[Music] [Music] [Laughter] [Music] all right call this meeting up uh of the Highland Park rent control board to order uh first order of business uh statement of compliance with the open public meetings act um the meeting is called to order in accordance with the open public meetings act notice of this meeting was provided to the home News Tribune The Star Ledger and the Highland Park planet on January 23rd 2024 and was posted on the burough website at www.hpborrow.com and on the bulletin board at Bur hall2 21 South fth Avenue Highland Park has remained continuously posted as required by law all right uh so second order of business is the approval of the minutes from November uh 29th can I get a motion to approve so move second any uh any objections minut approved all right uh next order of business is uh selection of chairperson and selection selection of Vice chairperson so I had agreed to serve in this temporarily until we had a full board is that well that didn't happen and I uh we H I thought it was going to happen that's why I was on the agenda but the person who we had found has since stepped down I don't think it would be inappropriate to go ahead with it if you know you know I don't know how long it's going to take to fill and you know I would defer to you and the rest of the board as to what you want to do I don't disagree yeah what what spot are we trying to um alternate tenant alternate tenant I had some people because I had originally reached out to and I think lucenda did too did they fill out applications no because I they they were interested and then we knew that somebody else that there was somebody that was already talking to the mayor so so yeah feel free to reach back out and she'll reach out to them real quick and and know and and she usually interviews either on a zoom or a face to face real quick and you know do it that way all right we'll uh try to get it covered soon um all right so I Nom chair Vice chair I nominate Pierce for chair second okay any discussion I'm happy to continue facilitating especially because all the hard work of a chair the chair generally does actually meeting facilitator um yeah I'm happy to to continue doing that so uh all in favor all in favor I oose nay ions congratulations h HP is Ching the the HP board uh so we need a vice chair for that like to nominate lendo for this I'd like to nominate Jared and I was gonna go the other way Diane because I so we have a contested race VI chair who knew well I I will say that I will decline yeah I'm I like um honestly I I open kimono I think I'm going to do this uh be on the board for six more months or nine more months um until it kind of stabilizes and then I don't see myself continuing so I don't know if it's a viable place for me to to hopefully we can convince you to stay longer we'll set that aside for now'll find it less busy we'll table that one uh any other discussion on this all right declines Jared declines well so I guess motion motion to appoint uh the chair will entertain a motion until app Point lucenda as Vice chair I made the mo I guess I made the motion I mean I nominated you um all in favor I do we need a second or yeah we do need a second sure someone second okay all right thank all in favor I all oppose nay uh exensions I don't know what that vote was we had I I you voted I I all right eyes have it uh motion pass motion carries uh congratulations lucenda um right all right so um now onto our substantive issues we have old business from the last meeting which was uh the appeal um for the property on Dennison Street we had asked for more information in the last meeting and that has all been provided I do have print outs here if anybody wanted to flip through like okay this is I did look at it by the and the email email and then the images are here they're Group by maybe the attorney for Michael did you have any additional comments you wanted to open with or no I don't think I have any additional comments at this time okay that's a lot of color printing guys that was just me you guys pictures peeled a few trees sorry yeah are we to make add why don't you come up yep want to make some comment um oh those renaissant yeah those are comps I guess those are comps they provided these are the apartments yeah this is I saw those these are their property they got they printed weird but I there's nothing I can do about it the rents are on the back yeah I it so these are I don't think we saw those by email did we yeah no they were they were they were it's just you printed it it was there was not not much to be done yes these are lovely um so we'll take maybe comments from uh maybe we should thank you for the additional material we asked for a number of things and you responded to everything so thank you very much and I think the photographs of the various units uh are very helpful and I think um help us focus on the difference between some of them and how they look and how you hope they'll look than you maybe if you'd like to just summarize what additional material you submitted and maybe indicate based on that material what you think might be an appropriate resolution what you how would you would like to have the board move forward yes very briefly before you go I just wanted to say very briefly the income expense statement that was provided prior to the last hearing obviously had some expenses on it that probably shouldn't be attributable to the common building and should have probably been attributable to my client so we submitted a corrected income expense statement uh you see that uh in the photos that we submitted a lot of these uh two of these units have subsequently been rented since my client purchased the property and one of them was very very recently rented and and rented for I I I think my client could testify as to what they were rented for but