For more than a year, tenants and landlords have butted heads in Newark over rent control regulations. But should recently introduced amendments to the current ordinance successful passed into law by the Council, it would result in a more balanced ordinance for landlords as opposed to the current law. . The Newark Municipal Council was adopted the amendments on first readingduring its August 5th meeting and will hear public comment at its September 2nd meeting.. If passed, the amendments present a more reasonable rent control regulation for landlords, as the current ordinance has essentially frozen rents over the past 14 months.
Officials involved, however, believe that the ordinance would also protect tenants from unnecessarily extreme rent hikes while at the same time promoting reinvestment by landlords into their buildings. One councilman indicated that the overall goal is to strengthen the rights of tenants in Newark.
Originally passed in May 2014, the current ordinance officially took effect on June 20, 2014. The passing of the ordinance prompted the Newark Apartment Owners Association to challenge the law and request an immediate stay, thus making it unenforceable. While that lawsuit is still pending,, city officials started adjusting the law to address some of the constitutional issues pointed out by the NAOA, along with the economic impact of some of the ordinance's most onerous regulations.
Changes Lead to a More Balanced Law
According to the latest version, annual increases in rent-controlled properties would be dictated by the consumer price index, however, buildings with 8 units or fewer shall receive an increase of no less than 1% of the current rent in any 12 month period. Additionally, it would also give landlords a greater opportunity to raise rents after a tenant leaves, if improvements to the property are made.
The Newark Apartment Owners Association (NAOA) welcomed the changes, however, believe that the proposed amendments do not go far enough to give landlords sufficient relief from ever increases costs, such as insurance, maintenance and utlities. Derek Reed, legal counsel for the NAOA, was quoted in an article discussing the matter on NJ.com. He said, "It's certainly not everything owners wanted, it's certainly not everything tenants wanted, but I think it's a more balanced ordinance than what's currently on the books."
Three councilmembers sponsored the amended ordinance when it was first introduced, but have since withdrawn their names from the legislation due to various changes made by the city administration. One of the councilmembers pointed out that the proposed ordinance was meticulously prepared by the council and Newark mayor Ras Baraka. A public hearing to review the new ordinance will take place in September.