Some Clarifications on Hoboken Rent Control & Z-88
Categories: Hoboken Condos, Legal Matters, Neighborhoods
I read some interesting comments about the rent control issue on another Hoboken blog that was just filled with misinformation. Then someone posted a really nasty comment here today. Listen commentor (you know who you are), if you have to resort to name-calling, dirt slinging and blasphemous generalizations to make your arguments, I’m just gonna delete the comment. It’s my blog, duh! But I don’t have a problem addressing the substantive issues that were presented in it and some of those I read about.
Some Mistruths:
“The developers are out to rape tenants.” – False.
New construction is exempt from rent control. You know all those luxury high-rises at the Shipyard and 333 River built by Applied? Or 1000 Jeff? Or XXX Madison? Not covered. Large, luxury rental buildings built by the big developers in recent years are market rate. The landlord can charge whatever the market will bear.
“Small landlords and owners don’t have a problem with the rent control ordinance” – False.
Hoboken is one of, if not the only, city where single unit condominiums and two-family homes are covered by rent control. Small landlords have been trying to get this changed for decades. If you own a condo and don’t want to sell it because you will lose a great deal of money if you do, why shouldn’t you be able to rent it out at market rate? Even if it’s not your primary residence (because you had a baby and moved to a larger space), why does that unit fall under the ordinance?
“Buyers can find out the legal rents before they buy a property so it’s their fault if they didn’t bother.” – False.
Only the tenant or the current owner can file for a legal rent calculation. Not a buyer.
“Landlords are trying to get rich at the expense of tenants.” – Mostly False.
There may be some unscrupulous landlords out there as anyone can be dishonest. But tenants can be dishonest too. There are tenants who know they are being overcharged and, because there is no limit on how long they can wait to bring a claim against the landlord, they purposely wait as long as possible, in some cases years, so they can go for the treble damages on the “savings”. Pretty big windfall for the tenant, at the landlord’s expense, no?
“Rent control will save diversity in Hoboken.” – False
Is there any evidence of an empirical relationship between those who receive the benefits of rent control and diversity? Studies actually show that cities with rent control laws have higher overall rents than those without. Hoboken should be diverse. Hoboken has a huge amount of subsidized housing. The Hoboken Housing Authority Section 8 projects span Harrison St. from 2nd to 7th with hundreds of apartments for low income occupants. Church Square is a subsidized complex of multiple buildings with hundreds of apartments that are supposed to be for middle income occupants. Marine View Towers are two enormous high-rises of subsidized housing that are supposed to be for middle income occupants.
I’m doing this from memory so bear with me but, there is the entire block of Washington from Newark to 1st; the entire block on the east side of Washington from 12th to 13th (the Yellow Flats), the entire block of the west side of Washington from 12th to 13th; entire blocks on upper Bloomfield; lower Bloomfield, along the entire south side of Columbus park; on Hudson along 12th & 13th – there are simply too many to mention. These were mainly built by Applied with government backing and are supposed to be subsidized housing.
There is Fox Towers on Willow & 13th. There is the large senior building on 1st around Park. All subsidized. That is where the diversity might come from. But does the condo unit down the hall from you that the owners rented out because they couldn’t sell create diversity? Really? If there is a problem with people living in subsidized housing who shouldn’t be then address that problem. Rent control does not do that. These subsidized buildings and who gets the benefit of the below market rents in them is NOT determined by the rent control ordinance.
I happen to be a lawyer. I graduated in the top of my class, made law review, clerked for a Federal Judge, worked for one of the most elite Wall Street law firms and a Fortune 10 company. I also have an MBA in Finance. So I know a little about basic economics and the law. Basic legal principles govern a free market society in order that people have certainty in their dealings for that free market to flourish. That is why there is a limit on when a person can bring an action against another person or entity. It’s called a statute of limitations. The theory is twofold: the potentially aggrieved party has a reasonable time after discovering the harm to seek a remedy and the other party knows that after that given time period elapses the risk of liability and litigation, warranted or not, ends. Certainty in one’s dealings is a core tenet of a free-market. One cannot sleep on his rights. Here, the fact that without the new amendment a tenant can wait indefinitely to bring an action against a landlord flies in the face of this. What is to stop a tenant who knows he is being overcharged to wait to bring an action so that he can increase his (potentially threefold) recover on purpose? Is that fair to a landlord? The common law doctrines of laches, estoppel, and acquiescence all address these very inequities. Go ahead and google them if you want to know more.