these are I think my client's testimony last time was the the least renovated unit the least renovated unit was actually going for I think 1860 or 1840 I don't remember the exact number but it's uh I I think the rents that we're seeking are pretty much in line with what the fair market rent should be and actually a little bit less if you look at the comparable buildings that have provided and with that I would turn it over to my client to make any additional comments that he had um first I just like to Echo obviously what our our our attorney said um the exact figure um that it was that the least renovated unit was previously rented at was 1880 as of our last meeting on November 29th it's since been rented with a new tenant uh at 1985 um and a CO was done through that um with that said uh my wife and I left the last meeting uh and felt a certain type of way so we we wrote down some some thoughts um so first members of the board Mr schmir uh we first want to just thank you for allowing us another opportunity to speak um as a followup from the the November 29th hearing we appreciate your time and we hope that we can come to a solution today that is fair and is reasonable um I want to start by saying that my wife Jana and I left the November 29th hearing feeling pretty disrespected um during the hearing members of the board spoke down to laugh at and and mocked us members of the board scoffed and said things like do you know if there is a hardship or is there $6 million sitting in the bank that they can use or do you have $6 million laying around members of the board later went on to criticize our decision to purchase a multif family home in Highlands Park calling it and I quote a bad investment Not only was it highly inappropriate but in the spirit of setting a precedent which we heard is a common phrase throughout the last hearing this board is setting a precedent to Future landlords that the fate of their hardship might not be taken seriously especially if they're young adults or first-time landlords like us so while our documentation and our application presented gaps in information and I want to thank all of you for that the feedback was delivered in a way that was quite frankly pretty condescending to answer the question we are not sitting on anywhere near $6 million just like our tenants Jana and I have worked really hard we too were one student studying across the river at ruter we both received our undergrad from ruter I earned my masters from ruter gsse I taught religious school in New Brunswick for a number of years in an effort to give back to the community while in college we both worked full-time jobs volunteered for our local community with organizations right up the street like Elijah's promise play safe and New Brunswick we've served on boards and committees and panels just like every single one of you I've also been serving as an officer in the US Army for what will be 11 years in April with a tour overseas in 2019 we have worked and sacrificed a tremendous amount of our time and money to purchase our first investment property and even used the VA home loan to do so Above All Else Highland Park has always has been special to my family when Jana and I moved to Highland Park we actually became the fourth generation in my family to reside in Highland Park but simply purchasing this house was more than a business decision it was a decision to invest back into this community the same Community that's telling us that it might be okay to lose money each month at the hands of tenants who are exploiting a broken system I'm going to make the numbers really simple each month our mortgage statement which includes interest and taxes in principle is $ 6,483 19 for this year our average mon monthly PSG bill is $23.3 our average quarterly water sewer bill is $331 69 or $110 and 56 cents per month so in an average month this year we will pay $ 6,617 and 6 cents the rent for each of our units is as follows 23-1 is $1,626 23-2 $1,040 25-1 $1,985 and 25-2 $15 $54 for a total of $ 6,155 per month we are losing $426 every single month and that is before you accounts for a single penny toward a leaky faucet a burst pipe in the basement a boiler shutting off in the winter salt or snow removal cylic inspections every one two or five years whatever they may be or an aging roof forget about the actual Aesthetics which we would love to do for our tenants during the last hearing the tenants of 25-2 brought into question our timeliness a new lease agreement was presented to Nick and Michelle on November 16th we negotiated and very respectfully on both sides I might add and came to an agreement in writing to an increased rent amount of $1,954 up from $154 this conversation and the email exchange as well as the sharing of updated lease agreements all took place prior to the ordinance being introduced in past in a way we're subsidizing the housing for our tenants to live under this roof in only one unit are the tenants who are currently a graduate student earning a graduated student sement the rest of the tenants are working members of society just like all of us some working for the county and for the state where salaries and steps are public information while the board shared concern about opening the flood gates for other cases in the future we believe that our case should be heard independently based on the facts of our case and not based on whether or not it'll set a precedent if you want to set a precedent we should not be discouraging the purchasing of property in this town but rather inviting and welcoming homeowners to our neighborhood for the ordinance and the reason we're even here today the reason we're even able to sit in front of you and have this opportunity because the ordinance is literally called hardship and fair rate of return in increase we are both