 750 affordable units in Montclair, which fall under state guidelines, Scott said.
He estimates that 60% of Montclair renters would be covered under the new rent stabilization.