'People Are Really Scared,' Property Owner Sues Hoboken In Federal Court

HOBOKEN, NJ — Hoboken's rent control laws have been on the books since 1973, but new corporate landlords in town who've tried to raise rents 15 percent or more are finding that the laws may apply to them — and they've filed suit, leaving tenants stuck in the middle.

LPF 1200 Clinton Equity LLC, which owns The Jordan apartment building at 1200 Clinton St., filed suit in U.S. District Court on Jan. 2, 2024 against the city of Hoboken and Hoboken Rent Leveling and Stabilization Board, according to documents obtained by Patch.

The Jordan complex, on the west side of town, is managed by Willow Bridge. (Willow Bridge was once, under another name, the residential division of Lincoln Property Company, but it was sold to new owners and is not part of Lincoln.)

Last year, 12 tenants at the Jordan, who received what they believed were unusually high rent increases, asked the city for a determination of their legal rents.

At a hearing in September 2023, the city determined that the Jordan is subject to rent control, which limits increases to around 5 percent, but allows landlords to pass along tax, water, and other surcharges.

However, a New Jersey law passed in the 1980s exempts certain properties from local rent control for 30 years — provided specific conditions are met.

Buildings would have had to apply for an exemption on a certain timeline, and must notify tenants of the exemption when they sign a lease.

Because tenants in some of the city's newer buildings — often owned by corporate landlords — have been given unexpectedly steep rent increases, such as 20 percent or more, tenants have begun asking questions. And that's what led some of them to find that their buildings may be subject to rent control.

The federal lawsuit from the LLC says that when company purchased the Jordan complex in 2018, they understood it was exempt from rent control.

The suit says that the city's Rent Leveling Office initially gave tenants of the Jordan a determination last year that their building was not under rent control. However, the tenants appealed at a hearing before the city's Rent Leveling and Stabilization Board. At the September 2023 hearing, the city ruled that the Jordan didn't follow all the rules to be exempt and is, in fact, subject to Hoboken rent control laws.

In the January 2024 lawsuit, the Jordan said they weren't notified early enough about the September hearing, and didn't have enough time to prepare.

The suit argues that the determination violates their constitutional rights.

According to the suit, "The Board's actions and the Resolution stripping The Jordan of its exemption under the Rent Control Exemption law is contrary to law because they: Constitute an unlawful regulatory taking of property without just compensation in violation of the United States constitution and the New Jersey state constitution….”

Willow Bridge has given tenants a letter saying they will still operate as if exempt from rent control.

"The Landlord has taken the position that the Jordan remains exempt form the local Rent Control Ordinance, and is in the process of pursuing appropriate legal action to verify said position," the letter says.

One tenant in The Jordan said that now, tenants are not sure whether to pay rent increases that they believe are too high.

He also said tenants in Hoboken need expedient direction on legal rents. He said it took his neighbors as long as 7 months to find out from the city whether their unit is rent controlled, and to get a rent calculation, making it difficult to decide on new leases and other matters.

Even without rent control, New Jersey has a state law saying a rent increase must be "reasonable" — an amount found, in the past, to be 25 percent or lower. But it's determined on a case by case basis, often when the tenant doesn't pay the increase and the matter reaches court.

The burden is on the tenant to withhold the increase and be faced with legal action.

One of the tenants who spoke with Patch, an attorney who lives in the Jordan, said, "People are really scared. They don't know what to do."

A recent study said that Hoboken's rent increases from 2022 to 2023 were the highest in the New York City area, growing an average of 20.7 percent.

The attorney said people in his building, and even in other buildings, have reached out to him and other lawyers who happen to live at the Jordan, because they’ve been vocal. But, he said, he's only a tenant, not a rent control lawyer.

"People are wondering, are they going to owe all this rent?” he said. “Their lease is exorbitant and they can't afford it. We're in a real state of limbo. People need a place to live. They need to know what they're doing."

Much Larger Issue

The issue relates to an ongoing controversy in Hoboken — and across America — about just how high landlords should be able to raise rents after a tenant moves in. Some increases have been 30 percent or more, an amount often out of line with a renter's salary increases and anticipated budget.

Further complicating matters, investigative reports over the last two years suggested that the nation's biggest corporate landlords were not setting rents based on the local market, but rather, according to a software program. This means that all the buildings in one area could raise their rents simultaneously, giving tenants no place to look for cheaper rentals, a situation that may have happened recently in Seattle. (See: RealPage, Lincoln Property face class-action in wake of ProPublica exposé, or this story about Lincoln Property Company and lawsuits.)

Recently, the city of Hoboken threatened a different corporate landlord, AvalonBay, with fines if they did not comply with a 2023 rent control ruling. READ MORE: Hoboken Says AvalonBay Could Be Fined $660K For Its Rent Increases

Hoboken Mayor Ravi Bhalla told Patch last month, regarding the Avalon Hoboken case, "Avalon is flagrantly ignoring the ruling by the Rent Control Board. ...We as a city will stand up to corporate greed that undermines the well-being of our community.”

Now, the city's attorneys have similarly threatened the owners of the Jordan with $477,000 fines.

What To Do?

Tenants say they've invested in the city, put their kids in the schools, and paid their rent on time. Now, they say, the city needs to make it clear to the public which buildings are subject to rent control, and also clarify for tenants what their rights are.

For comparison, the city of New York spells out renters' rights, and what landlords cannot do to intimidate or displace tenants.

The state of New Jersey has strict tenant protections as well (see links at the end of this story), but what constitutes an "unreasonable" or "unconscionable" increase is not always clear.

"There is a massive displacement of young families occurring," one Jordan tenant told Patch. "We're the ones that have to leave, and we were beginning to build our lives here...the college kids downtown pack so many kids in the apartments, the per-head cost to them is doable. You can see the shift occurring."

Patch has reached out to Willow Bridge and the LLC's attorneys for additional comment and will update the story if any is received.

READ MORE: City Of Hoboken Says The Jordan Is Under Rent Control

READ MORE: Rivington Landlords Roll Back Rents, Cancel Shuttle

READ MORE: Hoboken Delays Vote On One-Time Rent Control Increase