Home Events + News Hoboken City Council Votes Down Rent Control Proposal

Hoboken City Council Votes Down Rent Control Proposal

by Erin Lanahan
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A proposal to change how rent-controlled apartments in Hoboken are priced after a long-term tenant vacates will go to voters as a referendum after a ‘compromise’ proposal was defeated by the Hoboken City Council. The Hoboken City Council has approved a proposal described as a compromise between maintaining the status quo on the issue and a referendum going to voters in November. The referendum effort is being led by the Mile Square Taxpayers Association, which spearheaded a similar effort in 2023. The City Council hosted a virtual meeting on August 5th, 2024, to discuss the issue. Read on for more about this topic and what’s next.

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The Referendum

The idea of resetting rates of rent-controlled apartments was the subject of a similar legislative effort in spring 2023. While non-rent-controlled apartment rates are generally in step with the market, rent-controlled apartment rates are subject to more regulation, and depending on the length of the previous tenancy, could be restricted by the date at which the tenant signed their lease.

The Mile Square Taxpayers Association (MSTA), a citizen advocacy group, had been a vocal supporter of the proposal.

Vacancy decontrol is a circumstance when a tenant of three years or more vacates the rent-controlled apartment, the landlord gets a one-time chance to bring the rent up to market value, capped at a 25% increase. In early 2023, a proposal was made to change the provision from a one-time increase capped at 25%, limited to the expiration of a tenancy of three years or more to a one-time increase of 10%, limited to tenancies of five or more years.

After a 5-4 vote, the Council voted to have the rent be calculated based on the last rent paid, rather than the October 1st, 1985 rent as stated in the statute. Regardless, Hoboken Mayor Ravi S. Bhalla vetoed the policy, saying that the idea of leveling out the rents for tenants and landlords makes sense, he didn’t think the mechanics of this particular plan were the way to go about it.

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The MSTA vowed to keep working on the issue.

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The Proposal

As promised, the MSTA introduced the topic again. The referendum was introduced by the Mile Square Taxpayers Association (MSTA) at the March 6th, 2024 City Council Meeting, per TapInto Hoboken. The core issue proposed was the same as what was proposed in 2023: allowing all rent-controlled units to go for market rate if vacant if the landlord pays a one-time fee of $2,500 to the Hoboken Affordable Housing Trust Fund.

The group would have to get the requisite number of signatures to put the question to voters. In May 2024, the Hoboken City Clerk’s Office declined the petition, saying that it didn’t have the required number of signatures, according to the Hudson County View.

The question of the referendum, per the petition, was:

“Should Chapter 155-31 of the Ordinances of the City of Hoboken, Rent Control Ordinance (“RCO”) be amended to provide an option to landlords to pay a fee of $2500 to the Hoboken Affordable Housing Trust Fund in order to lease voluntarily vacated apartments at a freely negotiated rent, which thereafter remain subject to the provisions of the (“RCO”) including limitations on annual rent increases.”

The petition was certified in July 2024. The petition’s certification meant that City leaders must find a solution to the issue, or the referendum will go forward. The compromise proposal put forth by the Council embodied the same principles as the referendum. The Hoboken City Council held a special meeting on July 24th to discuss a proposal incorporating some of the concepts put forth by the MSTA.

This proposal would require landlords looking to increase rent on a previously rent-controlled unit to notify the City and pay a fee of $100 for currently registered units or $3,500 for unregistered units. Once a landlord opts into this program, they would be permitted a certain percentage increase depending on how long the previous tenant occupied the unit.

For example, if a tenant rented a unit for two years or more, the landlord would be permitted to increase rent by 25% and pay a $500 fee. If a unit was occupied by the same tenant for five years or more, a 50% rent increase would be permitted with a $1,000 fee. A 100% rent increase would only be permitted if a tenant had lived in the unit for 10 years or more, and the landlord would have to pay a fee of $2,000. This would only apply to vacant rentals.

The compromise proposal was unanimously passed on the first reading by the City Council in late July. If it passed on a second reading, Hoboken Mayor Rhavi Bhalla would have had the option to sign it into law or veto the ordinance.

Since the ordinance did not pass, the MSTA referendum will go to voters in November.

 

 

What People Are Saying

The Hoboken Girl spoke with Hoboken tenant advocate Cheryl Fallick about her concerns with the proposed changes. “All the tenants, a lot of renter groups…all of us oppose the MSTA initiative, but we also oppose the council compromise. From my perspective, with a couple of different hoops that are easy to slide through, the council compromise will jack up the rents just as much,” she said.

