Boro Council to amend rent control ordinance Anthony: Ordinance should satisfy both tenants and landlords BY LAYLI WHYTE Staff Writer EATONTOWN - An amended rent control ordinance expected to be introduced at the Jan. 24 Borough Council meeting would include changes in what costs a landlord may "pass through" to tenants. At last week's meeting, the council discussed the changes to the ordinance with Borough Attorney Gene Anthony, who said he had sent out a letter outlining the proposed changes to the members of the Tenant Rights Committee. "On. Nov. 8," Anthony's letter states, "I met with the mayor and Council to discuss proposals made by [Christopher Hanlon, the attorney representing all of the apartment complexes and mobile home parks] and what I considered workable and what I considered non-workable." At last week's council meeting, Anthony said that Hanlon and the Tenants Rights Committee have been apprised of the proposed changes and have been given the chance to comment on the changes. He said that he has not received comment from either party, and that he takes that as a sign the council can move forward and introduce the amended ordinance at the next council meeting. In the letter, Anthony states that the council would like to see either the Rent Control Ordinance in place or the Rent Stabilization Contract. "The council would like to continue with the Rent Control Ordinance rather than the Rent Stabilization Contract," the letter states. "It believes that generally it provides for better enforcement, more long-term consistency of application and is quite frankly, less expensive to the taxpayers of Eatontown, rather than to continually re-negotiate a contract every two years." These changes come as a result of a rent control ordinance initially passed by the council last September, after negotiations to renew the rent stabilization contract had not yielded any results, and the council felt that it had to act in order to protect tenants. Tenants, including those who pay rent on land in mobile home parks, make up nearly 50 percent of all Eatontown residents. Initially, the ordinance did not permit landlords to pass on increased property taxes to tenants, which, Hanlon said at the Sept. 27 council meeting, could lead to future litigation. The amended ordinance would permit landlords to pass on the cost of increased property taxes, only when taxes are increased by 20 percent or more from the year before. "The number of years in which you would have a 20 percent or more increase in taxes would probably be limited to the years in which there was a reevaluation," Anthony's letter states. "For example, 2006 we had a re-evaluation, but it was the first re-evaluation since 1991." Landlords, according to the proposed changes, would be permitted to increase rent annually according to the regional average Consumer Price Index (CPI), which is published monthly by the Bureau of Labor Statistics at the U.S. Department of Labor. "One of the major issues for landlords," according to Anthony's letter, "was the CPI formula, which they felt was unfair because it had included in the formula an 80 percent/63 percent cap, based upon whether the landlords provided heat or not. The landlords demonstrated that if the CPI was 3 percent, but you include the 80 percent/63 percent cap, you are actually reducing the increase to something less than the CPI's 3 percent. That is true." The letter states that Anthony believes it would be best to change the ordinance to include the standard 3 percent CPI increase. "The council feels that it is both unfair and deceiving and that if the tenants believe they are getting, for example, a 3 percent increase, then they should be getting a 3 percent increase and not something else," the letter states. "The council has decided to remove that portion from the CPI calculation. Therefore, if the CPI is, for example, 3 percent then that is exactly what the landlord would receive, not more or less." Other changes to the ordinance include removing the Fair Housing Clause, since it is enforceable by the federal government and does not need to be reiterated in the borough ordinance, according to Anthony's letter. Also, the composition of the Rent Leveling Board would be changed under the amended ordinance. "The landlords were concerned that the existing composition of the Rent Leveling Board would tend to favor tenants," according to Anthony's letter, "since it would allow the mayor and council to stack the board with tenant representatives. The council is concerned with the fairness issue as well and it does not want the board composition to be a subject of a lawsuit. Therefore, it is suggested by council to amend the ordinance to allow for one member which is clearly designated as a tenant member, one who is clearly designated as a mobile home park resident member, one member who is designated as a landlord member, and the balance of the membership being citizens at large within the borough of Eatontown." There will be no change in the rights of tenants to file a complaint against a landlord for reduced services and seek a rental reduction, and landlords would not be permitted to pass on the cost of increased utility costs to tenants. Anthony's letter states that the ordinance would forever replace the rent stabilization contract. "It attempts to provide some minor adjustments," the letter states, "which would satisfy all parties, but provide no real economic hurt to the tenants and residents of the mobile home parks. Of course, there is also the attempt here to avoid a lawsuit."