A legislative solution to a rent crisis brought on by the pandemic could be in place by the end of the month.
Lawmakers are planning amendments to two bills that would limit rent increases to 2% for the first two years after the pandemic and would prevent rent arrears from being transferred to third-party debt collectors. For homeowners with mortgages, as well as small landlords, a forbearance program should be available for at least two years — up from 180 days in the original bill — to allow those parties to “get back on their feet,” housing advocates said in a letter to Gov. Phil Murphy and lawmakers on Monday.
But those proposed changes, which may get a committee vote Thursday, are fueling a renewed battle between landlords and housing advocates as the state prepares to lift its ban on evictions and foreclosures for people who were unable to make payments because of the pandemic.
The New Jersey Apartment Association, a trade group for landlords, said Monday that many small landlords would go out of business if lawmakers approve amendments championed by what it called “radical” groups including the Housing and Community Development Network of New Jersey and the Democratic Socialists of America.
The housing network’s executive director, Staci Berger, said the landlords’ statement was like the “red-baiting” of the 1950s and was really intended to give landlords the right to evict and find new tenants at higher rents.
“It is both unconscionable and despicable that they should stoop to this name-calling and red-baiting,” Berger said, in an interview with NJ Spotlight News.
David Brogan, executive director of the apartment association, said in a statement that he had previously supported one of the bills (A-5685) because it aimed to balance the needs of both landlords and tenants who have been hit hard by the now receding COVID-19 pandemic.
But the amendments proposed by the housing network and about 50 other advocates on Monday would threaten the survival of many landlords, Brogan said, calling for the bill to be passed without the new provisions.
‘Life savings evaporate’
“While small landlords are literally watching their life savings evaporate, the state is failing to fulfill its obligation to get rental assistance to the people who need it,” he said. “Now, some interest groups want to strip away the rights of small landlords to recover even a fraction of what is owed to them. They also want to institute statewide rent control, which would reduce property values, reduce capital improvements in apartment buildings, and drive up property taxes for homeowners.”
Brogan has argued since Murphy’s eviction ban began in March last year that cutting landlords’ rental income would lead to an increase in property taxes because the state would have to raise revenue from homeowners to make up for a cut in income from apartment buildings.
In their letter to Murphy, the advocates praised the protections provided for renters and homeowners by Murphy’s moratorium on evictions and foreclosures the pandemic, and welcomed the measures provided by lawmakers to authorize the extension of some of Murphy’s executive orders, as well as hundreds of millions of dollars in rental assistance from the federal government. Berger said the move to prevent rent arrears from being transferred to third-party debt collectors is necessary “so people don’t get harassed for the rest of their lives.”
But the advocates said renters and homeowners need more protections.
Still more help needed?
“While the federal funding available to protect homeowners and renters is significant and crucial, we do feel strongly that additional measures such as those discussed in this memo, are needed because the funding will not be enough to reach all renters and homeowners in need,” they said in the letter to Murphy.
Assemblywoman Britnee Timberlake (D-Essex and Passaic), lead Assembly sponsor of A-5684 to protect homeowners and small landlords, and A-5685 to protect renters and landlords, said the proposed amendments are fair, and should be included in the final version of the bills.
She accused the apartment association of having “undue influence in Trenton,” and said its members are hoping to erase their pandemic losses by evicting tenants for nonpayment as soon as Murphy’s moratorium is lifted.
“In an effort to hide behind the real plight of the small landlords, the Apartment Association would like the ability to mass evict and raise rents, making New Jersey even more unaffordable,” she said.
In the Senate, lead sponsor Sen. Brian Stack (D-Hudson) said he is “committed to getting the bill done by the end of the month.” Stack’s bill is scheduled for a vote Thursday in the Senate Budget and Appropriations Committee.
Murphy could ‘modify or rescind’ evictions ban
Murphy’s ban on eviction for nonpayment of rent during the public health emergency remains in place, possibly until Jan. 1. It was originally scheduled to expire two months after the declared end of the public health emergency which has now ended, but lawmakers authorized an extension of the moratorium until as late as January.
Still, Murphy could now “modify or rescind” the extension, said his spokeswoman, Alyana Alfaro.
Meanwhile, Brogan said most of the federal rental assistance has not found its way to landlords who have been unable to evict tenants for nonpayment of rent since March 2020, resulting in a drop of up to 30% in his members’ income.
He said “hundreds of millions of dollars” in federal money is “sitting in state bank accounts” rather than being paid out to landlords who have not received rental income from some tenants for 15 months.
But Berger argued that the federal money is in fact getting to tenants and landlords “in the fastest possible way,” and was not designed to be a landlord-relief program. “They can apply for it if their tenants do not,” she said.
The bills that would be amended are a substitute for an earlier measure known as the “People’s Bill,” which would have given tenants up to 2 1/2 years to repay rent arrears accrued during the pandemic. That bill was fiercely opposed by the apartment association on the grounds that landlords should not have to wait for so long to be made whole. The measure stalled in the Senate for months and some housing advocates accepted that it would never become law.