Passaic council adopts rent-stabilization ordinance capping annual increases at 3% and closing vacancy loophole

Passaic — The Passaic City Council voted unanimously on Sept. 2 to adopt a rent-stabilization ordinance that limits annual rent increases to 3% and closes a vacancy decontrol loophole that would otherwise allow larger rent bumps when units turn over.

The ordinance, introduced as proposed ordinance 24-94-25 and debated at length during a packed public hearing, passed on a roll call in which Councilmembers Monk, Love, Melo, Mayer, Garcia, Colombo Munoz and the Council President recorded “Yes.” Council President opened the hearing and said the city must act to protect residents facing rapid rent spikes.

The measure establishes a 3% cap on rent increases, maintains a registration requirement for landlords with the rent-leveling board, and preserves a set of exceptions: single-family homes and owner-occupied two-family homes are exempt, new construction built in the last 30 years is exempt, and the ordinance allows approved pass-throughs — including property tax increases — as well as hardship and capital-improvement applications that can raise permitted increases in specific cases.

Tenants and advocates urged the council to adopt the lower cap and vacancy control. "This is an important protection — a 3% cap with vacancy control is what we need to keep families in their homes," said Antonio of Make the Road New Jersey, who described household budgets strained by rent increases and security-deposit demands. Tenant lawyers and service providers, including a representative of Volunteer Lawyers for Justice, highlighted rising homelessness risk for veterans and survivors of domestic violence.

Landlords and property managers urged caution. Michael Kreitenberg, who said he manages multiple downtown buildings, warned that forbidding vacancy decontrol could discourage needed renovations and leave older housing stock undeveloped. "If you put $25,000 or $50,000 into a four-bedroom unit, why would you do that if your return is constrained?" one landlord asked during the hearing.

The mayor and members of the administration said the ordinance was developed with stakeholder input and includes a rent-leveling board to adjudicate individual hardship and capital-improvement requests. The mayor also said the city will monitor data on property values, development permits and tax assessments and reconvene the council if the ordinance produces adverse, citywide fiscal consequences.

The council also announced an ad hoc policy working group to monitor implementation and data and to consider refinements. The ordinance passed with immediate post-vote recess; the transcript did not specify the ordinance’s effective date.

What’s next: the ordinance authorizes the rent-leveling board process described in the law; the council said it will review outcomes and return to the issue if unintended negative impacts occur.