BUSINESS & ECONOMY

Newark Rent Control Board Rejects Landlord’s Application

By Michael Hill
Correspondent

In March, Newark city inspectors found 702 code violations at The Addison’s two rent-controlled buildings — including in the garage — and ordered the owner, Azure-Waterford, to fix them.

That would hold up the landlord’s application to hike the rent here by almost 17 percent — the first hardship application to the Rent Control Board in years.

“Currently the income that is generated from renting out the units doesn’t cover the operating costs,” said Eric Martindale.

“We’ve reviewed their application and is all full of smoke and mirrors. They refuse to provide the income tax returns which is the real meat, the juice,” said Calvin Souder, attorney for the owner.

Then the owner’s attorney went before the Rent Control Board seeking a second extension — 30 days this time — to get money to make repairs because the city has found the owner has failed to make substantial compliance because the two buildings still have 398 code violations.

“It is our belief that we are in substantial compliance,” Souder said.

“They knew going in to the application the condition of those buildings,” said Ariadne Montare, the tenants’ attorney.

The board sided unanimously with the tenants and rejected the owner’s request for a delay and the nearly 17 percent rent increase.

The case highlights Newark’s battle over its 10,000 rent-controlled apartments. Two years ago, the city adopted an ordinance that ties rent increases to the consumer price index — increases of zero to 1 percent.

Property owners and their associations in Newark and New Jersey complain Newark’s rent control ordinance is too restrictive.

“Rent control as currently written is really unreasonable,” said attorney Derek Reed.

Reed helped found the Newark Apartment Owners Association and says a study shows the tax burden will shift in the city.

“Homeowners, regular folks that own homes in Newark, their taxes are going to go up 12 percent, anywhere from $600 to $650 per year because rental control in Newark as it’s currently written has depressed values of these rental properties to the point that there’s going to have to be a shift to other folks in the city,” he said.

But, one member of the Newark Rent Control Board says, “I don’t think the city has a severe or brutal rent control ordinance. Rent-controlled buildings were not being maintained. You were getting rent increases of four percent before and the buildings still were not in compliance. Now they have to be held accountable.”

Tenants say they suspect The Addison’s hardship application may have been a trial balloon.

“What we basically think is they’re trying it with us and they’re going to try it with everybody else if they’re successful here,” said Fidelia N. Uzoukwu Odutola, chairperson, 380-402 Tenants Association.

But, on Tuesday night, the Rent Control Board burst that balloon, sending rent control opponents back to square one.