Ailing Apartment Building In East Orange Now Faces Massive Rent Hike, Advocates Say

This article was updated on Dec. 5

ESSEX COUNTY, NJ — A century-old apartment building in North Jersey that a law clinic once described as “notorious” may now see a massive rent hike, advocates say.

Earlier this week, Rutgers Law School reported that the receiver for 75 Prospect Street in East Orange has filed a hardship rental increase application with the East Orange Rent Control Board.

The proposed hike would raise rents from an average of $2,435 per month to $4,482 per month, advocates said – an increase of about 84 percent.

“This just was not in my plan because I'm 92-years-old now,” a resident of the building told ABC7 News.

“I have a sister here that's disabled, she has nowhere to go,” another person said.

The building is in receivership, which says rents for current residents will not jump that dramatically, but new tenants will pay over $4,000 per month for rent, ABC7 News reported.

“The building is insolvent and is facing board-up,” the receivership stated. “Even at 100% occupied, it does not cover operating expenses at the current rent schedule.”

Advocates are arguing that the proposed rent hike comes as a shock to the people living there, however.

According to Rutgers Law School, there’s a complicated history behind the property, which has seen repeated complaints about leaks, mold, damage and other living conditions:

“Known as ‘The Castle,’ the 44-unit historic building was a community institution before facing recent neglect by its owners. The tenants, long-term residents, sought the appointment of a receiver in 2023 to halt the rapid decline of their long-term homes. Never did they anticipate that the Texas-based receiver selected by Fannie Mae would warehouse 24 vacant, rent-controlled apartments and cite a lack of rental income at the property as a basis to increase their rents.”

Seven of the tenants’ households include members over the age of 65, advocates said.

“This $2,000 rent increase is unaffordable and would drive many longtime East Orange families out of the very homes they sought to protect,” Rutgers Law School stated.

Advocates said the Rutgers Law School Housing Justice and Tenant Solidarity Clinic is representing several residents in a lawsuit, which is expected to be filed on Friday.

• See Related: ‘Notorious’ Apartments In East Orange Enter Foreclosure

'A SYSTEMIC PROBLEM IN EAST ORANGE'

The building’s receiver, Texas-based Catalyst Property Solutions, said the partnership – like several other apartment communities in East Orange – is “insolvent.”

A spokesperson for the company provided Patch with the following statement about the situation at 75 Prospect Street:

“A large part of the reason these properties are in receivership and pending foreclosure is that even at 100% occupied, they do not cover operating expenses at the current rent schedule. As a result, these properties were initially found with a plethora of deferred maintenance, residents living in sub-standard conditions, and ownership failure. While living conditions have been cured with adversary actions taken against the property ownership and funds provided by the property lenders for these properties, insolvency is a systemic problem in East Orange, with several properties in financial default and foreclosures imminent. High taxes, rising costs of utilities, property insurance combined with a heavy regulatory environment, city fees, overzealous rent abatement practices with some tenants denying access to their units swapping repair needs for rent abatement credits, poorly written anti-eviction laws combined with a court system that allows some tenants to go months without paying rent (despite their ability to pay) and hefty legal bills before the landlord can evict and re-occupy the premises with rent paying tenants has led to the need for change.”

“We are looking to increase rents to cover basic operating costs for the vacant units, with a stair-step increase for occupied units over a period of time in coordination with the East Orange Rent Control Board,” the company said.

“As far as claims made, the receiver is a neutral party,” the company added. “We trust the courts will examine the facts and to figure out the appropriate resolution. We will take our marching orders accordingly.”

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