losing money each month and not receiving a fair rate of return so our question right back to you is how are we going to fairly increase rent so that we're operating at a fair rate of [Music] return all right I um I'm gonna go ahead and speak on behalf of uh the board that I I'm I do apologize if you felt um disrespected by the discussion that happened last time and I can assure you that we are taking this very seriously and we want to come um to a solution that it is um you know um both good for you and also doesn't uh risk displacing our graduate student Community they're on a fixed income just negotiated a decent raise but not one that uh you know allows for um you know huge increases uh in uh in their in their rents can I just say something to that fact we I'm saying it now because we say before and we brought this to supplement that um I feel that we're using the term um with the students I think it's just one unit that has maybe one student in it I don't think that that's a fair statement to say about all of our comments that they're all students because that's not the case and additionally um that very same unit and people that were referring to in tenants um we have an email exchange where they agreed that paying 19954 total rent they would be happy to sign that and that wouldn't based on their email um present them with the need to be displaced from their home so with that into consideration we do have that in um a copy of that if you'd like say that again you have a tenant that's agreed to new terms so the I'm sorry um prior to the um can you speak for me please words are gonna I think what J is referring to is uh if along the lines of of not wanting to displace any tenant we are fully aligned with that the tenants that are in question for that um in writing agreed to an amount that that they did believe was was fair and this was prior to the introduction of the introduction and passing of the ordinance so when we initially sent out lease agreements upon purchasing the property we went back and forth and negotiated an amount that would be reasonable we came to an agreement on that amount we back updated leasee agreements and all of that took place to the introduction and the passing of the ordinance in December that exchange is in writing uh so Jana is sharing that as a response to the argument of displacement of those tenants thank thank you for this and I will amend my previous statement to include displacing our graduate students and working class and I I want to go on record saying that Jana and I have zero intention doing anything that would displace anybody we're not trying to displace I think by the way the the I think the question came up during the last hearing was whether are you're looking just to get fair market rent which is kind of T Ted down to the question of whether you're looking to make a profit or whether there really is a hardship I think my client has pretty much uh set forth the uh the reasons why he believes that there is a substantial hardship in this instance where he's he's not making any money he's actually losing money each month maybe go ahead that's this is an interesting I I I didn't realize that you had had written agreements with tenants before or after the rent the rent Control Ordinance went in place anded how does that I that that to that to me is is very interesting that tenants in writing and the landlord negotiated a new rent increase and how does that take president over a rank control I mean it's I guess a tenant thing can go back and say oh no you I agreed to this but now the town is telling me I don't have to pay this anymore how this is interesting this is a written document legal document that says okay I'm willing to pay $1,954 and well this exchange was the end of 2022 right correct prior to the ordinance being in prior to the ordinance and did was and Reliance upon this was a a lease offered yes was a lease signed no there was a there was a delay in signature uh so I sent the updated agreement on December uh second uh and then there was back and forth in ensuring that the tenant was able to open the document and review it they responded that they were able to open it and review it I believe on on or about December 11th or 12th I followed up on December 22nd after I didn't hear back um and then um that at that time is when they informed us about the ordinance coming out right so boom our ordinance intervened correct any any written agreement okay so and and the discussion began in November we went we went back and forth in the negotiation leading up to this so I want to just be clear that the first time that we sent this agreement was more than 30 days the first time that we had approached them about an increase and and gone back and forth was more than 30 days because we wanted to be fair and we didn't say we didn't step in and say this is the new rent that we're in like we had conversations about it um Garrett had phone calls with um the tenants as well just to make sure that it was something that they could afford um to which in this response you know they're happy they would be happy to sign that that that came with a back and forth conversation and negotiation on what was a fair rent this is the unit that's currently at 1500 it's the lowest in 1504 it's not the lowest is40 okay and then one of and then another one of the more the or these the least renovated unit has the unit that is identical near identical to to the unit that we're discussing about the email is currently at 1626 however uh that's family members they're in attendance today I'm sure they'd be willing to testify if they needed to uh but they they they when they moved in they knew that that we were going to be coming before the board at this time so out of respect for the process we we put them at 1626 but they are willing I