New Jersey’s “Good Cause” Law Faces Test

A limit for rent increases in New Jersey exists — it’s just undefined. A lawsuit in Hoboken could bring clarity to tenants and landlords alike.

Hoboken’s tenant lawyer filed a lawsuit on behalf of three families against luxury developer AvalonBay pertaining to rent hikes at Hoboken Avalon, Patch reported. The lawsuit, filed in June, has the support of the city, despite it not being a party in the case.

The lawsuit alleges the rent hikes facing the families at 800 Madison Street are too steep, in violation of both state and local law. The most notable of the examples is a single mother who has seen her rent spike from $3,900 to $5,826 in two years.

New Jersey’s guidelines against “unreasonable” rent increases has been a source of consternation for years. Without specifying a threshold, it has become widely accepted that the limit is around 25 percent, at which point tenants can withhold payments and take their grievances to court.

Hoboken has an even more restrictive law, limiting increases to 5 percent a year for most apartments that are either more than 30 years old or failed to get a state exemption. AvalonBay falls into the latter category, though it is challenging that designation.

The lawsuit alleges the single mother reluctantly agreed to pay the 15 percent increase from one year to the next, but then was saddled with a 26.9 percent year-over-year jump the next time her lease came up. If she didn’t agree to those terms, the landlord threatened to convert her to a month-to-month lease with an astronomical 87 percent rent increase, according to the lawsuit.

In a press release supportive of the lawsuit, Hoboken Mayor Ravi Bhalla said the case could “help set the standard through the courts to prevent unconscionable rent increases in Hoboken.”

Hoboken has been grappling with rent increases as the city sports some of the highest monthly payments in the country. The city considered filing an injunction in state court on behalf of the tenants at Hoboken Avalon before lending a helping hand with its legal counsel instead.

Good cause eviction, which has been bandied about in some form at both municipal and higher levels in New York in recent years, would protect a tenant from eviction under various circumstances, including if a landlord hikes rent beyond a certain threshold. Some of the drawbacks of good cause legislation, particularly for landlords, include the discouragement of upgrades and a potential return of vacancy decontrol.

— Holden Walter-Warner