Passaic has a plan to keep rents affordable while helping landlords fix up properties
PASSAIC — Keeping rents affordable is one of the city's goals for 2024, but just how will it do that without resorting to rent control?
Saying he's philosophically opposed to rent control laws and regulating rents, Mayor Hector Lora is looking to give incentives to keep property owners from price hikes.
Lora said he has a two-part plan that may help.
He wants to find grant money for owners to upgrade their rental properties, then not penalize them for the upgrades with tax assessment increases, he said.
The plan calls for property owners who provide affordable rents to access grants for upgrades without getting higher tax assessments as long as they don't add square footage to the properties. The second part would need state legislation that would not increase assessments on homes and buildings that undergo aesthetic changes.
"The idea is to stop swinging sticks and instead offer carrots," Lora said. "Landlords are allowed to make profits."
New Jersey property owners consistently pay the highest rates in the nation, Lora said. Add with recent federal tax code changes limiting state and local tax (SALT) deductions to $10,000, property owners should not be penalized for maintaining their homes.
The idea is not new, as Lora first presented it to the League of Municipalities in 2018.
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This month when he took over the post of vice president of the New Jersey Urban Mayors Association, he found some allies for his plan and hopes to move it forward.
"I would want this not to be just for cities, but for suburban towns as well," Lora said.
Different approach to affordable rent
Rather than base affordability on the tenant's ability to pay, Lora said, he wants to coax landlords to make improvements to their properties in exchange for keeping apartments affordable.
For Passaic, affordable monthly rents mean a cost of $1,215 to $1,579 for a one-bedroom apartment, $1,458 to $1,832 for a two-bedroom and $1,685 to $2,152 for a three-bedroom.
The affordable rent rates in Passaic are about $400 lower than the market rate.
Rent-assistance programs, such as the Emergency Rental Assistance Program, do help, but a 2023 Rutgers study found that although they are effective, they don't usually get into the hands of those in need. The mayor said his plan attacks the problem from a different approach. It would create a niche for landlords to improve their properties while encouraging them to keep rents affordable.
As the mayor of an urban city, Lora said he has an excess of people in need of rental assistance and a shortage of available units.
Why not rent control? Lora said those laws act as disincentives to apartment owners to maintain their properties.
A need for affordable housing
United Passaic Organization agrees there is a need for more affordable units.
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"The amount of rent our clients need for emergency rental assistance is astronomical," United Passaic Organization Executive Director Janelle Hall said.
Often owners are asking for $2,500 to $3,000 per month, she said.
"There is a tremendous need for affordable housing in the city of Passaic," she said. "Clients have come to UPO seeking assistance on locating affordable housing and are oftentimes forced to look outside Passaic to our neighboring towns."
This article originally appeared on NorthJersey.com: Passaic plan to keep rents affordable calls for incentives for owners
