Equity Residential tenants demand $700M, alleging illegal rent hikes

Tenants of two Equity Residential buildings in Jersey City scored a major win last fall when the city’s Rent Leveling Board unanimously voted the Portside Towers were subject to rent control.

But the landlord, Equity Residential, wasn’t so keen on that.

The decision introduced the possibility of rent rollbacks to 2016 rates, a relief for tenants who had weathered hikes as high as 50 percent at 155 Washington Street and 100 Warren Street.

Months after the RLB’s ruling, tenants claim that their landlord has failed to comply with rent control regulations at the buildings, according to a class action complaint.

Equity hasn’t only maintained rents, but even raised rents, leased new units at rates higher than those allowed under rent control and filed to evict renters who have refused to pay illegal amounts, the suit alleges.

Tenants of the 527-unit building claim they’ve been overcharged a total of $140 million in over two decades of illegal rent increases. They’re now seeking over $700 million in treble and punitive damages.

“Equity Residential was not only unreasonable but continued to increase rents for over 8 months since the tenants won,” Kevin Weller, president of Portside Towers East Tenant Association said in a statement.

“Equity chose to abandon the last opportunity they had to settle this at a discount,” he said. 

A spokesperson for Equity did not immediately return a request for comment.

Equity has likely held the line because a court has yet to enforce or reject the RLB’s decision.

Equity challenged the constitutionality of the board’s vote in a November complaint. The next month, tenant associations for both towers filed suit to enforce the RLB’s finding that the buildings are subject to rent control.

Both cases are ongoing.

The landlord-tenant scuffle at Portside Towers started in 2022 when renters buckling under pandemic-era rent hikes discovered Equity had failed to file for exemptions from rent control on time, yet still charged tenants market rate.

Under New Jersey law, all apartment buildings with at least three units constructed before rent control took effect in 1987 are presumed to be rent-controlled. The legislation does include a carve-out for buildings developed after 1987 that allows developers to apply for a 30-year exemption. 

The board ruled Equity skipped that step when it built Portside West and East in the ‘90s.

Equity, for its part, said it had turned to software to calculate rent increases when tenants first challenged the price points.

Around the same time, RealPage caught flack for its YieldStar software, which a ProPublica investigation found could be inflating rents and suppressing competition. 

The Portside Towers tenants allege Equity used RealPage to set and adjust rents, a potential violation of state and federal antitrust laws. The Towers East Tenant Association has also taken legal action against RealPage, filing a class action suit in April 2023. 

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