Attorney Derek Reed of Ehrlich, Petriello, Gudin & Plaza quoted in a recent article Rent Control Fight in Newark is Not Over

For a renter, it is considered desirable to find a property that is governed by the laws of rent control. Rent control restricts the changes that can be made to the price and guidelines of renting the property to keep the grounds between landlords and tenants peaceful and ensure that no one is getting pushed out of their rented property in favor of higher paying renters. In a city such as Newark, rent control has been an extremely contentious issue. Less than a year ago, the Newark city council made sweeping changes to current rent control laws. Now local legislators are seeking to re-write these new guidelines.

What is wrong with Newark's rent-control laws?

In May 2014, newly passed laws made it more difficult for Newark landlords to raise rents on their tenants. Mayor Ras Baraka sought to change the law later on in 2014, and more legislators have jumped on board to make additional changes. The end goal of these regulations is to allow Newark residents to remain in their homes and neighborhoods instead of being forced to move to cheaper areas.

Two considerations of the legislation that have been hotly debated include:

  • Capping automatic annual rent increases to the consumer price index, which can be less than 2%, instead of the 4% to 5% that was previously allowed; and
  • How much and when a landlord can increase the rent on vacant apartments that have been rehabilitated.

Some of the proposed legislation will work to address these concerns. The consumer price index will be clarified while keeping a cap on the increases and redefining what counts as a renovation or improvement on an apartment, changing the financial amount that indicates a significant alteration.

According to some that are against the legislation, these rules will discourage landlords from improving their buildings, driving tenants away from Newark and hurting the overall economy. In fact, one research group estimates that these regulations will result in $25.2 million in losses each year in apartment improvements and cost 400 individual their jobs. The Newark Apartment Owners Association filed a lawsuit in 2014 stating that the legislation was unconstitutional and unfairly affected landlords.

Attorney Derek Reed of Ehrlich, Petriello, Gudin, Plaza & Reed, Attorneys at Law – who is representing the Newark Apartment Owners Association – was quoted in a recent article on the issue. He said:

“I still think that the council is missing the mark as far as how to address the devastating financial impacts. How can we work towards softening that impact and still accomplish the goals I know the council is looking to accomplish?”

Click here to read the full article.

Are you a landowner and wondering how you will be affected by the updated legislation? Contact Ehrlich, Petriello, Gudin, Plaza & Reed, Attorneys at Law to learn what Newark's new rules may mean for you.