Published May 20, 2021
By Ashley Balcerzak

A coalition of housing advocates is raising questions and concerns about a new bipartisan bill in negotiations that aims to prevent a tsunami of evictions once a COVID moratorium lifts.

Under the bill, landlords will not be allowed to evict certain low and middle-income tenants who missed rent payments during the COVID pandemic but can still sue them for the debt they accrued. Lawmakers originally intended to debate the bill for the first time in a public committee hearing set for Thursday, but it was removed from the schedule so legislators could "continue to work on the bill," Senate aides said.

To keep people housed as millions of New Jerseyans lost their jobs or income over the past year due to the pandemic, Gov. Phil Murphy signed an eviction and foreclosure moratorium, preventing people from being kicked out of their homes through mid-August even if they don't make payments.

But as COVID cases and hospitalizations decline, New Jersey leaders are grappling with how and when to end housing protections and avoid a sudden wave of evictions and foreclosures. Since April, landlords filed close to 62,000 eviction cases, according to the Administrative Office of the Courts.

The new bill sponsored by Sens. Brian Stack, Ron Rice and Teresa Ruiz, S3691/A5685, includes an additional $750 million in rental assistance and would end the eviction moratorium early on July 31, 2021, though this date could be pushed back to the beginning of next year.

It has backing from Republican sponsors, but many housing advocates express reservations and want to see amendments to the legislation, which doesn't address foreclosure protections that were included in an earlier bill, called the People's Bill.

That bill would have required landlords and tenants, and banks and homeowners to work out a repayment plan, but it faltered in the Senate amid landlord opposition after passing the Assembly.

Assemblywoman Britnee Timberlake, a sponsor of the new bill being hammered out, said lawmakers are negotiating central tenets of the bill.

"One of the major things that I would like to see changed about the bill is I don't think that it is fair for someone to have a judgment against them for debt that is owed," Timberlake said. "That's one of the things that is being debated currently, and we're all working together to hopefully work out and remove from the bill."

Staci Berger, president of the Housing and Community Development Network of New Jersey, a statewide association representing nonprofit housing groups, also has issues with the new bill.

"I think everybody wants to keep people safely and stably housed, so that part of it is good, but some parts of this bill could have tremendous unintended consequences," said Berger.

Meanwhile, the New Jersey Apartment Association, which represents landlords and developers, supported the evictions bill before a legislative committee passed a separate bill Tuesday extending the eviction moratorium through Jan. 1, 2022, along with other public emergency powers.

“I think that Sen. Stack worked hard to come to some middle ground by protecting tenants while understanding the plight of landlords," said executive director David Brogan. "We felt that the bill as originally drafted struck a good balance, but with A-5777, which extends the eviction moratorium until the end of the year, we are not sure what direction this bill (S3691) will go. As such, we can no longer support S3691 until we see amendments.”

With many aspects up in the air, here's more detail about what the bill — as introduced — would do:

How would this bill prevent evictions?

If tenants are late with rent, landlords currently have two options — sue to evict the renter in landlord-tenant court, and sue to recoup the missed the payments in civil court.

This bill takes away the option to evict renters if they missed rent payments between March 1, 2020 and July 31, 2021 and if they sign a form certifying income and noting they are late on payments.

Currently, 54,606 landlord-tenant cases are pending in New Jersey, according to the Administrative Office of the Courts. All late rent cases will be stayed and dismissed if tenants sign the certification under penalty of perjury. The Superior Court would return the fees paid to the landlords.

To qualify, tenants must make less than 120% of the area median income.

Check if you fall under the income limit here: https://www.huduser.gov/portal/datasets/il/il2021/select_Geography.odn.

Low- and middle-income renters could not be evicted through Aug. 31 if they pay at least half of their August rent, and moderate-income renters if they paid at least 75% of their August rent.

This protected time frame may change if lawmakers extend the eviction and foreclosure moratorium through Jan. 1, 2022, under a bill introduced Tuesday codifying certain public health emergency powers.

Landlords would, however, be able to pursue missed rent as "civil debt." Tenant lawyers say they have already seen a large uptick in these types of cases being filed.

Is there any rental assistance in the bill?
The bill offers around $750 million of grants, but advocates, lawmakers and staff offer seemingly different interpretations about how the money can be used. Timberlake and Senate staff said the grants would cover missed rent payments during the pandemic, but housing advocates read the bill as covering future rent payments.

In an NJ Advance Media op-ed, Sens. Stack and Rice write, "We must also help tenants who cannot afford their rent going forward. That is why our bill appropriates $750 million to fund an enhanced Eviction and Homelessness Prevention Program, which is targeted toward low- and moderate-income tenants."

The bill does include these details:

• For very-low income renters (making less than 30% of the area median income): A "deep subsidy" to help the family spend less than 40% of their income on rent
• For low-income renters (making between 30% and 50% of the area median income): A "shallow subsidy" to help the family spend less than 40% of their income on rent, but cost no more than $800 a month
• For moderate or middle-income renters (making between 50% and 120% of the area median income): A "flat monthly grant of $250" to help the family if they are paying more than 50% of their income on rent

The Legislature has not analyzed how much rent remains unpaid in the state, or how much assistance is needed to help everyone. The New Jersey Apartment Association estimates tenants owe $2 billion in back rent, while a November 2020 survey from the investment firm Stout predicted a $832 million shortfall by January 2021.

The bill says the Department of Community Affairs commissioner will provide guidance to help decide how long certain grants should extend and how much they should be worth. It's unclear how renters and landlords would apply for these funds.

These grants would be on top of the $353 million rental assistance lottery currently open.

Where is the money coming from?
It's unclear.

The state expects to collect an additional $272 million in rental assistance from the federal stimulus American Rescue Plan, and another $6 billion in direct federal aid, but it's not known whether the proposed rental assistance grant programs would meet the restrictions the federal money comes with.

"The funding from the federal government is tightly restricted, and this program appears to have higher income thresholds than what some of the money calls for," said Berger.

Will the eviction cases filed during the pandemic still hurt tenants?
Having a record of an eviction case can hurt a renter's ability to find a new place to live, as many landlords use credit background checks and disqualify candidates with a record.

The state Supreme Court is considering a rule change that would keep eviction records private unless a judge approved an eviction, protecting tenants who have cases against them but didn't end up getting kicked out of their homes.

The new bill bans landlords from sharing information about late payments to other landlords, debt collection firms or credit reporting agencies. Landlords would be banned from refusing to rent to someone based on cases during this time.

"As I read the bill, this provision would not affect the court records," said Gregory Diebold, director of litigation at Northeast New Jersey Legal Services. "Anyone can go on the court’s website and find out if there is any legal proceedings against a person."

What concerns do advocates have?

• Tenant protections should last a few months longer to give the state time to set up the grant program to help people pay their rent, said Matt Shapiro, president of the New Jersey Tenants Association.
• “We want to make sure that debt cannot be sold,” Berger said. “We don’t need people struggling to get off their feet to be mercilessly hunted down by debt collectors.”
• Tenants and landlords should have the option to work out a repayment plan, Berger said.
• “There have to be very strong guardrails in place to protect people’s credit scores, or people will never get on track to find or own a home,” said Beverly Brown Ruggia with the grassroots organization New Jersey Citizen Action
• “We’re concerned that the $750 million would be eaten up very quickly if landlords increase rents, which we expect is coming, so we’d like to see a rent freeze,” Berger said.