New Jersey Tenants Organization
Fort Lee, NJ 07024
June 16, 2020
Testimony in Support of A4226 with proposed amendments
Submitted to the Assembly Housing Committee
Thank you Chairman Wimberly and members of the Assembly Housing Committee for the opportunity to submit this written testimony.
The New Jersey Tenants Organization (NJTO) has been the voice of tenants in New Jersey for the last 51 years. I personally have been a part of that voice for only 48 of those years. I guess I’m a newcomer.
The current COVID-19 housing crisis is the most dire situation for tenants that I have seen in all my years of advocacy. Because of the stay-at-home order and required business closures, many thousands of tenants have lost their jobs. Some have already fallen behind in rent payments, and most others are about to as unemployment benefits terminate, no further stimulus benefits are on the horizon, and they have used up their meager savings. Over 400,000 tenant families could end up evicted unless something significant is done to prevent this tragedy.
None of this is the fault of the tenants. I say this because eviction is an extremely harsh penalty expedited by a very quick summary process in New Jersey, and the unstated assumption is that the tenant did something very wrong and is fully to blame for not paying the rent. If this was just about the money, and not about blaming tenants, why not treat unpaid rent like any other debt? The tenant would be liable for the rent money, and the creditor-landlord would have the same right as any other creditor to sue for the unpaid debt. But, no, the tenant is faced with the prospect of near immediate homelessness (and likely COVID-19 infection and perhaps death) instead of relentless debt collection. The tenant must have done something terrible to cause all of this and deserve such harsh punishment.
No. The tenants did nothing wrong. The tenants can’t pay the rent because of what the government did. The tenants’ loss of income is because the government stay-at-home order and business shut down order cost them their jobs. Yes, it’s the government’s fault. Not that the Governor and Legislature were wrong to shut down the economy. You did it to save everyone’s lives – tenants, landlords, homeowners, bankers, lawmakers – everyone. It had to be done. But the government action is responsible for this, not the tenants. And you must use your power to protect tenants from losing their homes because of it. There should be no evictions (not just no lockouts, but no eviction actions, judgments, settlements, etc.) until the tenant is reintegrated into the economy, is re-employed and able to pay rent, and the arrearage is repaid.
So we thank Assemblywoman Timberlake and support A4226 with significant amendments as the better of the two major bills proposed, the other being Senator Singleton’s S2340/A4034, for which we thank him.
We specifically support the amendments proposed by Connie Pascale and adopt his testimony in its entirety, as submitted today on behalf of himself and STEPS. Connie Pascale, a retired legal services attorney, has been a Board member of the NJTO for over 40 years, and is widely considered the state’s most knowledgeable expert on the rights of tenants.
The proposed amendments include:
• A fair process for establishing the repayment program, which is non-coercive, not landlord-centered or landlord-dictated, but rather includes a robust mediation program that ensures tenants are treated fairly and are fully informed of their rights. Such a process would also substantially reduce the avalanche of extended eviction cases that will surely occur otherwise, and which the court system is simply unprepared to deal with.
• A repayment formula that people just getting back to work, probably at lower salaries, can possibly afford. Plan B should simply be 5% of the monthly rent, not what amounts to an extremely punitive and unaffordable 16 2/3 %. Plan A, if used at all, should not refer to the lease term, as all leases must be renewed. It should simply be 10% of current monthly net income. And the actual amount should be the lower of the two or an even lower amount agreed to by tenant and landlord, all approved by the mediator and made part of a stipulation of settlement.
• Following the San Francisco model, no evictions for non-payment of rent which came due on or after the Health Emergency, through the end of the repayment period. Lawsuits for money owed and not paid in accordance with the repayment plan would be allowed, as with any other creditor, but no eviction actions. Any eviction actions for non-payment filed after the start of the Health Emergency to be dismissed and judgments and settlements voided.
• No rent increases, late fees, lawyers’ fees, or any other ways of increasing the rental obligation from the start of the Health Emergency to the end of the repayment period. Such increases and/or fees destroy the very notion that the repayment plan is affordable to a tenant struggling to reintegrate into the economy at a likely lower salary, while paying rent plus arrearage plus security deposit replenishment (which is not rent, but the tenant’s property, and should be limited to 2% of the monthly rent).
• Tenants should be given 180 days after the emergency is over, before repayment begins, not merely 60 days. Two months is just not enough time to get a job back that pays anything close to the tenant’s former salary. The economic recovery is going to be a very slow process. It won’t happen just because the shutdown ends. The effects will linger for many months, even without a resurgence of the virus.
• Landlords should be required to apply for mortgage forbearance (with repayments at the end of the mortgage) and any other benefits to which they are entitled, and tenants repayment obligation required to be reduced by their proportionate share of such expense reductions, as well as any payments made by them or for them to the landlord, or any other payments made to the landlord by anyone intended as relief. Such a lowering of the arrearage obligation would considerably shorten the repayment period, to the benefit of the landlord as well as the tenant.
These changes would help to keep tenants in their homes, not in the streets or overcrowded shelters, or doubled- or tripled-up family apartments. It would treat them as victims who desperately need help, not as perpetrators.
And while these proposals do not include rent forgiveness, a worthy concept, they do involve a sharing of the economic burden caused by this crisis among all elements of our society – tenants, who must still repay, landlords, who must wait while getting assistance, and mortgage holders, who also need to wait. In the end, all or most of the financial obligations will be met. It will just take time, and people’s lives won’t be destroyed in the process.
Please be part of this solution, and adopt the amendments and vote to release A4226, as amended, from committee.
Thank you again for the opportunity to provide this testimony.