Affordable housing enables Teaneck to keep the promise of equality and equitable treatment in our real estate markets. It furthers the objective of what Teaneck has always been about. Rent control does not. And I want to take a few moments to explain what the difference is.
From the time NECO and Fair Housing activists put out “Not for Sale” signs in response to blockbusting efforts, we’ve held true to the creed that everyone* deserves to live here and that we should be a town that creates the environment that allows people to move here and live here.
Affordable Housing creates a lower than market alternative for those unable to afford to live here due to market rates effectively pricing them out. All modern apartments must comply with affordable housing requirements. The affordable housing units are given only to those that can’t afford them otherwise and the processes in place ensures that ONLY those needing affordable housing receive it.
Rent control on the other hand has no means-test. It applies to a mere subset of units here in town and it has a lot of drawbacks. Make $250k a year? You get the benefits of rent control.
Meanwhile, rent control doesn’t even permit things like capital improvements to be fully recouped by owners and worse, from the standpoint of making apartments available to those that need it, rent control encourages people to stay in apartments long after their needs change, reducing the overall supply of housing available to others.
Think about that – if you add a bathroom or another floor to your house, your home value goes up. When you sell your house, the price you get will be higher. This enables equity to be created and kept by owners.
Rent control does the opposite. It’s like saying that you can only get, max, 2% more than you paid for your house per year, when you sell it – no matter how much work you do or what the markets say people would pay for your home. Houses would never change over and people would stop many updates, unless necessary.
We would NEVER stand for that as homeowners, but we say that it’s great for renters. Why?
The common answer is that renters can’t afford as much as home-owners, so this protects them. Yet, rent control doesn’t apply to apartments created after the 1973 (that’s NJ State law, btw, not Teaneck’s) and it has no controls to make sure that only people that need the benefit actually get it.
Meanwhile, because the value of an apartment is based on rents, and because real estate taxes are based on value, the effect of rent control is such that local taxes for apartments are artificially suppressed.
How much? Some estimates say that after rent control is removed, apartments appreciate as much as 45% higher. The amount apartments don’t pay in rent is then passed on to homeowners to pay, instead.
We’d do better, as a system of rent control, just taxing Teaneck residents and giving the money to affordable housing units, which only go to those that need it. Think about that.
So, this system, which applies only to old apartments and has prohibited any meaningful capital updates for decades has run its course.
It’s about time that apartments created before 1973 are treated the same as those created after.
And for those that moved here BECAUSE of rent control – well, don’t you worry. It won’t apply to your apartment until AFTER you leave. We understand that changing the rules for people living here already isn’t fair. So, we aren’t going to do that.
THAT is what Teaneck should be. And misguided comments about rent control by people with a minimalist grasp on economics shouldn’t have any place in the conversation.
But the best part is yet to come, because economics and market forces are a wonderful thing. And when improvements to buildings creates more real competition, pricing will have to meet demand. That means that while some prices will go up, the options will be better and overall costs will have a lot more competition – and if your goal is to make Teaneck an inclusive place for ALL to live, this is the way to keep fostering those ideals. And bear in mind, we are still committed, in word, deed and LAW, to affordable housing — 15% minimum for rental units and 20% minimum for for-sale units.
* Please note that some have argued that the town should illegally ensure that only people living here prior to construction should be eligible for affordable housing. The argument that “we got ours and others should be excluded” isn’t new, but for our town, which like many others in the 40’s and 50’s used that rationale to prohibit Blacks, Jews, Hispanics and others from moving in, it remains an odious reminder as to why the Fair Housing Act was created to ban such preferences. I will uphold those values during my tenure representing the people of Teaneck.