New Jersey Rent Control Laws
TRENTON — Rents, like seemingly everything else, have been skyrocketing lately in New Jersey.
The Rent.com June 2022 Monthly Report released Wednesday shows the average rent in the state has risen 36% over the past year to $2,414 per month for a one-bedroom apartment and 42% to $2,981 for an apartment of two bedrooms. Both are about 3% larger than reported a month earlier.
Jersey City has seen one of the biggest jumps in the country, up nearly 49% for a one-bedroom apartment over the past year to $4,291 and 45% for a two-bedroom apartment to 5 $752.
Skyrocketing costs beg the question: does New Jersey control rents?
The short answer is no. Oregon is the only state with a statewide rent control law.
But the long answer is that it depends on where you live, because New Jersey has about 100 municipalities with local rent control ordinanceswhich one to Urban Institute said accounts for more than half of such laws in the country.
“Probably 50% of renters in the state of New Jersey are covered by rent control, because most of the hundred plus cities that have rent control are in the northern part of the state”, where the populations are generally larger, said Mitch Kahn, vice president of the New Jersey Tenants Organization.
These ordinances vary and you will want to check with the town hall or borough for details.
How does rent control work?
Kahn said there are three things to consider: Does it cover all rental housing or does it exempt small buildings, such as those with fewer than four apartments? Does it allow the removal of vacancy control? And what increase is allowed each year?
Allowable increases vary by city, with some places saying 3% or 4% and others tying it to the annual inflation rate. But Kahn said many cities that rely on the CPI also have a peak increase.
“They would say, like, the consumer price index or 5%, whichever is lower,” Kahn said. “So in a lot of these cities that have rent control, landlords won’t be able to get an 8% rent increase.”
What is vacancy removal?
The vast majority of rent control ordinances have vacancy control – allowing landlords to increase rent beyond the ordinary increase, in some cases until the market can bear, when a tenant leaves . Kahn said the change undermined affordability.
“I would say vacancy decontrol has basically killed rent control in the state of New Jersey and elsewhere,” Kahn said.
Pushing for rent control in New Jersey
Kahn said the rent control movement exploded in the early 1980s, and few more municipalities anywhere in the country had added such laws for decades.
Interest has begun to stir as the long-standing challenge of housing affordability has pinched middle and upper-middle-class families. Adding to that was the COVID pandemic, as city dwellers began gobbling up homes and apartments in the suburbs, driving people out and driving up rents.
Kahn said he sees interest in rent control “reawakened” in the state.
“In New Jersey, where it’s happening is in these towns that are going through some form of gentrification — like Montclair, like Asbury Park,” he said.
Plainfield could be next, Kahn said.
Can rent increases be challenged in New Jersey?
Even in municipalities that don’t have rent controls, tenants still have recourse to fight rent increases.
If the increase is “ineligible,” they can tell the landlord they refuse to pay it, offer a compromise alternative, and pay that lower rate. The landlord could choose to accept this – or go to court to ask a judge to evict the tenant.
But Kahn said the risk is that there is no set definition and that a decision depends on the opinion of the judge hearing the case.
“Until this last inflationary spike, the inequity standard was usually 10%, maybe a little higher if the landlord hadn’t raised the rent in 10 or 12 years or whatever,” Kahn said. “But now, who knows what it is?”
Michael Symons is the Statehouse Bureau Chief for New Jersey 101.5. You can reach him at [email protected]
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