Jersey City Takes Aim At Landlords 'Colluding' On Rent Hikes
JERSEY CITY, NJ — A Jersey City councilman is taking action after ongoing investigations suggested that corporate landlords are using software to drive up rents, giving tenants few alternatives if the amounts go up at once.
The U.S. Justice Department is currently investigating the possibility of “collusion” among several corporate landlords nationwide, including some that happen to own apartment buildings in Jersey City and Hoboken.
In the last two years, the rents in both cities have become among the highest in the nation, but they may not be lawful for a number of reasons. (Read prior Patch reporting on this issue here.)
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This week, Downtown Jersey City Councilman James Solomon partnered with a local union, 32BJ-SEIU — which represents more than 175,000 service workers— to introduce an ordinance that will “ban rent-setting algorithms being used to drive up housing costs.”
Solomon’s resolution had the support of other council members and was passed unanimously at a City Council meeting Wednesday night. It must now go to a hearing and final vote at a subsequent meeting.
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Local And State Laws Govern Increases
Rental buildings in New Jersey are governed both by local and state laws about increases.
Older buildings in Jersey City are subject to the city’s rent control ordinance, which restricts the amount of annual increases. And by New Jersey law, all landlords must only give increases that are “reasonable and conscionable.” (Read more about that here.) However, the standard of what’s “conscionable” is murky, and it often falls to tenants to plead their case in eviction court. In addition, there have been recent debates over newer buildings that may fall under rent control as well.
In Hoboken and Jersey City, tenants have been telling local media that annual increases of 20 percent or more have threatened to uproot their families. READ MORE: Tenants Of Portside Towers Face Rent Control Hearing
Investigative news stories have determined that some corporate landlords were using software to set rent prices, instead of the market. This means that a tenant who can’t afford the rent increase in one building may have no alternatives, as other nearby buildings were also following the algorithm.
“It’s no secret that rents across the country, especially right here in Jersey City, are at untenable highs,” said Councilmember Solomon,lead sponsor of the resolution, this week. “But to know that this housing crisis was in part artificially created—that landlords and developers are
essentially colluding to jack up rent prices for everyone else—is a slap in the face. If rent-setting software has the power to rig the housing market for the wealthiest property managers in the country, then we as elected officials have a duty to take that power away and level the playing field for working families.”
“The skyrocketing rents and market distortions caused by algorithmic rent setting by proptech companies like RealPage and Yardi would be a
cause for alarm in the best of circumstances,” said Ana Maria Hill, NJ State Director for 32BJ SEIU. “That this is happening amid a housing crisis not just in Jersey City but across New Jersey and, indeed, the country, is intolerable.”
Jersey City Council President Joyce Watterman said, “The misuse of algorithmic systems by large landlords, as revealed by the FBI’s investigation into Realpage, has resulted in unfair rent increases and market distortions. This resolution is a necessary step to address these issues and protect
our residents from further exploitation.”
“The 32BJ Union consistently champions fair housing practices and worker rights,” said Councilmember-at-Large Amy DeGise. “Their
partnership with the council on this critical issue underscores their commitment to combating market distortions that harm our communities.”
“Being born and raised in Jersey City, I have witnessed firsthand the negative impact that high rents and lack of affordable housing have had
on our community,”said Councilmember-at-Large Daniel Rivera. “While Jersey City and New Jersey as a whole have been suffering from a
cost-of-living crisis, the increase of high rents has particularly affected most of our low- and moderate-income residents which makes it difficult to promote long-term economic stability across our city.”
“The rise of algorithms that prioritize profits that are detached from reality is not only exacerbating a housing crisis, but if left unchecked, will wreak havoc on families, their surrounding communities, and regional economics,” said council member Yousef Saleh.
Cities around North Jersey have come up with creative ways to help tenants. Here are five protections they’ve passed recently.
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