January 7, 2020

City Council of Jersey City

280 Grove Street, Room 202

Jersey City, New Jersey 07302

 
Dear Council Members:

 
The Liberty Board of Realtors continues to be concerned with some of the suggested announcements for amendments to Jersey City’s rent control and housing laws.   The real underlying problem in Jersey City is “gentrification” and local government’s failure to utilize the real estate tax revenue growth that accompanies gentrification to provide affordable housing for long-time residents.

Gentrification has been Hudson County’s unspoken success story for more than 150 years -- originally driven by immigration from around the world, and now by many new residents arriving from around the country.  Today’s young professionals, some being driven out of New York City by its short-sighted real estate policies, often earn 6-figure incomes as Finance and IT professionals and can afford to pay market rents or purchase a refurbished condominium.   In both cases, the City can realize higher property values and increased tax collection, and those higher taxes can provide housing programs for those longtime residents that need assistance. 

The Liberty Board of Realtors studied the impact on property taxes from condominium conversions of 2, 3 and 4-units’ multifamily buildings for the last few years, finding the amount of the total real estate taxes paid to Jersey City increased each year for these conversions and in 2019 by more than $2 million.  Prohibiting the conversion of these buildings would be denial of supply and demand, which shows that 2-4 family units are not as desirable to today’s market as luxury condominiums and rentals would cause a financial hardship for the present property owners and for the city.  Among the many negative financial consequences of prohibiting the conversion of these buildings would be increased tax appeals and reduced retirement assets for longtime residents.

This era is the opportunity for the City to use its popularity to capture the increased revenues and allocate them specifically for the creation of affordable housing.  The time is now – these transformational markets do not last forever, and the relocation of longtime residents is fast increasing.  Set-asides for affordable housing is not the answer as many longtime residents do not qualify under the affordability requirements and do not have the financial resources to rent at current market prices.

Any new housing regulations must include a discussion about how they affect the people we should care the most about – the people who have built the City and worked for the betterment of Jersey City during the city’s difficult period.

If we can be of any assistance, please do not hesitate to contact my office.

 
Sincerely,

Joseph W. Hottendorf,

Executive Vice President

Cc: The Honorable Mayor Steven Fulop

Cc: Robert Byrne, City Clerk