mean I can't speak but I believe they would be willing to testify that they knew a rent increase was coming beyond the the minimum amount J go ahead so I I'm I'm a landlord but I'm also he can attest that I was tough tough on him last time he was here but I also see both sides of it and I can see the landlord side here where he got a written and I know you can tell me that emails legal do document it's an agreement between two parties and it says we agreed to this rent monthly rent it was prior to the rent ordinance the rent ordance didn't go into effect till 30 days I know after something like this goes into effect it's usually 30 days until a r document they probably got and I can't speak to the tenant but it sounds like at least with this that um this sets precedent over rank control if whatever's agreed before rent control is put in place at least for this particular email when you agree to a rent with a tenant before any ordinance is put in place wouldn't this set pre this wouldn't this be binding it's not a contract I mean I think but I mean it's it's not like it's not nothing right written it's a contract I think so legally it's not a lease because nothing was signed before then we understand that so so that's comment a comment B however is the board should be looking for and the I think the tenants and the landlords are looking for what would be a fair and market rate rent for reasonable return so you could certainly give this agreement in December of 2022 which at that time if we had no ordinance coming along would have been accepted and probably followed up with with with the lease you can give that weight in terms of trying to determine what should be a fair market rent for these units forget percentages right now okay we can back into the percentage we can look at the 3.8 or whatever we normally allow and you can build on that to get to a fair rent but you could certainly consider this and give weight to the fact that the tenant who now occupies this is U two 152 yes right and that's occupied by Michelle and okay so you can give weight to this exchange whereby the landlord and the tenant had an agreement basically if if if this is not rebutted that this would be a fair rent for this particular property all right you can give weight to that not not legal agreement but you could certainly consider that in terms of trying to find out what's the fair market of rent for this unit work around because he's not going to like this but I looked at his expenses and well $6,600 $6,600 a month seems like a lot it's in line what Market expenses are for an apartment to operate an apartment now his rent and uh so plus r&m which can be zero never really is but could be zero doar a month or it could be $2,000 a month so you don't really know but his expense load is plus or minus um what rental comparable so I'm trying to look around and say then if his expenses are plus or minus what it cost to operate an apartment so then he has income here well the income here is that you know is that can we can we look at that and do we have to look at that as a well um the income doesn't cover his cost well there's a fixed amount that to to to operate Apartments not just in Highland Park in Addison everywhere plus or minus New Jersey it costs about the same to operate taxes are a little bit variable but roughly it's about the same so so I don't know particular particularly if and we this as a board we have to discuss if this is a hardship or there's a work around where we can say well we have another lease that somebody was theoretically going to sign that brings them up another $300 he has under Market rents obviously the the market has gone up significantly these are let's say they are under Market they are they're under market for two reasons one they're under Market uh well one large reason one one they were under Market two he hasn't he I think he hasn't given anybody an increase in years correct just add there we out of respect for this process we did not increase 22 into 23 or 23 into 24 sure so he has two years and 20 2022 had what a five or six% increase well what was it no it was four point something right the what was the what is what were but they didn't but they didn't do that in that year no we should we should write down because this is important what was the percent increase the of the board like had they had they done the the the maximum for 2023 was 4475 and what was this year 3.87 which totals uh 12 what 8.2% increase they so none of these rents have and this is this tennis don't want to know but it's compounded so it' be right I don't know what the compounding would be but one times 1.4 475 and then 8.5% so all of these rents would be the landlord hasn't recouped any of the rental increases and he's been held flat so there's so I'm not I don't know if if we we can sit here and say oh the the woman that was was here last time she's paying $140 and she's and yes it's $67 $800 below rent but she's legally in there and and and just because a landlord has an expense structure that's that's $6,600 a month which may seem high but it's not out of the ballpark okay so so we have to look at different ways at at tackling this rather than supposed will be a hardship I I think that and this is my we well we'll go through a proposal but I think that came up with a document that said a tenant agreed to pre pre the rent control uh ordinance that the lieutenant was going to pay 9.54 n 9554 and on top of that that would have been the that would have been the 4.48 that would have been a flat increase then a year year later now this tenant would have probably also got an increase of another 3.8% so whatever that is2 so for the $1,500 apartment had they T had they actually done the increase last year it would or it would be up this year to 16 162 it would be the 1954 by