General Assembly Passes NJAA Opposed Legislation that Would Allow Rent Control to be Imposed on Newly Constructed Senior (55+) Rental Properties
June 21, 2013
On June 20, 2013, the General Assembly, in a sharply divided vote, narrowly gave its approval to a reckless piece of legislation that jeopardizes the State’s housing recovery. A-2737/S-897 reverses – for 55+ senior housing – a longstanding statewide policy to encourage new rental housing construction by prohibiting municipalities from imposing rent control on new construction for 30 years.
New Jersey is one of only four states plus Washington DC to have rent control on privately-financed and built rental apartments (in addition to New Jersey, only New York, California, and Maryland have rent control). All of these states with rent control have statewide policies to encourage new multifamily construction by limiting the imposition of rent control on newly constructed buildings.
A-2737, if enacted, would make New Jersey the only state in the nation to subject new apartments to rent control. In fact, all of these others states already go further than New Jersey to promote investment in housing. New York State exempts all housing constructed after 1974 from rent stabilization and rent control. Washington DC exempts all housing constructed on or after 1976. In California, the Costa–Hawkins Rental Housing Act adopted a policy statewide that exempts all newly constructed housing from rent control in perpetuity.
Across the State of New Jersey this policy to exempt new rental housing from local rent controls has been essential to the economic development we have seen in our urban centers. From the “Gold Coast” in Hoboken, Port Imperial, and Jersey City to market-rate projects in Newark, New Brunswick, Long Branch, Trenton, and Camden, scores of buildings that are now home to thousands of New Jersey’s families would not have been possible without this commitment from the state to safeguard new construction from the well-known ills of rent control.
This statewide policy is essential for all residents, and eliminating it for seniors would have serious ramifications to the availability and affordability of rental housing options for seniors in New Jersey. As rent control has the impact of discouraging new rental housing development, this bill would severely reduce the production of new rental units for seniors, ultimately making those units currently available in the marketplace more expensive. It is important to note that rent control (either for seniors or the general population) is need-blind so those who do not actually need subsidized housing will be covered under the rent control.
In this shifting economy and uncertain real estate market, the current statewide exemption for construction of new senior rentals is a critical component of New Jersey’s statewide housing policy to help bring new housing choices and opportunities to our older residents.
This reversal of a successful housing policy program which has been in place for over twenty year is bad for seniors today, bad for seniors tomorrow, bad for our economy, and bad for the future of rental housing in New Jersey.