As for the “too bad realtors can’t vote” statement made by the nasty poster, we live in Hoboken and have voted in every election for the past 12 years. I hope my peers will go to the polls and join me on Tuesday.
I’m voting “no”, as should you.
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Hoboken Election November 8 – Why you MUST VOTE NO on Z-88: the Hoboken Rent Control Referendum
Categories: For Buyers, For Sellers, Hoboken Condos, Legal Matters, Neighborhoods
“No” means “Yes” the way this referendum is written
Last year, the Hoboken & City Council unanimously enacted an amendment (Z-88) to Hoboken’s archaic rent control laws. A small group of tenant advocates accumulated enough signatures on a petition to suspend the new ordinance and have the issue voted on in this election. A “YES” vote means you want to kill the amendment. A “NO” vote means you want to keep the amendment. You should vote NO! Here is why:
“I live in a condo so I don’t care about any of this.”
Guess what folks, even if you live in a or own a single condo unit, if it was built before 1987 it is covered by rent control. Many of you bought at the height of the market and have outgrown your space. You would like to sell but would rather not take a big hit in a down market. You think, “I could rent and cover my costs while I wait for the market to come back”. What you can charge in rent depends on what the legal rent is for your unit. You can find that out by filing a short form and paying $10 at City Hall. Your condo unit may be covered by rent control. If it is, the way the old law works, you have the risk of huge liability. Much of it for stuff that seems incredibly unfair.
Some Hoboken Rent Control Basics
There is no means test in determining who can live in a rent-controlled apartment. The benefits of rent control can go to a billionaire. Income is not relevant. Assets are not relevant. Rent control in Hoboken has absolutely nothing to do with need. Nothing. We are not talking about subsidized housing. We are talking about your and your neighbors’ condo units and your ability to rent them out for fair market value.
Under the old law, your tenant can sue you and could recover triple damages.
Under the old rent control law, a tenant could live in an apartment for any amount of time – let’s say 20 years – with no problem. Then, on any given day after 20 years of peace and willingly paying the rent, the tenant can decide to bring an action against you for rent overcharges.
Under the old rent control law, a tenant can sue for overcharges going back to PRIOR to when you even owned the property!!! That’s right – you didn’t even own it yet, didn’t collect any of the rent, but you can be forced to pay the tenant for overcharges!
Under the old rent control law, it doesn’t matter what you “thought” the legal rent was when you bought the property. It doesn’t matter that a tenant moved out voluntarily and the landlord is entitled to a 25% increase every three years. If the proper vacancy decontrol papers were not filed with City Hall by the prior owners you will be held responsible. (Oh, and by the way, City Hall wouldn’t take those papers from owners in the past when owners tried to file them.)
Under the old rent control laws, it doesn’t matter if you have leases that prove that the tenants left voluntarily and the rent was raised up to 25% every three years - under the old law the rent control office won’t consider that evidence!
The New Ordinance Puts Reasonable Limits on a Landlord’s Liability while Still Protecting Tenants
The new ordinance puts a 2 year statute of limitations on the tenant. A tenant has 2 years to bring an action. If the claim is not brought withing the first two years, they are barred from bringing it at all.
Certain lawyers make their living by contacting tenants and telling them that they may have a suit against their landlord. These lawyers take the case for no fee – just a percentage of the judgment if the suit is successful.
A tenant could have agreed to pay an advertised, market-rate rent and enter into a lease with the owner. This tenant willingly signed a lease to pay the advertised rent. In fact, these days tenants are fighting to get apartments in Hoboken. There are bidding wars on rental apartments!
If your tenant is contacted by this lawyer, and it turns out that the rent the tenant willingly agreed to pay was over the legal limit you, Mr. Landlord, will have to pay to refund the overcharge going back to the beginning of time. You may have to pay THREE TIMES the difference between the legal rent and his current rent under consumer fraud laws. You will have to pay overcharges going back in time before he even lived there! What a windfall for the tenant! What a disaster for the property owner!
Landlords have been forced to declare bankruptcy because of exorbitant judgments issued against them. Where is the harm to the tenant who willingly agreed to pay the advertised rent? No one forced them to sign the lease.
