Bozzuto Group May Back Down After Rent Hikes Are Called 'Unconscionable'

HOBOKEN, NJ — Reports of landlords hiking rents in Hoboken by 20 and 30 percent rent in certain buildings prompted Mayor Ravi Bhalla sent two stern letters in the last week telling one management company to reconsider.

Now, the management company — the Bozzuto Group —which was also addressed a letter from a tenant who faced a 30 percent increase, is discussing possible compromises on its rent increases.

In New Jersey, regardless of rent control status, the law says that rent increases must not be "unreasonable or unconscionable." Local advocates have said that increases of 25 percent or more have tended to fail in court.

"The city heard from the Bozzuto Group, which communicated a general willingness to reconsider their unconscionable rental rates, which Mayor Bhalla appreciates," said city spokesperson Marilyn Baer on Wednesday. "He looks forward to seeing specifics from the Bozzuto Group as soon as possible that address his direct request to keep rents in line with the Consumer Price Index, among other asks."

Tenants in Bozzuto and other buildings owned and managed by large firms have been speaking out in Patch since last year about out-of-proportion rent hikes.

Jamie Burkhardt, a tenant who spoke out in a letter on Sunday, said on Wednesday, "They reached out and we’ve agreed upon an acceptable increase in rent. We appreciate Toby Bozzuto himself reaching out to us with a sincere apology for the stress this has caused, and we’ve been assured they will work to present more reasonable increases for all existing tenants going forward."

Councilwoman Tiffanie Fisher said Wednesday, "No Hoboken resident should be subjected to unconscionable rent increases of 20-30 percent, that are more than double the inflation rate. After several discussions, I was told today that the Park and Garden building owner and Bozzuto are meeting to hopefully agree a more reasonable approach. I'm cautiously optimistic."

Bhalla wrote a letter Friday telling Bozzuto CEO Toby Bozzuto to rethink the "unconscionable rent increases imposed on hundreds of residents in buildings" that the company manages in Hoboken.

Tenants in Hoboken have said that they've been fighting such increases for over a year, and not just from Bozzuto. (READ MORE: Tenants Fight Back Against High Rent Increases In Hoboken And Jersey City)

The city noted in a release Tuesday that "Tenants have been faced with rent increases of up to 30 percent in the Artisan, Park + Garden, Bexley, and more, all owned and/or managed by the Bozzuto Group, a company listed as having revenues of $2.4 billion by Forbes in 2022."

Earlier Reporting:

In a recent case at Park + Garden, a couple with two children posted a letter on Patch Sunday noting that their 30 percent increase would come out to more than $1,500 a month, or $18,000 a year — obviously a big change in a household budget.

LETTER: 30 Percent Increase Is Too High

The mom said that she didn't want to pull her children out of the local public school district, or leave a city where she's set down roots.

Bhalla wrote on Tuesday, “While market conditions have impacted both landlords and renters in various ways, the city is committed to creating and maintaining affordable housing through our local ordinances, to help prevent displacement whenever possible."

He added, “While I appreciate that a number of landlords are working cooperatively with tenants to help achieve this goal, rent increases in certain buildings of up to 30 percent are completely unreasonable and unconscionable, and only serve to price residents out of their apartments and residences."

In Hoboken and Jersey City, national firms have been buying up locally owned apartment buildings, then charging outsize rents — which were also illegal in some cases, although tenants didn't know it until they began researching.

Some of the buildings fall under the city's 50-year-old Rent Control Ordinance (such as the Rivington). READ MORE: Rivington Rent Hike Reduced

City May 'Pursue Legal Remedies'

On Tuesday, 5th Ward Councilman Phil Cohen, whose ward encompasses the buildings in the northwest part of the city, added, "I join Mayor Bhalla and call on Bozzuto and its CEO to live up to Bozzuto’s Corporate Social Responsiblity statement, treat its Hoboken tenants fairly, and rescind its unconscionable rent increases."

He also called on the city to "pursue all appropriate legal remedies to protect Hoboken’s residents, including the residents at The Artisan, who live in the 5th Ward.”

The Artisan has two two-bedroom apartments available for $4,887 and $5,103 per month, its website says.

Addressing Bozzuto Directly

Bhalla wrote, "I’m directly asking the Bozzuto Group, as well as any and all landlords considering massive rental hikes, to show some compassion and decency and work with existing tenants on rates that are reasonable and appropriate.”

The city pointed to Bozzuto’s Corporate Social Responsibility statement on their website, saying they seek to make “a tangible difference in communities facing homelessness and housing challenges."

