NJAA Executive Director David Brogan, shares his opinion with NJ.com on the proposed legislation that would suspsend payments of mortgage loans and tenant rent with no penalties. Read below for the full feature.
Rent holiday would shift taxes to homeowners
Assemblywoman Britnee Timberlake, D-Essex, recently wrote an op-ed (“Both renters and homeowners need economic relief during this crisis”) touting her proposed legislation that would suspend payments of mortgage loans and tenant rent with no penalties or added interest for up to 180 days.
While I respect the assemblywoman, A-3948 is a temporary COVID-19 response for tenants that will create long-term financial hardships for homeowners and landlords. Unfortunately, it would create the biggest property tax shift in New Jersey’s history. Multi-family housing owners in New Jersey currently pay over $1 billion in property taxes. These property assessments are based on net operating income, which is rent revenue, minus expenses. Given that A-3948 would reduce by up to one half the annual rent revenue for every multi-family property in this state, that would result in a massive reduction in property tax revenue supporting municipalities. If this property tax revenue disappears, the difference will need to be made up by homeowners.
Even if Timberlake’s bill is not enacted, we can expect massive tax increases to make up for lost revenue and increased expenses due to the coronavirus virus. Everyone is struggling. The last thing we need right now is an additional property tax increase that could have been avoided.
A-3948 is not an answer we can live with, and homeowners shouldn’t stand for it.
David Brogan, Executive Director, New Jersey Apartment Association, Monroe
Click here to access the article on NJ.com.