WaterBill

Dangerous Bill Would Give Landlords the right to put water meters in your apartment and charge you separately for water and sewerage -- A landlord's dream and a tenant's nightmare!

November 10, 2008

Dear Tenant Friend,

On Thursday, November 13, 2008, the N.J. Assembly Environment and Solid Waste Committee is holding a hearing on bill # A-1628, sponsored by Assemblyman John McKeon (D-27). The bill is extremely dangerous to all tenants because it gives all landlords a new way to rip off tenants, while pretending to save the environment. (The hearing is at 2 pm in the State House Annex in Trenton, in Committee Room 9 on the 3rd floor.)

This bill is supposedly about saving water. What it's really about is putting more tenant dollars into the pockets of the landlord!

Here's how it would work. Your landlord would be allowed to install a water sub-meter inside your apartment at each point where water comes into the apartment. After you get used to these ugly things (I mean shiny new meters), the landlord will then start charging you separately for both water use and sewerage use (outgoing wastewater).

Don't ask me what sewer has to do with saving water. I don't know. Also, they get to charge a setup fee and a monthly administrative fee. These fees are just extra charges you never paid before that have nothing to do with conservation of water.

So the theory is if you pay separately for your water use, you'll use less water. Maybe. A little.

But the real reason for this is that landlords believe (correctly) that water rates and sewerage rates will be going up much faster than rents do, and they don't want to pay the higher rates. They want you, the tenant, to pay it for them.

If you live in a town with rent control, this state bill would overrule your rent control. Today, rent control laws do not allow this kind of thing. Your rent pays for all service provided, including water, and it can only go up what the law allows. If this law passes, your rent will still go up what the rent control law allows, but the separate water and sewer bills will go up much higher and faster. It's a rip-off!

To be fair, in rent controlled towns, there will be an initial rent reduction, but we don't think it's done in a fair manner (we got the landlords to agree to the idea of rent reduction, but the devil is always in the details).

Even in non-rent control towns, the idea is to fool new tenants into thinking they're going to pay a certain amount, ever so quietly noting that water and sewerage are separate, of course (and NOT specifying what they will cost). It's a rip-off!

Now let's take a closer look at who controls whether water is saved -- the landlord or the tenant? The tenant family uses what it needs. Maybe they can use a little less. That's it.

The landlord, on the other hand, is in charge of fixing leaks, the absolute biggest source of wasted water. If the landlord is not paying for the water any more, why would he or she care about how long it takes to fix a leak.

When water rates get really high, landlords will want to replace those old 5 gallon toilets with new 1.6 gallon toilets. But they won't want to do this if they don't pay for the water.

They'll also want to put in new low flow showerheads when the rates go up, but not if they don't have to pay for the water.

Some of this is mentioned in the bill (showerheads and fixing leaks, not toilets), but there is no real enforcement. For requirements like this to work, the enforcement has to be ironclad.

All in all, if this bill passes, we believe, in the long run, more water will be wasted because the landlords will find a way not to do their part.

Oh, yes, did I mention that the landlords wrote this bill?

Archive Press Release:

Date:November 10, 2008

To:Assembly Environment and Solid Waste Committee, Sponsors & Co-Sponsors

From:Matt Shapiro

Re:A-1628

The New Jersey Tenants Organization (NJTO) must oppose A-1628 in its current form, because it does not adequately address the concerns of tenants and is dangerous to the environment in the long run. We support the concept of water conservation. However, we oppose doing economic harm to tenants in the name of conservation, undermining local rent control, when the true objective is increasing landlord profits by decreasing their current and future expenses – by forcing tenants to pay for water use separately when it is currently included in the rent.

Adding separate sewerage use payments is adding insult to injury. It serves no purpose other than to fill landlords' pocketbooks (with dollars, not sewage).

Tenants in New Jersey pay nearly the highest rents in the country today, despite the existence of moderate rent control in nearly 120 municipalities. At the same time, our nation is now in the worst recession since the 1930s. Unemployment is rising each month, family incomes are falling, and "foreclosed" former homeowners are seeking affordable rentals. This is not a time to increase the cost of renting, which is exactly what this bill will do. Moreover, this additional rental cost will be much more burdensome to lower income tenants.

Furthermore, it is our contention that the landlord/owner has much more control over water conservation than the tenant. The greatest waste of water occurs when leaks are not repaired quickly and properly. The next greatest waste occurs when an old 5 gallon toilet is flushed. Then comes showerheads that are not "low flow." Finally, after these three major sources that are under the total control of the landlord, comes the efforts of individual tenants to use less water. It is possible that such efforts would be increased if tenants are billed separately for their usage. But such additional efforts would not save anywhere near the amount of water that would be saved by quick repair of leaks, replacement of 5 gallon toilets with new 1.6 gallon toilets (that actually work with one flush), and replacement of high flow showerheads with low flow showerheads.