The new law limits the landlord’s liability for overcharges of rent to the prior two years. Again, entirely fair and reasonable.
The new law allows a landlord to present evidence of legal increases without the actual vacancy decontrol forms (which didn’t even exist until recently).
The new amendment protects tenants by requiring that their landlord notify them upon signing a lease of their right to a legal rent calculation.
The new amendment protects tenants because it does not provide for ANY new rent increases.
The new amendment protects tenants because a judge can still require the landlord to pay triple damages when warranted by the circumstances.
The new amendments protect ALL Hoboken TAXPAYERS because poorly functioning rent control laws further burden single-family and condo owners with higher taxes. Rent control restricts income to rental buildings, so the owners of those buildings pay less in taxes than they would otherwise. There are many 10 unit rental buildings (which buildings are worth millions, by the way) whose owners pay less than $10,000 a year in property tax. Most 2 bedrooms condo owners in Hoboken pay more than that!
More Details on Hoboken Rent Control and How it Hurts Condo Owners
If you are really interested, you can read more about this issue here.
Or watch this video:
http://www.vimeo.com/31376166Or this one:
http://www.vimeo.com/31177377But please go out on November 8 and VOTE NO on Z-88.
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The Weekly Wednesday Wrap Up – Hoboken Condo Sales & Activity for the Week of March 23rd
Categories: Legal Matters, Weekly Wednesday Wrap Up
Hoboken Condos Sales & Activity – Week of March 23rd, 2011
There was an interesting meeting for realtors on the new Hoboken rent control ordinance held yesterday by the Mile Square Taxpayers Association and the Liberty Board of Realtors. I will post a full report tomorrow. The main points made were that the Hoboken property owner & taxpayer is being harmed by rent control in several ways:
- Rent control artificially keeps property values down thereby increasing the tax burden on all non-rent controlled property owners. As you all know, when you pull permits to make improvements to your property, the tax assessor comes around and increases your assessment and, thereby, your property taxes. Landlords whose rent is limited by rent control often won’t make improvements to their property. These buildings fall into a state of disrepair and pay very little property tax. The other Hoboken property owners must pick up the slack.
- Lately, many condo owners who have wanted to sell their unit but don’t because they will lose too much money have decided to move out and rent out their condo instead. It is not clear, however, how the base rent is calculated. What if the condo building was converted from a rental building years ago? Logic would dictate that the property no longer has the same tax lot and is not even the same legal entity as when it was a rental building, therefore the rents paid by those pre-conversion tenants years ago aren’t relevant. Rent control advocates would disagree. Can you imagine getting only $500 a month for your gut-renovated condo for which you paid almost half a million?
On the good news side – the new ordinance puts a 2 year limit on the amount of damages a tenant can win. Before, there were landlords who were being sued by tenants and were ordered to pay damages based on calculations going back 20 or 30 or more years. In many cases it was way longer than the tenant was even a tenant at the property. The damages were 3 times the rent over-charge plus attorney fees. Some landlords were forced into bankruptcy as a result. Now there is a limit.
There is also a requirement that landlords must notify tenants of their rights under the rent control ordinance. From the time of that notice the tenant has only 2 years to bring an action against the landlord. Existing tenants can be given notice to start the clock running. New tenants are to be given notice when they sign a lease. It used to be that tenants had lived in a place for years or even moved out of the property and could sue. That is no longer the case.
Importantly – the new amendments to the ordinance are not law yet. A small but vocal group of tenants are trying to get residents to sign on a petition. I was approached by a guy with a clip board just the other day on Washington St. He asked me if I would sign a petition to have the rent control amendments be voted on – seems unobjectionable, no? Well merely getting enough signatures will prevent them from going into effect. I refused to sign. Without the required number of signatures (and it is quite a small number needed) the amendments will go into effect automatically on April 8th.
A few other interesting facts:
- Rent control is not, and never has been, based on the tenant’s financial circumstances or need. (Mayor Koch notably lived in a rent controlled apartment in Manhattan.)
- Most new, luxury rental buildings in Hoboken are exempt from rent control. (1000 Jeff, The Shipyard, 333 River, etc.)
- Subsizided housing is not the same as rent control (i.e., Marine View Towers, Church Square, Applied Housing and the Section 8 Public Housing Projects on Jackson & Harrison).