well no no I'm saying it for the like the $1,500 if we started there I could start there and if we started there and then did the 3.8 so 4475 ,28 okay and then now do you have any other documents that with tenants that agreed to other rent increases no because the other two tenants have turned over uh and then and with the other unit we did what was the what's the what's the rent now that that has the UN start the base R question yeah 154 okay so 154 so and that was their rent that was our that was their same rent you said you had increased in two years that was their same rent two years ago starting there so had you like not considering that that agreement had you like compounding that percentage increase from last year had you had you increased it by the 4.47 five and then also increased it again this year by the 3.8 you would you would be at 1626 is and so I think we should I think there's a really good point jar should consider I would go even further because take I want to be fair to both the landlord and the tenant in this situation so they tenant agreed to this in and then an ordinance came in that so in this particular case this tenant theoretically would have paid 1950 1950 all the way through 20123 and then gotten a rent increase of another 3.8% at the at after after the year end so that rent would be right now if a lease renewal would have gone to that 10 it be two 2,000 and you 28 2,119 would be what it 28 okay now what you could do with the other ones is say okay which ones did you are brand new leases or within a year which ones uh the only one within a year would be this one that just moved in January 1 of this year 1985 okay so that one just moved in when January 1 okay so that one is flat now I would say everybody else gets in uh a 88.2% increase right now which is what you had held flat for two years compounded by the the annual compounding because it's the four point and that's my recommendation and we can discuss it but so what what is it starting before we before we compound the two percentage you're saying we start where start with what they so they had agreed in 2022 flat everybody except for one person the new tenant has been flat for two years they had agreed to 19 19 the 1954 or whatever it was for the 2020 or 2023 sorry right into that so we wouldn't consider the 4475 in that year right would add just on top of that just 2023 2024 just just the 3.8 increase in we would not be able to implement the 4.7 because it wasn't in they or it was that was the agreement but then all the other leases except the one the on all the other leases let's give them the the 4475 plus the plus the 4 plus the 3.8 which is compounded compounded and then that's where does that get you my friend can we just real quick go through the there's four the four units and what the starting cost is now I just want to point out something you're we're we're specifically talking about unit 23-2 which is 1040 and if if you're saying okay well let's just give them the benefit of the uh 4.47 five plus a 3.8% we would have gotten that without asking for hardship well we can't apply it retroactively no no I'm what I'm saying is to just say okay well we'll give you the increase that you would have gotten under the rent leveling ordinance that's not really but you didn't but you can't apply retro held flat for two years you'll never you can't recoup that so we're now coming back to the table and saying well we'll give you that we'll let you raise the rents 10% on everybody it's a place to start the conversation I yeah what what I'm saying is that the hardship is just just increasingly by that percentage doesn't really doesn't really make up for the hardship R the rent for all four units you're you're you're offering something I'm I'm trying to come up and I know you're thinking I'm I'm not I don't mean to be aggressive or I don't mean to be able to say oh I'm trying to come up with something in the middle and what I think I my I tried to make my argument earlier which was that your expense load is not egregious of course so so what that means is if I look at your expenses on the property they're ballpark with comparable expenses of everybody else in New Jersey so how can you say you have a hardship when your expenses are so it's like when I can look at this in anything if if this person has is paying the same thing you are why is yours a hardship in mine not well you're making a tonal logical argument though because you're saying well your your rent is lower than everyone else's in other towns and but you have the same expenses as everyone else therefore you don't have a hardship rent slower know but In fairness and I know you hate when you're going to hate when I say this you have a when you buy a property you have a rent roll and you know the laws about how to increase 10 this this hardship wasn't in place and this wasn't in place neither neither was the rent ordinance when you could do this but but you you you kind of you go in knowing knowing how you can raise rents illegally and fairly and and and what you can get and so you you know your expense structure so and you know your rents so you you know you're going into this transaction with your eyes wide open so I'm sitting here saying as in a biased way because I do this for a living I I know what I'm getting into so I I and I I can't speak for the rest of the board but I'm saying I would recommend okay you came to us you would never have gotten this because this isn't this is now you're coming to us for your you have a hardship okay well you have you're going to be able to get this this tenant up we're going to we're possibly my recommendation is you go up $500 in this tenant retroactive not retro right now okay and then everybody else is getting a 10% Pop I can't help you with your 1040 tenant I can give them maybe