Legislation aimed at helping New Jersey renters and landlords avoid evictions and foreclosures cleared the State Senate Budget and Appropriations Committee in a unanimous vote on June 22.
Update 10 p.m. : After the story was published, the bill was approved by the full State Senate and Assembly on June 24.
The bill (S 3691) would protect low- to middle-income households from residential evictions based on nonpayment or consistently late rent payments between March 2020 and August 2021.
Additionally, the measure would move eviction cases from landlord-tenant court to a small claims civil court “to prevent evictions and turn back-rent into civil debt that is paid off over time,” according to State Sens. Brian Stack (D-33), Ronald Rice (D-28) and M. Teresa Ruiz (D-29), the bill’s sponsors.
Help for Renters, Landlords
The lawmakers said that the coronavirus pandemic has been extremely hard on both renters and landlords, and that both need help getting back on their feet.
“Residents here in Newark and around the state were hit hard during the COVID-19 pandemic, resulting in unemployment and a loss of income for many. Tenants have been unable to make rent and will face eviction when the moratorium is lifted if there is not a plan in place,” Ruiz said in a joint press statement.
Ruiz added that many New Jerseyans are struggling to figure out how to make up for past rent payments as the state begins to reopen.
Eviction Prevention Program
The legislation would provide residents a means of rent assistance and eviction protection while allowing property owners to recover the money lost due to missed payments, according to Ruiz.
The bill would establish an “eviction prevention program” to supplement the COVID-19 Emergency Rental Assistance Program Phase II, which New Jersey’s Department of Community Affairs started in March. The senators said the program’s funding would come from $750 million in federal assistance, with $500 million going to rental assistance and the remaining $250 million going to utility assistance.
The legislation states that eviction protections would continue until Aug. 31 for those making over 80% of the area median income. The moratorium on evictions would last longer—through Dec. 31, 2021—for those with low and moderate incomes.
Millions of Renters Struggling
Renters nationwide are struggling more than a year after the COVID-19 pandemic began. According to Moody’s Analytics and the Urban Institute, an estimated 9.4 million U.S. renter households owed an average of $5,586 in back-rent, utilities and other bills as of January 2021. Countrywide back-rent debt is around $52.6 billion.
According to the New Jersey Apartment Association, tenants across the Garden State alone owe an estimated roughly $2 billion in back-rent. There are currently more than 60,000 eviction cases pending statewide and another 194,000 filings expected by 2022, the senators said in their press release.
Paying for utilities is proving a struggle for many New Jerseyans as well. The New Jersey Division of Rate Counsel estimates that close to 500,000 residential utility customers in debt are on the cusp of being disconnected from both their electricity and gas services.
State Sen. Rice, a Newark resident, said that a large majority of Newark residents are renters, and “a significant portion of that group was rent-burdened even before the pandemic started.”
Likewise, Rice said countless other cities and towns across the state have renters who are struggling.
“Simultaneously, I recognize many landlords are at risk of foreclosure or bankruptcy due to uncollected rent. Any loss of residential properties would be catastrophic to both tenants and the municipalities. This is why we introduced this bill we want to be decisive and prevent both evictions and foreclosures,” Rice said.
‘Some of the Hardest Times’
Likewise, State Sen. Stack said he has been trying to help his constituents through a year that has been “some of the hardest times in most people’s lives.”
“I’ve been desperately trying to help my constituents in Union City since the very beginning of the pandemic, and have heard first hand all that they have gone through,” Stack said. “We have to recognize that includes many landlords, especially those with only a few tenants, who are also struggling to pay their own bills. This is why we have to figure out a solution that helps both landlords and tenants to prevent mass evictions from occurring.”
Companion legislation (A 5685) is working its way through the Assembly.