Today, the landlord's incentive to repair and replace is based on his or her responsibility to pay the entire water bill for the building. In the future, that incentive will increase dramatically as water service rates rise to ever higher levels. When the rates are high enough, not only will landlords repair leaks quickly, they will also replace showerheads and toilets on their own and they will make sure that tenants have working cut-off valves to control large leaks until the plumber arrives. That will save water! But it will not happen if this bill is passed the way it is (including the proposed committee amendments).

Despite all of these misgivings, the NJTO feels that it is possible to craft a water sub-metering bill that is economically fair to the average tenant, while insuring that landlords have alternate incentives to quickly repair leaks and replace water wasting equipment. The incentives to landlords would, of necessity, be in the form of rigorously enforced penalties for lack of compliance. Without such penalties, and with their newly gained immunity from water price increases, the landlords will do next to nothing. Why should they?

It should be noted that many tenants would still object to any sub-metering of water, as this undermines their rights under local rent control, even if the average tenant would not be harmed. Those who tend to use more water will end up paying more, even under a completely fair approach.

We at the NJTO do not take this position because the potential for saving even a small amount of this precious resource, that is becoming more scarce as time passes, is reason enough to try to formulate a fair, effective water sub-metering bill.

Unfortunately, A-1628 was drafted by the landlords (NJ Apartment Association) and requires many changes before it can be transformed into a sub-metering law that is completely fair to the average tenant, causing no economic harm whatsoever to that average tenant, and yet strong and effective enough to cause landlords to maximize their conservation efforts, while tenants get the incentive to increase their conservation efforts, if that is possible for them.

Please beware that a poorly crafted law will not only cause great harm to the average tenant, but, in the long run, will cause less conservation of water by not absolutely forcing the landlords to repair and replace as they would have to do if they still paid the bill and rates rise dramatically.

In order for NJTO to support A-1628

1. Landlords pay for the cost of the meters and their installation. (addressed in the bill)

2. The "administrative fee" (Section 4.a.2) for the cost of billing, meter reading, etc. must be removed. The landlord must bear this cost, as it has nothing to do with conservation, and is simply an additional cost. The limitation to a $7.50 one time set-up fee and monthly service fee up to $4.00 (adjusted by inflation) does not change this at all. It is still an additional cost not related to conservation which would not be allowed by a rent control law. (If you read the language carefully, other reasonable fees could even be added which are not initial or monthly -- perhaps an annual tribute.)

3. Sewage charges must be removed from the bill. There is no reason for passing this cost on to tenants separately. The water cost is sufficient incentive for tenants to conserve as much as they can without adding this burden, and keeping the landlords paying for sewage makes it more likely for them to conserve. Furthermore, sewage charges to landlords are not necessarily even based on usage. It varies by municipality. This is harmful to tenants, undermines rent control, and is completely unnecessary to promote conservation. All references to "sewerage service" and "sewerage service charges" need to be removed throughout the bill (at least 11 references).

4. Tenants must be given a permanent decrease in rent which represents their proportionate share of the total average monthly water cost for the 12 months preceding meter installation. The language in Section 4.h.2 and Section 6 is insufficient to accomplish this.

The word "one-time" should be replaced by the word "permanent."

The words "when equal to the anticipated monthly charge for the water supply service charges or sewerage service charges, or both, as appropriate" should be replaced by "equal to the tenant's proportionate share of the owner's monthly water supply service charges for the 12 month period immediately preceding the installation of water meter(s). The Department of Community Affairs shall do a study to determine the average number of occupants for each size apartment, where size means the number of rooms in the apartment. The proportionate share attributable to a specific apartment size shall be the average number of occupants for that apartment size, as determined by the study, divided by the average number of occupants for the total of all apartments in the building, based on the size of each apartment and the average number of occupants for each size."

It is not the anticipated water charge that should form the basis of the rent reduction, but rather the existing water cost that is built into the rent. Hence the focus on the 12 months preceding meter installation. Basing the rent reduction on anticipated future use would also encourage tenants to use more water during the six month period of metering without charge, and would lead to erroneous results. Using average number of occupants for each apartment size would seem to be more fair than actual number of occupants, since future tenants in rent controlled communities without vacancy decontrol would likely have different sized families.

Our proposed wording for the rent reduction does not refer to sewerage service charges only because we assume such charges will be removed from the bill entirely.

Water charges due to rate increases above the maximum rent increase percentage must be paid for by the landlord, not the tenant. In this way, rent control would still apply to water charges*, just separately, and tenants would pay for their water use at rates that do not increase any faster than the rent does.

*Actually, the rent control % limitation would only apply to the water rate. Total charges would vary with the amount of water use.

The lack of reference to sewerage service charges is again based on the presumption that such charges will be removed from the bill entirely.

Landlords must be required to repair leaks within 24 hours of a verbal notification by the tenant, which is followed up by a written notification. If the landlord does not repair within 24 hours of a verbal leak report, then the tenant doesn't pay for the water use during any month in which the leak continues to exist. The language in Section 4.g. does not accomplish this. The changes in the amendments actually make the situation worse by requiring both verbal and written notification prior to the start of the 24 hour countdown.

