New Jersey city eliminates $20 limit on rent increases

Elizabeth admits cap was outdated, but keeps 3% maximum

Elizabeth mayor J. Christian Bollwage (Illustration by The Real Deal with Getty, City of Elizabeth)
Elizabeth mayor J. Christian Bollwage (Illustration by The Real Deal with Getty, City of Elizabeth)

New York landlords who feel handcuffed by rent stabilization probably have no idea what landlords in Elizabeth, New Jersey, have been dealing with.

Last week, the city council there voted to eliminate a policy capped annual rent increases at $20, reported.

Under the policy, landlords could only raise rents by either a crisp Andrew Jackson or 3 percent, whichever was less (almost always the Jackson).

While the $20 rent control measure is becoming a thing of the past, the 3 percent increase cap will remain in place for most rentals.

When the $20 measure was put in place four decades ago, the average rent was about $600 or $700 in Elizabeth, according to Councilperson Manny Grova Jr., who called the measure “outdated.” Twenty bucks is 3 percent of $667, so it made sense to Elizabeth’s lawmakers at the time.

But the average rent in Elizabeth is now about $1,500, Grova added. Three percent of that is $45, so many landlords can more than double their rent increases under the updated policy.

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Unsurprisingly, landlords and tenants are on opposite ends of the issue.

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David Brogan of the New Jersey Apartment Association, which represents landlords, said prior to the vote that eliminating the $20 restriction would be a “positive step” for housing providers dealing with higher costs. Brogan noted that the trade group continues to oppose any form of rent control.

Meanwhile, Gerardo Benavides of Make the Road Action New Jersey, which advocates for immigrants and the working class, told the end of $20 increases could be “could be incredibly dire” for many. (His fellow advocates in New York, however, are advocating for a rent cap similar to the one he opposes.)

Elizabeth isn’t the only city in the Garden State where landlords are contending with rent control. In Jersey City — which has the metro area’s fastest rising rent — all apartment buildings with five or more units are presumed to be rent-controlled based on an old city ordinance.

Under a 1987 state law, developers could apply for 30-year exemptions from rent control, but those are beginning to expire, as Equity Residential’s Sam Zell recently learned.

— Holden Walter-Warner