PROPERTY TAX SHIFT CREATED by “PEOPLE’S BILL” WILL DEVASTATE the MULTIFAMILY INDUSTRY and HOMEOWNERS in NEW JERSEY  

(MONROE TOWNSHIP, NJ) – The New Jersey Apartment Association (NJAA) opposes S-2340/A-4034/A-4226 (Singleton, Timberlake, Wimberly) which passed the Assembly today. The legislation restricts court actions, forces landlords and tenants into restrictive repayment agreements that could extend two and half years after the public health emergency is lifted and imposes draconian penalties on landlords.

David Brogan, Executive Director of the NJAA said, “No landlord wants to see mass evictions during, or at the end of this COVID-19 crisis; however, simply shifting the financial burden from one impacted group (tenants) to another impacted group (landlords), without providing any meaningful assistance for those landlords is not only bad public policy, it will create an unnecessary and devastating property tax increase for New Jersey homeowners. Furthermore, statutorily restricting rent revenue without compensation will bankrupt small landlords, and for larger landlords, it will lead to layoffs, less money being spent on maintenance and capital improvements, and financial obligations will not be able to be met.”

This legislation will have an impact on both state income tax revenue and local property tax revenues.

Specifically, while property tax appeals are expected due to this pandemic, this bill will expedite and exacerbate both the number and scope of those property tax appeals by landlords.

Because property taxes for apartments are based on net operating income, and this bill incentivizes the nonpayment of rent, it will directly affect the net operating income of those properties.  This will reduce the amount of property taxes paid by the industry.

Given that the apartment industry pays over $1 billion in property taxes each year, a reduction in property taxes paid by this industry will lead to a massive property tax shift onto homeowners.

Brogan said, “This legislation will exacerbate the financial hardship of rental property owners and will ultimately lead to a decline in property taxes paid by landlords to municipalities. Municipalities will have no choice but to look to homeowners to make up the difference. There is a way to protect tenants and help landlords while mitigating the impact on property taxes.  This bill isn’t it.”  Brogan went on to say, “If the Legislature wants to help the plight of tenants and thousands of landlords in New Jersey—what we need is meaningful financial assistance, not unfunded mandates that place the burden on hardworking taxpayers.”

The New Jersey Apartment Association members continue to work with affected tenants by creating alternate payment plans and waiving late fees. However, state and federal rental assistance for those impacted by COVID-19 is absolutely necessary to help tenants, landlords, municipalities and the entire multifamily ecosystem.

The New Jersey Apartment Association (NJAA) is the premier trade association representing all facets of the multifamily housing industry, including market rate and affordable housing owners, managers and developers, as well as suppliers. NJAA’s membership owns and manages over 220,000 apartments, providing quality housing to over one million New Jerseyans. 

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