AvalonBay May Have To Roll Back Hoboken Rents Due To Rent Control

HOBOKEN, NJ — In a growing trend, another national real estate firm that's been renting out apartments in Hoboken has been told that their complex is subject to local rent control — which keeps annual rent increases to 5 percent.

Now, the AvalonBay company, which owns the Avalon Hoboken complex at 800 Madison St., may have to reduce tenants' rents — rents that tenants say have climbed more than 20 percent year to year.

The fact that the complex may fall under the city's 50-year-old Rent Control Ordinance came to light after AvalonBay raised some tenants' rents as much as 30 percent in the past year, causing many to question whether those increases broke either state or local regulations.

While all rentals in Hoboken are subject to state laws about rent increases, only some buildings are subject to the local Rent Control Ordinance (depending on how new they are and whether they've met conditions for exemption).

Hoboken's Rent Control Ordinance, which has evolved since it went into effect in 1973, basically limits annual rent increases to the Cost of Living Adjustment and allows landlords to pass along portions of increases for taxes and water bills. Landlords can also apply for larger vacancy decontrols every few years.

Earlier this month, tenants of Avalon Hoboken and several other complexes in town managed by national firms — including the Bozzuto Group and Lincoln Properties — complained that they'd been hit with rent hikes as high as 30 percent. READ MORE: Tenants Fight Back In Hoboken And Jersey City

Mayor Ravi Bhalla sent a letter to three companies early last week warning them that their increases may be "unconscionable" under New Jersey state law.

New Jersey law doesn't have a cap on how much properties can raise rents, but does say the increase can't be "unconscionable or unreasonable." Court precedent says that's usually around 25 percent, according to experienced tenant advocates.

From New Jersey law:

Still, it can be difficult for a tenant to take time to fight such an increase in court.

That's why the tenants spoke out in the media recently and asked Mayor Ravi Bhalla's office to get involved.

Among the letters sent last week, Bhalla addressed this one to AvalonBay, a REIT that owns complexes all over the country, including in Hoboken, Jersey City, and North Bergen:

Then, A New Twist

Buildings built in New Jersey in the late 1980s and beyond were allowed to apply for a 30-year exemption from any local rent control laws. Many of the newer complexes in Hoboken have done so.

However, the owners had to file an exemption by certain deadlines.

Some of the new owners that have bought luxury complexes in Hoboken in the last decade have been unable to prove that the original owners applied for an exemption.

Last year, for instance, certain luxury buildings owned by Equity Management — the Rivington in Hoboken and Portside Towers West in Jersey City — were determined to be under rent control.

READ MORE: Rents In Jersey City And Hoboken Are Highest In Country, But Are They Legal?

With Avalon Hoboken, the situation is a bit different.

On Friday, lawyers for the city's Rent Control Board sent a letter to the owners of the Avalon saying that while there is an exemption on file, it was issued a year late, in 2010 instead of 2009.

Technically, this means the complex is now under rent control, the law firm said.

Ironically, the tables have turned, and it's now AvalonBay that may have to pay out money they weren't expecting.

But will the one-year difference really result in the owners rolling back recent increases? And will AvalonBay have to issue refunds?

It remains to be seen.

In the case of the Rivington last year, some tenants appeared to compromise at first instead of requesting refunds.

Hoboken city spokesperson Marilyn Baer confirmed Monday that this letter was sent to AvalonBay last week by an attorney for the city's Rent Leveling and Stabilization Board:

Baer said, regarding the mayor's initial outreach to AvalonBay, "The mayor had a conversation last week with an executive from Avalon, in which he advocated on behalf of the residents and made a direct appeal to the company’s leadership regarding their unconscionable rent increases imposed on residents. The Avalon did not respond back to the mayor in writing regarding his initial letter."

With the new finding about the complex being under rent control, Baer said, "The city will pursue all possible means to ensure the Avalon, and other buildings and residences deemed to be under rent control, are abiding by the city’s rules and regulations."

Avalon did not respond to inquiries from Hoboken Patch by press time. Their response will be added if it's received.

AvalonBay bought the block-long complex in 2016 for $129.7 million.

Who's Speaking For Tenants Displaced From Non-Luxury Buildings?

Apartments in Avalon Hoboken rent for $3,400-$5,085. In fact, NBA star Kris Humphries lived there for a while just before he married Kim Kardashian, according to reports at the time.

So, with attention on these luxury buildings, what about other longtime tenants who are being displaced?

A local volunteer tenant advocate, Cheryl Fallick, told the City Council at their meeting last week that she was glad to see the show of support for tenants in luxury buildings, but that the city also needed to step up publicly for tenants who aren't in that income bracket, who are being unfairly pushed out of older rent controlled buildings so the new owners can tear them down.

This is another situation that has come to light recently.

As reported on Patch, several tenants have said recently that new owners of their older rent controlled buildings have told the they have to leave in a few months. However, by state law, tenants do not have to leave a building just because it has a new owner.

Read more about the laws on Patch here. READ MORE: Longtime Renters Fear Displacement In Hoboken

Where To Get Help Or Information

Because of Hoboken's dark history of tenants being pushed out of buildings during gentrification, the city has a lawyer whom tenants and landlords can contact for free if they're not sure of the laws about rent increases, evictions, and related matters. Click here to find out more.

Tenants can also contact the city's rent control board to find out their legal rent and whether their building is subject to rent control/stabilization.

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