a 10% increase but they're in there and they're in there until they move out or until until they until they move out or don't pay the rent you can evict them isn't that the point though of the hardship hearing is to say well we want more than what with the rent leveling ordinance would have normally authorized because my client didn't go into this transaction wise wide open he went into this without a rent leveling ordinance in place and surprised once but he got in there uh he had rent leveling ordinance if it wasn't for rent leveling ordinance I would have been able to go for a judge courtman and ask for What In fairness and I'm not I think I I do this every day I buy properties every day I know what you guys did you went in and you didn't give leases right away because you were going to you were waiting to give the pops so you didn't you didn't want to lock in the the original the original 3.8% there was there was a method to it and I actually would would respectfully disagree we actually picked up the phone we actually visited the apartments and and sat down with the tenants and spoke with them because they they indicated and we spoke openly about how they knew a rent increase was going to come because there was no ordinance in place right so it's almost like trying to Imagine A World Before Co try to imagine a world here before an ordinance was even in existence so of course they they they know oh new landlords are coming in my rent is probably going to go up so we actually took the domain approach went to their door picked up the phone and said hey we want to come to an agreement that we believe is fair and had conversations back and forth to get to that so we we did we did not delay anything and with an intention of popping them or whatever yeah and to say that well you didn't get the r 3.8% increase because he wanted to give him B pop but we didn't know that 3.8% increase because there was no 3.8% increase you're not giving us anything by saying that you're only giving us 10% can I hold up real quick um we have Pauline on stack so can we uh yeah um and then I put myself I'm here I'm hearing the both conversations and I don't need to be disrespectful but as a tenant Jared just they just discussed the 10% Plus the compounding so as a tenant if you go above that what's going to happen to the tenant and I hear you with the with it's a hardship and whatever but you I think you have to figure out something because the tenant cannot take all the Brun because you're not your numbers are not matching absolutely and I think that's what we attempted to do and came to a conclusion to do in 2022 so I'll add to this too I put myself on stack after this J brings up a good point um I think we also need to discuss with the board what how we're defining hardship here um because I you know Jared's uh clearly you know he's operationalizing this in a way that you know if the expenses are there uh and you knew you were getting into it it's not it's not a hardship in the same way that like nobody you know expected Co to happen and you know how we already agreed to everything that the world was a certain way and then something happened to that was unforeseen um to to cause this um but but I think and you're making the argument that actually this hardship was caused by the you know the plan that you had the business plan that you had did not imagine a world with this rent control ordinance in place and the the ordinance itself is actually causing this hardship and I think we should consider that I appreciate that I believe if we were able to continue the conversations with the tenants and come to an agreement I think this would have happened for all all the units and we would never be sitting here before you and by the way there's 625 municipalities New Jersey only a 100 of them have rent leveling ordinances what do we do in the other 525 towns that we don't we don't think about the tenant obviously think about the tenant but we don't we don't we don't say okay well we can't increase the rent because of the tenant at that point it's if the rent landlord gives a rent increase landlord could pick a percentage of rent increase whatever rent increase the landlord wants to pick and if the tenant doesn't want to pay it and the landlord brings the tenant to court for non-payment of the rent increase the the judge will determine if the rent increase being sought as unconscionable there's not we're not looking at a set percentage so this is a very unique scenario that we have in these 100 municipalities that have rent leveling ordinances where it kind of yes it favors the tenant a lot more than the market approach would and I think we have to take into consideration the timing too when you bought your property is not the same as those who had owned you know had were already either you know made made this kind of investment after the ordinance was in place or we're already at you know at some kind of equilibrium prior to uh the ordinance coming into go ahead D um aside from defining a hardship I think we need to Define it's rent control it's not rent leveling Highland Park wanted to have rent control that's a little different yeah I understand the term rent leveling is very often used in place of rent control and I understand they're different words but they I would add also defining Fair rate of return because this the Section 8 is is titled not just hardship increase but hardship and fair rate of return increase so what is considered what is the board considered a fair rate of return and I think but for that I think we have to go back to Jared's point that I know it was uh found to be um at least disrespectful but we also don't want to create an incentive for property the property prices to go up because it's sort of like we're we're we're having to you know the the I don't