David Brogan is the executive director of the New Jersey Apartment Association — Photo by Mary Iuvone for Real Estate NJ
By Joshua Burd
The New Jersey Apartment Association is raising new concerns about a bill that would create long-term repayment plans for renters impacted by the pandemic, following Gov. Phil Murphy’s latest show of support for the measure during his recent State of the State address.
The governor on Tuesday urged the Legislature to pass a bill that would give tenants up to 30 months to repay back rent that they missed due to the COVID-19 crisis. While Murphy did not mention the legislation by name, it was an apparent reference to A4226 and a related bill that were considered by the Assembly and Senate last year, which would also create an extended eviction moratorium.
The NJAA on Wednesday pushed back against the proposal, as it did last spring.
“It is disappointing to see Governor Murphy repeatedly call for the Legislature to pass A4226, a bill that would create unworkable repayment schedules for unpaid rent, despite the fact that New Jersey is on the cusp of receiving nearly $600 million in federal rental assistance,” said David Brogan, the association’s executive director. “The Governor’s solution should focus on rental assistance rather than simply shifting the burden onto landlords and homeowners.
“Governor Murphy repeatedly states that we are in this together and that we are a family. However, pitting one group of impacted individuals against another group of impacted individuals without providing any assistance is a dysfunctional family, not a healthy one.”
Brogan added: “The policy choice is simple: either government provides meaningful rental assistance which helps impacted tenants and mitigates the rental housing crisis; or government unfairly attempts to force private-sector property owners to shoulder that financial burden. Given that placing the burden on landlords will create the largest property tax shift onto homeowners in New Jersey’s history, the choice should be readily apparent.”
The NJAA has criticized the bill for its strict caps on the monthly installments that tenants would be allowed to pay under the plans, among other restrictions, which it said would hamper a landlord’s ability to pay its own expenses. That would result in a wave of property tax appeals by multifamily owners, the association argues, creating a calamity for municipalities.
The measure, which aims to “avoid mass evictions and widespread homelessness,” includes two repayment options, one of which would allow for monthly installments paid over the remainder of the lease that cannot exceed 10 percent the tenant’s income. The second would provide a tenant with six months to repay each months’ rent that was unpaid, whether in full or in part, during the state’s COVID-19 emergency period.
That period began March 9 and has been extended each month by executive order. The bill would also extend the state’s moratorium on evictions for an additional 60 days after the state of emergency is lifted.
During the hour-long address on Tuesday, Murphy addressed steps taken by his administration to fight the COVID-19 crisis, including prohibitions against evictions and utility cutoffs and rental assistance to nearly 20,000 individuals and families facing immediate challenges.
“We worked with our mortgage lenders to provide sensible and fair forbearance programs for homeowners struggling under the weight of COVID’s economic uncertainties,” Murphy said. “And we will continue to provide assistance to those who face eviction or foreclosure, and support for those who can’t make rent or mortgage payments due to COVID.”
Brogan noted that the NJAA has been calling for “meaningful, broad-based rental assistance since last March and has supported a bill sponsored by Senate President Stephen Sweeney and Sen. Brian Stack, which would have created a $100 million program to help low-, moderate- and middle-income renters. Murphy vetoed the bill in June.
“With the most recent federal relief package, the federal government has stepped up and New Jersey will receive rental assistance for primarily low-income communities,” Brogan said. “However, it is incumbent upon the state to augment that assistance with additional state funding that can provide help to the middle class in New Jersey. Just as private-sector businesses have had to reprioritize and reallocate resources, so too should state government.”
He reiterated the need for “meaningful rental assistance for low-, moderate- and middle-income New Jerseyans” in order to help tenants with past due rent, help landlords maintain their properties and avoid a major property tax shift to homeowners.
“New Jersey already has the highest property taxes in the nation,” Brogan said. “The Legislature should not pursue a policy like A4226 that will not only exacerbate that problem but would also fail to address the housing crisis we are trying to solve. It is our hope that the Governor will reconsider this policy recommendation and instead, work with property owners, tenants and homeowners toward a more equitable solution.”