05/28/2006
What happened to affordable housing?

Tenants at Marine View Plaza face possible 30-plus percent rent increase 
By Michael D. Mullins 

Residents at Marine View Plaza face a possible rent increase of more than 30 percent, after having had their rent raised 6.5 percent in 2005.

In a letter to the tenants, the Empire State Management Co. based out of Brooklyn New York, cited maintenance and financial debt as the primary reasons for the proposed increase.

The request is currently being considered by the New Jersey Housing and Mortgage Finance Agency (NJHMFA), who knocked down a similar request for a 33 percent increase the previous year when they found it was not needed and that the building could operate efficiently without it.

An additional 3.5 percent increase was approved, however, on July 29 of 2005 and became effective Sept. 1 of that year.

In August, Marine View's legal counsel sent a letter to the executive director of the NJHMFA, contesting the agency's decision. The matter was then forwarded to the Office of Administrative Law for a hearing.

Ten days after the owners challenged the agency's assessment the Tenant Association's counsel requested an OAL hearing and asserted the cumulative increase of 6.5 percent was too high and not warranted. The hearings are scheduled for July.

Tenant woes

"I'll live in the streets before I move back with my kids," said a 73-year-old tenant of 28 years in Marine View Plaza who refused to give her name out of fear of retribution from management. "I don't know what we're going to do. Do they want us out? Do they want to sell it as condos? What do they really want?"

Another anonymous senior said, "I'm 83 years old, a widow with a disability. I just can't afford any more increases."

Darcy Martinez, the president of the Tenant Association said that many of the residents fear retribution. "People are afraid to complain because the building's management is threatening and intimidating," Martinez said.

One tactic that tenants claim management uses against those who speak out is making them wait an extended period of time for repairs to their apartment.

Annette Illing, a community activist and Marine View tenant since 1977, said, "The owners are harassing us. It's all about greed with a capital G."

The tenants think that Empire State Management is trying to compete with the market rate, which has dramatically increased since the towers were built.

The purpose and the problem

In 1973 Empire State Management Co. received $12.7 million from the NJHMFA, a state agency that finances building developments that provide affordable housing for New Jersey residents. The result was Marine View Plaza. The massive complex stretches from Third to Fourth streets between Hudson and River Streets, consisting of two 25-story buildings and a multi-level garage.

In 1978, Marine View entered into a settlement with then-Parking Authority of Hoboken, a semi-autonomous city agency, which became the new owner of the parking garage. Three years ago, the city adapted an ordinance and took the Parking Authority over, subsequently changing its name to the Parking Utility of Hoboken.

In Empire's letter to the tenants, in which they explain the reason for the proposed rent increase, the company claims to owe approximately $1.97 million to the Parking Utility for accrued parking charges.

Empire also cites a whopping $10,960,380 bill stemming from a mortgage modification made in 1990. At the time, Empire was unable to pay the mortgage in full due to construction overruns and a slow rent up of the building. Rather than foreclose on the mortgage, NJHMFA and the owner agreed to defer these payments plus accrued interest until 2026.

The last fee that Empire claims to owe is a debt of slightly over $4 million to NJHMFA for funds used to finance the repair and replacement account, which the owner claims to have been depleted. NJHMFA cannot confirm this figure and has no record of any such debt to date.

Taking action

In a letter from Mayor David Roberts addressed to the building tenants whom he called his "neighbors," Roberts called the rent increase "exorbitant" and "not acceptable."

On Friday May 19, the mayor met with City Council members Theresa Castallano, Michael Russo, and Richard Del Boccio to discuss a strategy to petition the state and prevent this "outrageous action."

Roberts also contacted State Senate Majority Leader Bernard F. Kenny Jr. in an attempt to reach out to the NJHMFA and prevent the increase.

"We have done this successfully before and I am guardedly optimistic that we will do this again," wrote Roberts.

The Tenant Association plans to take the fight directly to the NJHMFA, if necessary.

Sean Darcy, a representative from the agency's Department of Community Affairs welcomes the meeting.

"We have met with tenants in the past regarding Marine View and will do so in the future upon request," Darcy said.