want to call it a bad investment but like it you know what this incentivizes then is for uh is for the you know property uh like absolutely and what we're selling we're selling these for it's like oh well you know it doesn't matter that this is above market rate because you'll get that fair rate of return will adjust to that you know that's absolutely right it's the other side too right because if you have multiple cases that are on the other end you're going to see less people want to purchase here you're gonna have a ton of inventory want to buy value is going to go down and tax are GNA go down so it's like can I oh uh Jared you're when you're up it's up so this is and I'm sorry that you guys happen to be the first that's what the it's like what is a hardship but you know again I'm doing this for a while and now I'm seeing and you guys so when you say precedent it's interesting because what happens in three six nine months a year 18 months when everybody's mortgages are going to be uh re refinanced and interest rates go up 250 2.5% or or 3% so everybody's new expense structure on a lot of multif family properties and apartment rental landlords is going to be up 20 30% now is that considered a hardship to because that was unforeseen circumstances by the federal government to raise rents to to so then that's going to kind of set ever a lot of homes and rents here here so theoretically and this isn't on these guys this is on what is considered a hardship and that really is what we should Define because uh the the there's going to be an interest rate wave and everybody knows there's a real estate sort of Quasi softening if you want to call it or crash or whatever the heck you want to call it that's going to be coming because of financing and interest rates so and so you could these guys have a different situation because they probably I didn't see their mortgage but their mortgage is probably they did it a couple years ago and it's probably pretty low and hopefully they've locked in for a long time but there's going to be a lot of landlords that haven't so what happens when other landlords come when they used to have a $6,600 annual or monthly expense load and now they have an $8,200 and they're and they're and they have some low rents that they were they were feeding along because they weren't going to evict a tenant that had been in there forever that was below Market but now that their expense load is up oh now I have some some tenants that have been there a long time that that are below market and they whose wages are sticky by the way I mean I'm hard to adjust these to interest but but one thing I learned from being a landlord with a lot of apart like I I I listen to a lot of stories about people I everybody has a story and you don't know whose story is who's lying through their who's being honest so you have to treat everybody we assume they're all being honest right yeah well you can't well you but you in the sense so you have to treat everybody the same and so we wanna we wanna it's I I we have to set a precedent and so it's really Define hardship and if we Define him these guys as having a hardship then that's great and then but we have to be careful when we do it because it'll open the door to other circumstances so even before we move forward with this and come up with you know ways to help these guys which they obviously are losing money I mean um uh they they will eventually make money on this property the way but but right now they're losing money obviously and and it's clear and then you obviously don't know that r&m is always a variable spense and it can be very costly so I I'm very aware of that um however they go going forward what happens when the the the the other two family landlords and the three familys come and their mortgage goes up right and which it will I guarantee there's a whole new we look at any doc look at any news or any Wall Street Journal now that it says so is that considered a hardship because in their $6,600 here that includes their mortgage payment and there's going to be a lot of other landlords that are going to have significantly High double mortgage payments of what they are now and is so what what constitutes a hardship is it just the do you include the mortgage do you break out all these costs and decide which is which is variable and which is not so it's it's we have to decide what a hardship is and then determine how to handle what is going on here so we just we discussed last time that to be to um adhere to the ordinance that that was actually to jar Point like step one is that they for eligibility for us to consider this you know or to consider uh allowing an increase you know above the the 3.8 um that we first had to like determine we have to first Define it and use that to determine the hardship that's a necessary but not sufficient cause of what you know we that then once we've we you know step two we can't decide what the increase would be until we established that they have to be perfectly fair I think increases in interest r actually would could cost it a hardship if it was unforeseen head drafting the ordinance where he has a percentage doing this year and year out um sometimes I've had years where like example Highland Park raised my taxes on I have four properties now raised my taxes on average 40% last year I I got one of the huge ones too I will break if I'm lucky if we're lucky this year we'll break even or lose a little money and then next year with our 3% increases we'll crawl back above board above water and we use reserves plus because we've been doing this a while so we kind of know kind of projected what it's going to cost so next year we're going to lose money in Highland Park okay and then maybe and then the year after that we'll make a 2% return maybe and then it it'll grow until the