Landlords plead: End Montclair’s rent freeze
CHRIS ROBERT VIA UNSPLASH
By JAIMIE JULIA WINTERS
Montclair landlords are urging the township to end its rent increase freeze, as New Jersey’s public health emergency for the coronavirus pandemic was lifted in June, and property owners are dealing with increased costs.
However, the rent freeze is legally authorized under a separate state of emergency Gov. Phil Murphy declared at the same time as the public health emergency in March of 2020. The state of emergency remains in effect.
The township is expected Wednesday night to extend the moratorium, which has been in place for a year and a half during the pandemic. It must be extended every three months to remain in effect.
Two landlords and the Montclair Property Owners Association’s attorney called in to a Sept. 21 Township council meeting, pleading with the council not to extend the moratorium again, citing rising costs and long-term effects on the market.
“Landlords have to pay increased wages for the people who work for them, increased prices for goods, increased prices for tax, increased price for compliance,” Ron Simoncini, a landlord and executive director of the association said. “All of these costs are increasing and when you freeze the rent, you are depriving that owner the opportunity to recover what’s happening in the rest of the economy. If the cost of having cows goes up, then the cost of milk goes up.”
With the cost of housing going up, Simoncini and fellow landlord Bruce Sideman said, delivering a quality product will be hard due to the lack of rent increases over the past year and a half. Property owner taxes increased a little over 2% this year, as well.
Sideman said that with some tenants’ wages increasing as much as 25%, the rent freeze should not be extended another three months.
“If it was based on need, I believe we could get around that. But it’s blanket,” Sideman said, adding that he and other landlords have been working with tenants who have experienced economic hardships during the pandemic.
“I know everyone is trying to do the right thing, but you really need to think about the property owners a little bit. I know that’s difficult because it’s easy to kind of hate landlords. But enough is enough. Landlords have done an outstanding job of keeping everyone in their apartments,” Sideman said.
Attorney Charles Gormally of Brach Eichler LLC, representing the association, said the property owners have complied with the rent increase moratorium and not opposed it before because “the sentiment of the group, especially in the first year of the pandemic, was there was no need to look at raising rents. But now we have an end to the public health emergency and yet the municipality is once again going to extend the rent freeze.”
He contended that extending the rent freeze will have a permanent effect on the value of rental properties in Montclair that will never be recovered.
The Township Council is set to vote on the extension on Wednesday, Sept. 29. The moratorium, put into place on May, 1, 2020, has been extended five times. Another extension would have it go to Dec. 31.
According to Montclair’s ordinance putting the rent moratorium into effect, the township is authorized to extend it so long as the state of emergency remains in effect after June 30.
In June, Murphy lifted the related public health emergency he'd declared at the same time — scaling back some of the special powers he had in the pandemic, but retaining others through the end of the year under a deal with lawmakers. That action didn’t affect the state of emergency declaration.
Ahava Felicidad, president of the Tenants Organization of Montclair, said that the public health emergency may be over, but the pandemic is not.
“It goes beyond a paper directive. Just because the emergency has been lifted does not mean everything has healed. There are still people not leaving their homes,” she said. “This [moratorium] is right-headed, caring and compassionate, and as far as I know there are no cows in Montclair.”
Simoncini accused the council of playing politics by favoring one group — renters.
“You are taking property from one person and giving it to another. That’s just wrong-headed. As you are looking at who needs help, here is one of those groups that needs help, a group called property owners,” Simoncini said.
Felicidad told the council that even with the rent freeze there were some “unscrupulous” landlords raising rents.
Township Attorney Ira Karasick said he has fielded some calls from landlords about the rent freeze, but said those landlords comply once they know the freeze is in effect.
“There have been no legal challenges to the rent freeze and I haven’t had complaints lately,” he said.
At an Essex County forum on landlords’ and tenants’ rights held in July, attorney Lindsey Baretz reminded attendees that landlords have not had assistance in mortgage payments or water bills during the pandemic. And, she said, landlords have a right to a reasonable rate of return on their investment.
Neighboring city East Orange’s moratorium on rent increases ran through June 30.
Montclair’s housing stock consists of 41% rentals, according to Census estimates. According to an analysis by QuoteWizard in September, 25% of renters in New Jersey worry they will lose their housing by the end of the year, and 18% of them are behind on rent.
Councilman Peter Yacobellis said last week that he agrees that the moratorium should be extended to Dec. 31, but said he will not vote to do so after that date. He pointed to the current rate of inflation at 5.3% — up from 1.4% last year — which reflects overall increase in prices or the increase in the cost of living.
“That’s crazy and has to be considered,” he said, adding that a rent freeze is not a substitute for an affordable housing strategy or government investment in affordable housing. “If economic conditions continue to improve, this will be the last time that I [vote for the rent moratorium] in response to this particular crisis. With schools open full time, vaccines widely available and a robust job market, I think we have to sunset this freeze at the end of this year, particularly in light of us having raised property taxes in 2021 and the likelihood we'll do it again in 2022. To be clear, we have an affordability crisis in Montclair.”
In April 2020, the township passed a rent control ordinance limiting rent increases to 4.25%, and to 2.5% for seniors, with some exceptions — but it never went into effect, tied up in litigation ever since.
On Friday, Sept. 17, a group of landlords and Karasick were back in court. Karasick was asking an appellate division judge to rule against an Essex County Superior Court’s previous ruling that would have forced Montclair to either put the issue of rent control before the voters in a special election, or to repeal the ordinance altogether. Karasick said that decision could take weeks.