- Our elected officials used to be swayed by the tenant majority in their position on rent control. Hoboken has changed and there are many more property owners in town due to the number of condos that have been built and converted in the past decade. Now these taxpayers have the power – if they make their voices heard.
Here is this week’s condo sales report:
Disclaimer: The data relating to real estate transactions on this web site comes in part from the Hudson County MLS. While some of these listings are, in fact, our listings they are not ALL our listings nor do we hold them out as such. Century 21 Listings are identified with “C21″ after the address. Other listings are from the MLS and are identified with “MLS” after the address. Information is deemed reliable but not guaranteed.
- 375 active Hoboken condo units – vs. 376 last week
- 17 DABOs (Deposit Accepted By Owner i.e. under contract) vs. 11 dabos last week
- 6 sold vs. 6 sold
- 33 new listings vs. 25
- 11 price reductions vs 21
- 7 expired listings vs. 11
Studio & 1 Bedroom Hoboken Condos:
9 new listing
3 Dabos
- 903 Willow (mls) listed on Mar 10 for $310k.
- 1015 Washington (mls) listed on Oct 27 for $215k; reduced on Dec 1 to $199k.
- 1125 Maxwell (mls) listed on Feb 2 ‘10 for $566k; reduced on Mar 17 to $555k; Oct 17 to $540k.
5 Sold
- 535 Bloom (mls) listed on Jul 12 for $325k; reduced on Sep 8 to $310k; Sep 29 to $300k; Nov 18 to $285k; sold for $265k.
- 309 Monroe (mls) listed on Sep 1 for #232k; sold for $223k.
- 608 Mad (mls) listed on Jan 14 for $275k; sold for $272k.
- 419 Adams (mls) listed on Jan 4 for $310k; sold for $265k.
- 1106 Wash (mls) listed on Jan 11 for $300k; sold for $305k.
7 price reductions
142 Total Active 1BRs
Two Bedroom Hoboken Condos:
22 new listings
11 Dabos
- 226 Park (mls) listed on Dec 4 for $595k.
- 659 1st (mls) listed on Oct 12 for $550k; reduced on Nov 12 to $530k.
- 121 Willow (mls) listed on Feb 9 for $375k; reduced on Mar 10 to $359k.
- 800 Jackson (mls) listed on Mar 11 for $573k.
- 700 1st (mls) listed on Mar 3 for $575k; reduced on Jun 2 to $525k.
- 1125 Maxwell (mls) listed on Jun 13 for 1.036mil.
- 108 Jackson (mls) listed on Jan 20 for $499k; reduced on Mar 6 to $487k.
- 1500 Wash (mls) listed on Mar 4 for $550k; price INCREASED on Mar 9 to $575k.
- 703 Adams (mls) listed on Feb 15 for $629k; reduced on Feb 15 to $609k.
- 806 Wash (mls) listed on Feb 20 for $425k.
- 264 5th (mls) listed on Jan 4 for $799k; reduced on Feb 3 to $769k.
5 sold
- 601 Monroe (mls) listed on Dec 2 for $328k; sold for $315k.
- 800 Jackson (mls) listed on Feb 28 for $564k; sold for $530k.
- 331 Adams (mls) listed on Nov 3 for $425k; sold for $400k.
- 84 Jeff (mls) listed on Oct 8 for $669k; sold for $650k.
- 727 Monroe (mls) listed on Nov 8 for $549k; reduced on Nov 29 to $529k; sold for $495k.
11 price reductions
194 Total Active 2BRs
Three Bedroom and Larger Hoboken Condos:
2 new listings
3 Dabos
- 226 Park (mls) listed on Dec 10 for $645k.
- 1500 Wash (mls) listed on Nov 5 for $899k; reduced on Oct 27 to $875; on Nov. 12 $850k; on Dec 14 to $825k.
- 800 Jackson (mls) listed on Mar 18 for $592k.
1 Sold
- 112 Mad (mls) listed on Jan 18 for $599k; sold for $589k.
1 price reduction
37 Total Active 3BRs
Hoboken Condo Open Houses
Want to Receive New Listings & Price Reductions Daily?
If you would like to be emailed the new listings and price reductions each weekday in either 1br, 2br or 3br categories just email us at info@hobokensbest.com letting us know which size(s) you would like and we’ll add you to the daily email list.
For more information you can always contact us at 201 993 9500.
Thanks for reading and, as always, we welcome your comments!
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