The Bozzuto Group was harshly criticized by the Mayor of Park Ridge, New Jersey in 2022 for applying similar, unconscionable rent increases to residents of “The James," a 240-unit building in Bergen County, the Bhalla administration pointed out.

Bhalla wrote one letter to Bozzuto on Friday, then wrote a second letter on Tuesday. The full text of the second letter to CEO Toby Bozzuto is below: ‍
‍
April 11, 2023
Toby Bozzuto
CEO, The Bozzuto Group
6406 Ivy Lane, Suite 700
Greenbelt, MD 20770

Dear Mr. Bozzuto,

I write to you again to ask you to have some decency and compassion for those residents who are being unjustly imposed unconscionable rent increases in buildings owned and/or managed by your corporate real-estate company, the Bozzuto Group.

As I have recently communicated to you, there are hundreds of residents in several apartment buildings under control of the Bozzuto Group who are facing a dilemma imposed by your company, that no one should have to deal with: pay rent increases of up to 30% or find another place to live. Many of these tenants also faced double digit rent increases last year. To be clear, this is not just one or two individuals who have received these massive rental increases. These are a mix of families with children attending our schools, local business owners, young professionals who are looking to set down roots, residents who have lived in the building since it came online years ago, and many more.

To be frank, you should be deeply troubled by the actions of your company. Your unjust rent increases, which equates to tens of thousands of dollars each year for many of these residents, are completely unreasonable, and to be frank, are acts of corporate greed. In my previous communication I asked you to work with the residents to come to reasonable rent increases, such as adjustments in line with the Consumer Price Index (CPI), that do not unfairly burden residents and families, many of whom simply cannot afford these massive increases. While I understand you initially did not find merit to this request, I am directly asking you again to reconsider.

According to Forbes, Bozzuto’s revenue in 2021 and 2022 was $2.4 billion each year, and in 2020 it was $2.3 billion. No doubt, you and your executive leadership team have reaped millions of dollars of those revenues. It’s all the more shocking that despite these massive profits, you are attempting to squeeze even more money out of the good, hardworking residents that you and your company claim to care so deeply about.

I refer you to your own website, which lists your “pillars” of Corporate Social Responsibility: ‍

The core of Rise by Bozzuto revolves around making a tangible difference in communities facing homelessness and housing challenges.

My question for you: What type of “tangible difference” does a 30% rent hike make for residents in your buildings, and how do these unconscionable increases combat “housing challenges”? ‍

Through our powerful culture and unique expertise in development, construction, management and homebuilding we elevate communities and lives.

My question for you: How, specifically do 30% rent increases elevate communities and lives, if they’re priced out of their residences? ‍

Our supporting pillars are youth development and social & environmental impact.

My question for you: What type of social impact do you think takes place to those residents facing up to a 30% rent hike?

I refer you to a desperate plea from a resident, Jamie Hersch Burkhard, who along with her husband, live with their two young children in Park + Garden, a building owned and/or managed by your company. Like her neighbors in this building, Jamie and her family simply cannot afford a drastic 30% increase in rent, which equates to a $1,518 increase per month, or $18,216 for the year. She implored you in a letter she wrote to you this week that I ask you to read in full, which I’ve also attached to this communication. Here’s a quick snapshot, which I thought was especially telling:

‍Our son is in the Hoboken public school system and we fear pulling him away from the community and friends he loves at Brandt. Our daughter just started at a daycare we chose because of the proximity to our home. We’ve watched beloved neighbors and friends leave our building over the past several months because they couldn’t afford to stay with these absurd increases.

‍All of this comes down to one simple request of Bozzuto, and its CEO, Toby Bozzuto: please be reasonable. Please don’t drive us out of our homes. Please don’t drive our kids out of their schools. Please understand how we feel, and find a more appropriate increase rate that aligns with the historical increases we’ve accepted each year for the past 8 years.

I am once again making a final appeal to you, to show some decency as a corporate executive, and to once and for all do the right thing. I hope you’ll reconsider these unconscionable rent increases, so you can indeed live up to your “Corporate Social Responsibility” statement of “making a tangible difference in communities facing homelessness and housing challenges”.

Please note that my office has tried repeatedly to attempt to schedule a time to speak with you, however your employees have not accommodated this request, and have not returned calls to my staff. I am respectfully asking for a time that you can speak with me, so we can move forward in a cooperative manner that addresses the concerns in this letter.

I thank you in advance for your time and consideration.