Hoboken Housing Improvement Initiative Questions
Q: What is rent control?
A: Rent control in New Jersey was adopted during wage and price controls during the Nixon Administration and was designed to prevent renters from undue rent increases for apartments they already occupy. Hoboken limits annual increases on rental apartments to the Consumer Price Index movement, which has been between 0 and 2% annually for 15 years. Management, fuel and insurance costs have increased 100-200% in that time. Rent control was not intended to be a permanent mechanism and many New Jersey towns have abolished it. The Amendment seeks a moderate form of vacancy decontrol, which eases the negative impacts of rent control but provides permanent protections for existing tenants.
Q: What legal changes will occur if the Hoboken Housing Improvement Initiative Amendment passes?
A: For existing tenants, there will be no change. For new tenants, instead of rents being determined based on what the former resident paid, the property owner and the new tenant will agree on an initial rent. After a new resident signs their initial lease, increases in rent for buildings with 5 units or more will be limited annually by the City Council as they are for existing residents. For buildings with 4 or fewer units, typically owned by small homeowners who are not professional real estate investors, rents will be permanently decontrolled. Due to the difficulty of complying with registration and other requirements under Hoboken’s dysfunctional rent control regime, many of these smaller buildings convert to condominium, removing rental housing from the market. The Amendment anticipates preserving more rental apartments as a result of easing restrictions.
Q: How does the Amendment differ from Bayonne’s recent adoption of vacancy decontrol?
A: Bayonne permanently decontrolled its housing stock, meaning that upon a vacancy the apartment will be decontrolled and rents will adjust with the market. The Amendment seeks so-called Decontrol/Recontrol, which allows the property owner and tenant to agree upon an initial rent, and then increases will be set as they are now, by the City Council.
Q: How many tenants will be displaced as a result of the Amendment?
A: Zero. There is no change to any eviction law and the Amendment expressly protects existing tenants as they are under the current rent-leveling ordinance.
Q: If this Amendment is passed will it end rent control in Hoboken?
A: The Amendment does not change conditions for any existing tenants in Hoboken. For new tenants in rent controlled buildings of 5 units or greater – approximately 5000 households – annual rent increases will be set exactly as they are now. The rent leveling office and the rent leveling board will continue to operate as they do now.
Q: Why are some apartments rent controlled and others are not?
A: In 1988 the Legislature passed a Statue exempting new construction apartments from rent control. More than 8000 such units have been constructed in Hoboken in that time with more under construction.
Q: How has condominium conversion effected rent control?
A: Rent control encourages condominium conversation because apartment owners cannot meet expenses with rental income. In 1983 Hoboken had 20,000 rent controlled apartments and it now has fewer than 8,000. The Amendment benefits condominium owners, who currently remain would be restricted to the most recent rent controlled rent if they decided to rent out their apartments. In most cases of condominium conversion, condo owners would receive between $500 and $1000 in monthly rent despite having to pay property taxes of $10,000 or more per year.
Q: What are the benefits of vacancy decontrol?
A: The most immediate benefit will be improvements to the housing stock. Older apartments whose rents are constrained to 1980s and 1990s levels are in decay and do not generate enough revenue to pay for the renovations needed to bring electric, plumbing and appliances up to date. These improvements are typically made building-wide, so when new windows are installed, the existing rent controlled tenants enjoy the benefits that are being paid for by the new rent controlled residents. The increased rents paid by new residents for the improved properties will lead to higher property values and increased property tax revenues for the City. Rental apartment properties pay a disproportionately low share of the property tax burden due to rent control limiting revenues. This burden is shifted to the single-family and condominium owners.
Q: Will the Amendment eliminate opportunities for low-income residents?
A: Hoboken will continue to offer a higher percentage of public and subsidized housing than any other city in New Jersey – none of those apartments are rent controlled. Rent controlled apartments are not designated for low income residents – there is no so called “means test” as there is for public and subsidized housing.
Q: Will owners harass or otherwise coerce tenants now that they have the motivation to gain a vacancy decontrol?
A: Apartment owners can increase rents through vacancy decontrol every three years by 25%. There is no reported incidence of coercion or harassment to create vacancy although the motivation currently exists. There are no credible reports of incidents of harassment in other towns where vacancy decontrol is enacted or rent control is abolished, including Belleville, Bayonne, Morristown and Lodi.
Q: If the Amendment passes, won’t apartment owners immediately evict tenants in 1-4 unit building to get permanent decontrol?
A: Even without the Amendment, State eviction law allows only owner-occupied buildings with 2 or 3 units to evict tenants without cause. These units represent a small fraction of the housing stock. In Hoboken, every such property owner could legally evict residents and increase rents 25% every three years, and yet there have been no reports of such an eviction pattern. It is highly unlikely that the Amendment would compel owners to decontrol units, especially when most of them cannot bear 25% price increases without exceeding fair market prices.
Gina Denardo describes her rent control disaster: Watch Video
Fritz Haas describes his rent control disaster: Watch Video
Joe Murray writes about his rent control disaster: Read Story
Rent Control Debate: 
Referendum History: 
Components for Rent Control Amendments: 
Why Vote No Commercial: