At a special meeting Monday, the Montclair Township Council didn’t introduce a new rent control ordinance — a measure that would replace a law approved by the council in April 2020, but never executed amid a legal fight with landlords. Nor did the council repeal that 2020 law. 

But it took a key step toward doing both.

With a unanimous vote, the council authorized a settlement with the members of the Montclair Property Owners Association who’d petitioned to force the 2020 rent control law to a referendum, and who were suing to invalidate a separate, temporary rent control freeze the council has reauthorized every three months since the early days of the coronavirus pandemic. 

If the association and tenant advocates hadn’t come to a deal at nearly the last minute last week — and if the landlords hadn’t pulled their petition by Friday, March 25 — the township clerk would have had to schedule a referendum for May.

Under the terms of that settlement, Montclair will have to repeal its 2020 law and adopt the new one, Councilman Peter Yacobellis said in a message sent to Montclair Local after the vote. At that point, the township hadn’t yet published the settlement or the negotiated ordinance, but Yacobellis posted a copy of the ordinance to his own website over the weekend. He said typos and “inconsequential components” could still be fixed, but no material changes would be allowed under the settlement.

He said he posted the ordinance — as well as an accompanying list of Frequently Asked Questions (FAQs) and answers — because “I believe it is critical that the public be able to see and understand what is in this law that we are now required to adopt per the agreement.”

The new ordinance would allow a one-time 6% increase for a property where rent hasn’t gone up since May 1, 2020, and where no tenant is over the age of 65. After that, rent increases are limited to 4% annually, or 2.5% for seniors. The 2020 version would have set the limits at 4.25%, or 2.5% for seniors, without the one-time allowance for a higher increase.

The new version allows increases after vacancies with no percentage limits, but no more often than once every five years. The 2020 law would have limited rent increases after vacancies to 10%.

And the new ordinance establishes rent control on buildings with two or three units, so long as they’re not owner-occupied — as well as all homes with four units or more. The 2020 version only applied to the buildings with at least four units. That expansion could nearly double the number of covered homes, officials have said — and is a provision that has some owners of smaller multi-unit properties protesting their property values will take a hit.

It puts in place registration requirements based on unit information, not personal tenant  information, something the landlords were against.  

Path toward a vote

Before the council can vote on the new ordinance, members will have to repeal the one passed in 2020. 

Mayor Sean Spiller had called for the special Monday meeting “for the limited purpose of authorizing the settlement the parties agreed to, repealing the current rent control ordinance, and introducing the new compromise ordinance,” according to a meeting announcement posted to the township website.

But at the meeting, Township Clerk Angelese Bermudez Nieves said the ordinance wasn’t yet posted to the township’s site because it would be a discussion-only item that day. The ordinance would be posted Tuesday, she said.

The special meeting was originally scheduled for Friday, March 25 at 11:45 p.m. — a late-night session township officials said was set to get a vote in under the wire before Friday ended, but giving enough time to advertise a meeting after the parties struck a deal on Wednesday, March 23. But because the landlords agreed to pull their petition Friday, that allowed more time for the Township Council to act.

For weeks, tenant advocates and landlords had been at the negotiating table, seeking a mutually agreeable ordinance before the Friday, March 25 deadline approached.  Both parties said they were not happy with the ordinance passed in 2020, which would have been the version sent to voters.

Toni Martin of the Tenants Organization of Montclair, which formed in 2019 to fight for rent stabilization, called into Monday’s special meeting to call the movement a “citizen-led action, a seat-of-the pants, slingshot sally against the goliaths of regional real estate.”

She recalled attending a community forum on rent control three years ago at Bullock School. “We were mostly just frustrated tenants, with no background in tenant law, or even community activism,” Martin said. It was at that meeting when she met William Scott and Deirdre Malloy, co-chairs of Montclair Township Housing Committee and veterans in the rent control fight. She also met resident AhavaFelicidad, who vowed to form a citizens group for rent control.

“Over the next three years, hundreds and hundreds of community members did the same. You know their names, because they came here to speak to you, wrote to you, called you, commanded your attention in every way possible because the problem of rising rents and lack of tenant rights was so urgent, urgent and growing ever worse,” Martin said. “Tonight we have a solution, and we have citizens to thank. … This was a citizen action, and you supported that all the way to the end.”

Tenant advocate Mitch Kahn, who had been negotiating on behalf of the Tenants Organization of Montclair for three years, said it should be the tenants, not the council, who should be credited with the newly crafted ordinance.

Montclair Property Owners Association Executive Director Ron Simoncini said that the new law would have the “least amount” of effect on property values, as well as prevent division between tenants and landlords in the future. 

“We wanted to provide protection for our long-term tenants. Tenants now have this protection,” Simoncini said.

The settlement, which township officials said will be made public once it’s executed by all parties, also includes a negotiated agreement on about $300,000 in court fees the landlords were seeking in court, attorney Charles Gormally, representing the petitioners, has said. The landlords agreed to take 40% of that amount — $120,000 — and split it between covering their legal costs and creating a fund for tenants who have experienced temporary setbacks and can’t pay the rent.

Legal history

Rent control in Montclair stalled for two years, when the petitioners sued Montclair after Nieves  rejected their petition twice — saying signatures submitted electronically didn’t match handwritten ones on voter rolls.

A Superior Court judge ultimately determined, and an appellate court agreed, Nieves should have reached out to signers to verify their intention. The court ordered her to certify the petition, which she did on March 9.

The council voted against repealing its 2020 ordinance March 15, starting a 10-day clock ticking until the clerk would have to schedule a May 10 special election.

Simoncini said the group will also withdraw its suit related to the rent freeze, which the township put in place citing special authority under New Jersey’s ongoing state of emergency. Against protests from the landlords, the council most recently voted on March 15 to extend that freeze to May 31 — enough time to keep the temporary measure in place until a rent control referendum might have taken place. The group and the township had been due to meet in court Monday, March 28.

Spiller credited the negotiators, saying that negotiations could “get challenging, contentious and what feels personal.” In the end, they came together to create a law that “puty the public at large first,” he said.

More provisions 

The new ordinance won’t cover newer construction. 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.

The same limits that apply to rate increases for housing will apply to parking rentals provided in conjunction with apartment rentals (but not parking provided by third parties).

There are exceptions for hardships incurred by property owners — when their expenses for a building exceed 65% of the gross income, when they conduct major capital improvements or when they add major additional services.

The ordinance creates a rent control officer position. It additionally creates a rent control board that would meet three times a year, to issue rent control rules compatible with the law, to provide information to tenants and landlords on compliance, to hold hearings on hardship exceptions and to hear appeals of the rent control officer’s decisions. The board’s decisions could be appealed to the Essex County Superior Court.

Read the ordinance below:

Rent control ordinance by Louis C. Hochman on Scribd