There are three elements here:

A verbal report only should start the 24 hour countdown. A written report should follow the verbal report, but should be unrelated to the 24 hour requirement. A leak, especially a large one, is an emergency which should not wait for the U.S. mail. The 24 hour requirement becomes almost meaningless if written notice is required to trigger it.

The leak should not merely be responded to within 24 hours, but rather be repaired within 24 hours. The word "respond" in this subsection means almost nothing. A telephone call could be a response.

The penalty for lack of timely response is insufficient. The water charges for the entire month or months during which the leak continues to exist should be borne totally by the landlord. Nothing should be subtracted. Although this normally would mean the landlord is paying for more than the amount of water wasted, that is appropriate, since it is supposed to be a penalty and a strong incentive, not merely appropriate compensation.

7. Landlords must replace water wasting showerheads within two years and water wasting toilets within five years of meter installation, and non-functional cut-off valves within one year. Penalties must be established for lack of compliance. Section 4.i. addresses only showerheads, but not toilets or cut-off valves. No penalties are included.

Oversight mechanisms must be put into the bill to make sure that landlords meet their responsibilities. For example, there needs to be an inspection program to insure that the meters are accurately measuring tenant water use (and no one else's use, including the landlord's use). If a tenant suspects that the landlord is overcharging (because of improper metering, improper calculation, or improper water rates above the rent control limits), or not responding to leak complaints, or any other violation, there must be a government agency for the tenant to complain to, which will then investigate and enforce. Willful violations should be punishable by stiff fines.

Section 6 of the proposed amendments requires DCA to come up with regulations which would include some, but not all, of the oversight referred to above. We believe the oversight mechanisms should apply to all violations of the statutory requirements, not just some. What happens, for example, if the landlord replacement/inspection program is not complied with. Not only are no penalties provided but no process is established for complaints. There is also no mention of willful violation penalties.

Finally, the oversight mechanisms and all penalties should be in the bill itself. Waiting for non-specific regulatory mechanisms is inappropriate. Legislators should know how the law will be enforced before they vote on it, and the public has the right to know this vital information as well.

The meters must measure total tenant water use, not partial use followed by theoretical calculations.

The language in Section 4.a.1. is confusing and somewhat contradictory. It allows for measurement of partial use. It allows for "calculations" based on those measurements as an alternative. And the new language says a tenant cannot be charged more than the tenant's measured total service. What if what was measured was not total? Does measured, in this context, mean calculated? If the intent is to only allow tenants to be charged for the amount actually measured by the meter, where that measurement is of partial but not total use, then it should say that clearly, and the "calculation" option should be eliminated.

10.

The $25 late charge is excessive. An effective annual interest rate of 30% would be more appropriate. (adequately addressed in Section 4.a of proposed amendments)

11.

New (prospective) tenants must be given a 12 month history of water bills for the apartment and the number of occupants during that period, if the apartment was metered for at least 12 months prior to the initiation of the new tenancy. If the apartment was metered for fewer than 12 months prior to the new tenancy, then the above information must be given for as many months as possible. If the number of months of available metered information is less than 6 months, the new tenant shall not be charged for water until the renewal of his first lease, which shall not be less than six months in duration, and during which the tenant shall receive statements of water use and what the charges would have been. (We thought this was agreed to in concept, but it never made it into the bill or amendments.)

12.

The standards that the meters have to meet are vague at best, giving a choice of possible national associations, and even allowing an unspecified national association as the source of standards. Specific, well-recognized standards must be specified and enforced.

The language in Section 4.c. of the proposed amendments still allows a choice of 5 sets of standards, rather than requiring that they all be adhered to (should be "and" not "or") and does not permit DCA to enhance those standards. Furthermore, no penalties are provided for lack of compliance.

13.

It should be made clear in the bill that water service charges are not rent for the purpose of eviction proceedings.

14.

Section 5 of the proposed amendments would appear to grandfather all prior sub-metering and billing of water and/or sewerage use, as long as the practice was part of a written agreement.

It is ridiculous to retroactively permit a practice which violated existing law by not subjecting the owners to the requirements of this bill. The existence of a written agreement means nothing if that agreement violates the law.

This section should only apply to circumstances where the written agreements were in compliance with all municipal and state laws and regulations.

15.

The effective date of the law should not be immediate, but rather should be delayed in order to give DCA sufficient time to develop the rules and regulations necessary to implement it. 120 days? Consult DCA about sufficient time.

Clearly, A-1628 is not ready to be released from Committee. Much work needs to be done to make sure that it is not a destructive force both to the average tenant economically and to the environment.

A-1628 can be transformed into a bill that does no harm to the average tenant, makes landlords do what economics and scarcity would force them to do anyway without the bill, and opens up the possibility that the average tenant can save a little more by increasing their personal conservation efforts.