How much can tax payers or the town bear? Last week, during a teleconference meeting the Council approved a rent control ordinance in buildings with 4 or more units, capping rent increases at 4.25% and at 2.50% if anyone over age 65 years lives in the unit. Town tax revenue will be reduced as rental revenues decrease in buildings. Someone has to make up the difference.
According the Montclair Local, the 2016 census reported, 42% of town residents rent and with 13.2% in 2 units buildings and 10.2% in 3-4 unit buildings. That means 58% of town residents are buying their home…and investing in Montclair. Representatives are responding to tenants’ complaints but what do people say who will pay for it?
Rent control has been debated for decades and consistently voted down by Montclair residents as a referendum on the ballet. Now its approved by the Council just a month before the town election May 12 and during this extraordinary time when residents have to remain home. Proposals for rent control came from both mayoral candidates and a proposal was approved by those councilors running for re-election. The mayor and one councilor chose to abstain who are not running.
" We need more ratables" was the mantra pro-development advocates used to justify large scale development to increase the town's tax base.. How does causing taxes revenues to come down on apartment buildings fit this objective?
According to the NJ Assessor’s Handbook, residential property with 5 or more units are assessed or valued with an income approach. Four unit properties are valued with an approach using both income and sales and 1-3 units valued with a sales approach only.
Montclair’s Municipal Assessor, George Librizzi, CTA, IFAS, SCGREA stated, “Rent control will eventually shift some tax burden to property with 4 units and less; when that happens, depends on economic and market conditions.” If the property’s revenue is constrained, then value of the property is constrained and consequently taxes which will be made up by smaller properties.
Mr. Librizzi added, “A free market will find the right level of rent.” Hundreds of apartments are now being built or are planned for in and surrounging Montclair. "Landlords will have to compete for the good tenants.”
Economic experts cannot predict market forces with recent weekly leaps in unemployment and a plunging economy. So why and why now?
When someone pays less, others pay more. Costs do not disappear. Economic and racial diversity is valued in Montclair but how much will social engineering contribute to a gradual demise of the town’s popularity by intervening in market forces? Most single family home owners in median priced homes, no matter what their ethnic group already flee Montclair taxes when their children graduate from high school, selling to young families who will also pay less taxes than the town incurs with the costs for public schooling. We need empty nesters to stay in town and pay taxes to support the schools they no longer use.
Montclair is full of good people who like to help others with affordable housing in Montclair; however costs and consequences seem ignored. Affordable housing advocates press our town for more and more lower cost/ lower taxed housing. Other tax payers have to make up the differences in services not covered by those lower taxes. Montclair provides its share of government mandated affordable units.
Advocates speak about the long list of people who need affordable housing and want to live in Montclair. They also speak about those residents spending over 30% of income for housing and about life long residents who now cannot afford to stay. It’s not unique to pay 30% in housing if you choose to live in popular area and retirees all over the Northeast leave their homes for less expensive states. Many Montclair retirees move to more affordable local towns and still enjoy Montclair. There is an endless list of people who want what they cannot afford. We are all on that list.
That said, losing most empty nesters and seniors is very problematic. Town finances need more residents paying taxes who support the schools but don't use them. Montclair needs to work harder to be affordable for residents to stay and maintain the wide diversity of homes.
Several local realtors all say the same thing. People choose Montclair for a variety of reasons: its accessibility to Manhattan, the school system, a cosmopolitan feel, walkable business districts, parks and park like neighborhoods, a wealth of beautiful housing stock and its diversity.
A group of landlords protesting the ordinance may appeal the new law in court and/or will collect signatures to put this on the ballot as a referendum for voters to decide.
There is a policy debate. Ask yourselves.
1. Is it the obligation of tax payers and the town's government to maintain our diversity and demographic character by redistributing taxes?
2. How much intervention in market forces can town residents afford to help people live here who otherwise cannot afford to?
3. This proposal provides for a review in 10 years. Would it make more sense to have a short term rent control to restrict unjustifiable high rent increases until the market forces provide a path to the “right level of rent”?
4. Do we have the right to limit private property rights with rent control?
5. Why now...during personal, family and an economic upheaval and when so many apartments are being developed in the area?
6. Will landlords not want to rent to seniors since rents are more restrictive?
What can you do to have a say?
1. Support the landlords appeal or sign their petition for a referendum to be on the ballet for voters to decide.
2. Ask the Councilors why they think this ordinance is good for the town and their constituents.
1st Ward Cllr. Hurlock: email@example.com
2nd Ward Cllr. Schlager: firstname.lastname@example.org
3rd Ward Cllr. Spiller: email@example.com
4th Ward Cllr. Baskerville: firstname.lastname@example.org
At-Large Robert J. Russo: email@example.com
See ordinance on town site Council agenda page for April 7 here.
See video of April 7 Council meeting here or search in Youtube.com
Details of Redevelopment Area Proposals
Council Email addresses, Meeting Agendas and Minutes
HPC Meeting Agendas
Planning Board Agendas