Cheryl continued, “It’s a lot of tenants saying no, no, we will fight this. So our army is amassed. We’re ready to go. We wish we didn’t have to but here we are.”

Mayor Bhalla tweeted a month ago, “Make no mistake about it, the Mile Square Tax Association and their wealthy lobbyists are cynically attempting to gut rent control protections and target residents who depend on fair rents, and if this is on the ballot – I am confident it will be rejected.”

MSTA Executive Director Ron Simoncini told The Hoboken Girl the goal is to help landlords with increasing costs due to inflation and rising taxes. “How is it possible that the city will recognize it’s need to increase revenues to cover increased costs, but won’t allow the landlords to increase their revenues to cover their increased costs?” Ron said.

Plus, Ron shut down the notion that the changes would lead to landlords pushing long-time residents out of their apartments. “Hoboken is not unique to the notion that property owners like to create vacancies. However, the idea that they would break the law to do it, I find very suspect,” Ron said. “I don’t think anybody wants to risk a jail term so they can increase some tenants’ rent by a couple hundred dollars a month.”

Phil Cohen, Hoboken Councilman for Ward 5, shared via his constituent newsletter that resident participation would be crucial in impacting the outcoming of the August 5th meeting. In particular, he said that the expedited time frame in which the Council has created and proposed the compromise is a serious issue.  He wrote: “The compressed time frame imposed on the City Council has made it difficult to have reasoned and thoughtful debate and discussion about these proposals — and as a result, a lot of fear and overbroad talking points have replaced what would preferably be a more rational, thoughtful legislative process addressing extremely important issues at a time when rent pressures on Hoboken tenants are extraordinary.”

Hoboken Mayor Ravi S. Bhalla issued the following statement in advance of the meeting.  A selection is below, please click here for the full text. 

“I am unequivocally opposed to the amendment to Hoboken’s rent control ordinance being considered by the City Council at its virtual special meeting tonight.

In arriving at this position, I have listened to the input of a diverse group of stakeholders: tenants, landlords, elected officials, and other concerned residents. Simply put, I am opposed to this amendment because it would severely diminish our stock of rent stabilized units in the City of Hoboken.

I also understand that this amendment has been characterized as a “compromise” amendment in lieu of a potential referendum question this November. There is broad consensus that the potential referendum is a more severe attack on rent control. The logic I have heard is that if this “compromise” passes then the more severe referendum question will be withdrawn, but if this “compromise” does not pass, and the referendum does pass, the end result will be worse for tenants.  Therefore, rather than risking a worse outcome, it is better to “compromise” by passing an amendment that avoids a worse outcome from a referendum vote in favor of landlords.”

HG reached out to other members of Hoboken City Council about the possible changes and will update this piece when we hear back.

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What’s Next

After four hours of comment and discussion, the proposal was voted down by the Council, with a vote of 9-0.  Per Patch Hoboken, speakers each had three minutes to make their arguments, which raised various issues about the proposal’s impact on rents overall in Hoboken. While the City Council defeated the proposal, the issue will still go to a referendum vote in November.

Hoboken Mayor Ravi S. Bhalla issued the following statement:

“I’m pleased that the City Council rejected the corporate landlord/lobbyist favored ordinance that if adopted, would have been a devastating blow to rent control in Hoboken. The bullying and deception campaign waged by the Mile Square Tax Association leading up to the vote failed to conceal their true agenda: maximizing corporate profits to the detriment of tenants. They weren’t fooling anyone, and I thank the many residents who forcefully made their voices heard at last night’s meeting. If an even more severe referendum question comes to the ballot, I am fully confident that it too will be defeated, this time by voters at the ballot box.”

On August 21st, Hoboken City Council adopted a resolution approving a new, transparent interpretive statement to be placed on the ballot for the November referendum on rent control. Mayor Ravi S. Bhalla shared the following statement:

“I commend the City Council for taking a stand and adopting a transparent interpretive statement for the upcoming rent control referendum. This action is essential to ensure that Hoboken voters are not deceived by the original statement, which was crafted by corporate landlords and lobbyists with a blatant intent to mislead and misinform. With this new statement, we are ensuring that residents can make informed decisions based on facts, and not self-serving misinformation from those who will realize massive profits from the abolishment of rent control.”

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