Despite calls to postpone its vote and reconsider the direction it might take, Phillipsburg Town Council approved an ordinance Tuesday to regulate, control and stabilize rents, and create a body to mediate relationships between tenants and landlords.
By a 3-2 vote, the council passed the second and final reading of a rent control ordinance “to protect the health, safety, and general welfare of the residents” of Phillipsburg. Council members Danielle DeGerolamo and Lee Clark cast the dissenting votes. The ordinance will take effect in January.
DeGerolamo, who has objected to the ordinance ever since it was introduced in August, said the majority of the town’s 5,000 homes are rental properties and 750 of them are Section 8 housing that would not be affected by the ordinance.
She said there’s no shortage of housing in Phillipsburg, describing the town as the most affordable place to live in Warren County. The ordinance, DeGerolamo said, will not control much. What’s needed is enforcement, she noted.
Clark said the “ordinance is not for us,” noting that it does not address the more than 700 rental vacancies in town.
Council member Mark Lutz, who attended the meeting by phone, said “we have to start somewhere.” He noted that he favored giving it a try.
Council Vice President Frank McVey said that without rent control, there’s skyrocketing crime, abandoned properties and garbage. He said the 3% increase a year is reasonable, noting that he wants to encourage more home ownership and property refurbishment. Suggesting that out-of-town property owners are not invested in the life of the community, he said Phillipsburg is not the community it could be, but rather “a checkbook for landlords.”
Council President Robert Fulper did not make any comment.
Before the vote, Ron Simoncini of Axiom Communications – a Secaucus, New Jersey, consulting firm representing landlords in Phillipsburg – and Nicholas Kikis – vice president of legislative and regulatory affairs with the New Jersey Apartment Association – separately asked the council to postpone the vote and instead form a committee of landlords, tenants and town representatives to discuss the rent issue in Phillipsburg.
“Rent control is a zero-sum gain” and a counterproductive strategy that reduces investment in rental housing, Kikis said.
Rent control is a bad idea that amounts to overregulation that that discourages investment, Simoncini said. He also said the rent leveling board that will be created by the ordinance will be made up of volunteers with no training in determining rental fees.
The ordinance will establish rents between landlords and tenants, ensuring that landlords request or receive no more than a 3% increase a year for occupied housing units. Tenants who supply their own heat or the cost of fuel will not face more than a 2.8% increase. Landlords will be required to notify tenants of a rent increase 60 days before the date the increase goes into effect.
Under the ordinance, landlords will be required to supply new tenants, in writing, with a statement notifying them about the rent control ordinance and a list of all charges, including base rent, tax surcharges and improvement surcharges. Landlords can still negotiate rents with tenants.
A rental registry showing all rental units will be created by directing property owners to provide the names of building superintendents, emergency contacts and what’s included in the rental fees. Permission can be granted to exceed the 3% limit in cases of financial hardships to complete major property improvements.
A Phillipsburg rent leveling board consisting of three members and two alternates will be appointed by the council and serve three-year terms without compensation.
The board will be charged with granting rental increases, decreases, rollbacks and increases due to capital improvements, issuing refunds, keeping records and holding hearings.
The board will hold public meetings on the third Thursday at 7 p.m. in January, March, May, July, September and November.