S630

An Act clarifying the application of the statutory exemption from local rent control ordinances, amending P.L.1987, c.183.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1987, c.153 (C. 2A:42-84.1) is amended to read as follows:

1. As used in this act:

a. "Completion of construction" means issuance of a certificate of occupancy pursuant to section 15 of the "State Uniform Construction Code Act," P.L. 1975, c. 217 (C. 52:27D-133);

b. "Constructed" means constructed, erected or converted but excludes rehabilitation of premises rented previously for residential purposes without an intervening use for other purposes for a period of at least two years prior to conversion. Mere vacancy shall not be considered an intervening use for the purposes of this subsection;

c. "Constructed after the effective date of this act" means constructed pursuant to a construction permit issued on or after the effective date of [this act] P.L.1987, c.153;

d. ["Constructed for senior citizens" means constructed under a governmental program restricting occupancy of at least 90% of the dwelling units to senior citizens and any members of their immediate households or their occupant surviving spouses, or constructed as a retirement subdivision or retirement community as defined in the "Retirement Community Full Disclosure Act," P.L. 1969, c. 215 (C. 45:22A-1 et seq.)] (deleted by amendment, P.L. , c. (C. ) (pending before the Legislature as this bill);

e. "Multiple dwelling" means any building or structure and land appurtenant thereto containing four or more dwelling units, other than a building containing dwelling units [constructed] reserved for occupation by senior citizens[, rented or offered for rent to four or more tenants or family units];

f. "Period of amortization" means the time during which the principal amount of the mortgage loan and interest thereon would be paid entirely through periodic payments, whether or not the term of the mortgage loan is for a shorter period concluding with a balloon payment; and

g. "Senior citizens" means persons [62] 55 years of age or older.

(cf: P.L.1987, c.153, s.1)

2. Section 2 of P.L.1987, c.153 (C. 2A:42-84.2) is amended to read as follows:

2. a. In any municipality which has enacted or which hereafter enacts a rent control or rent leveling ordinance, other than under the authority of P.L.1966, c.168 (C.2A:42-74 et seq.), those provisions of the ordinance which limit the periodic or regular increases in base rentals of dwelling units shall not apply to multiple dwellings constructed after the effective date of this act, for a period of time not to exceed the period of amortization of any initial mortgage loan obtained for the multiple dwelling, or for 30 years following completion of construction, whichever is less; provided, however, that any multiple dwelling in which occupancy is restricted to senior citizens as defined in section 1 of P.L.1987, c. 153 (C. 2A:42-84.1) shall not be exempt from the application of rent control or rent leveling ordinances.

b. In the event that there is no initial mortgage financing, the period of exemption from a rent control or rent leveling ordinance shall be 30 years from the completion of construction.

(cf:P.L.1999, c.291, s.1)

3. This act shall take effect immediately.

STATEMENT

This bill clarifies the Legislature’s intent in enacting P.L.1987, c.153, a law which provides an incentive to builders to develop rental housing by providing an exemption for such housing from local rent control ordinances. The bill also updates the age at which housing may be reserved for seniors, in line with federal regulations.

To protect senior citizen tenants, the Legislature provided in P.L.1987, c.153 “an exemption from the exemption” for rental housing that is reserved for occupancy by seniors, defined under the act as age 62 or older. Subsequent to the enactment of the statute, the federal “Fair Housing Act” was enacted, which prohibits discrimination in the sale or rental of housing based on age. However, if housing is exclusively marketed to seniors aged 55 or older, the federal law permits discrimination, on the basis that this group of individuals will likely be on fixed incomes, and thus deserving protection. Today, all housing must meet federal age discrimination guidelines, and violators are subject to penalties under civil rights laws.

In summary, in line with the intent of the Legislature in protecting seniors who live in municipalities with rent control ordinances, the bill aligns the statute with permissible federal age restrictions and clarifies the intent of the statute to provide an exemption from a rent control ordinance only to those buildings in which occupancy for seniors will not be reserved.