next assessment or I have to change another boiler or I have to spend $100,000 on roofs or whatever and then I and then I go back so So when you say there's a fixed return that is acceptable um I think that is actually zero we established that you're still building Equity even when sometimes it's Lev but who knows if you're building Equity because who knows where values are going to be in two years right so but so I don't know if it's even fair to say okay a x% double digit return is is a target return to give people and then try to hit that because there's too many variables you know right I don't think we want to set like a rate of return that we now decide that that's going to be the standard because anybody that's less than that even if it's just temporarily then that's going why then we then there's no point in having the rent Control Ordinance we just say here's your rate of return everybody calculate your rents you know like then you will and and and honestly and I'm not I'm not coming here with my properties and Highland Park and G I'm not going to ask for a an appeal but I I think and that's but I'm I'm thinking about it on all sides and saying well if if we look at this and we say okay he's not making any money so we're going to get him to his 12% that means this guy this rent goes up this what's going to stop everybody else that's looking at this or me from getting my lawyer to come here and sit here that's why the hardship part is important like determining the hardship in the sense that like it's not just like you know what are your your your uh your so it's Ledger right your cost and revenues it's really about them buying with a c with a like at a particular time the timing of it uh with a business plan that was then uh That Was Then disrupted by the passing of this ordinance right which for so that's not gonna be the case for every every landlord that comes in here that like um that this is but then but then that's fair and then that's fair so I I think you almost have to go back to to something that I recommended which is let him Inc let them increase the rents that almost 10% on everybody let let like I even calculated it like if everybody gets an 10% increase the tenant that was agreed to This n $2,000 almost rent plus next year's rent that it's $1,000 a month it's another $1,000 a month uh increase in income and that covers their at least their car that's 12,000 profit and that that covers and I that's my way to look at it and that covers in ,000 of r&m if they have $1,000 one month and they don't another month and they they can and then that gets them through this year and then every year they can raise the rents more somebody moves out and you can get it to Market can we look at that in dollar values the rates that or the the four maybe um the the the starting uh starting rent right now for the four properties and what Jared's proposal would get them to I went through it so the $1600 apartment gets it would get a a $136 increase so that goes up to what 17 okay I 17 can we just double check we got the right R I have different numbers than you just said so do you want to just walk us through the again yeah what are the four 1626 for 2131 is it 2131 I think it's 1626 1626 all right 2132 is 1040 1040 and two uh 151 is the one one that's the one we already got the increase last year that one out we don't need to consider that one 1985 19 that's 1985 so that was out if if if anything you're gonna say 3.8 on top of that but you know leave that Al They just they just still the lease so I'm not going to touch that one 25-2 is 1504 25-2 is what 154 1504 so you want 10% first uh first and then you want the last year's increase and this year's increase are we giving 10% comp I want I want the compounded ranking okay so so just compounded last year in this the 4.47 and then apply the three yeah and by the way I am I correct in assuming that this rent leveling ordinance or rate Control Ordinance uh has the same increase amount whether it's a net lease or a gross lease right so if so the 3.8% what how did we arrive at that what was the board's thinking and and when when when that when that was calculated why is it 3.8 is it it's the average between the Philadelphia and the New York CPI so CPI but so CPI doesn't give you doesn't compensate the landlord for increased expenses so if expenses are going up that's not what CPI is for if your expenses are staying exctly the same CPI is compensating it's essentially to keep us up with inflation yeah exactly it's supposed to compensate you for the lack of the loss of value of the dollar so that so if it's a net lease I understand giving a CPI increase if it's a gross lease you really need to give a little bit more than that and I understand you're for the tenants what what are but and is it different where you're paying sewer water yes sorry Matt sewer they're paying sewer water they're paying taxes these are all things that be broken out if it was a net lease and now you don't usually do that on a residential but I'm just saying that the 3.8% is not really you said you'll eventually profitable I don't know how it could eventually be profitable if if you're they're getting the CPI and they're not getting increased expenses that's the that's an argument against like the way we determine that the 3.8 is argument I may be so bold as to say can we not like mine amendments to the ordinance right now I think's what we've got I'm not try I'm not trying to make amendments to the ordance I'm just you want to give us some feedback at a later date and you know I'm just I'm just trying to I'm just hear me I I'm literally I I hear your story I'm trying to trying to generate you another $1,000 a month in rental increases to to help you your you know to to because your expenses you knew your rents you knew um you haven't uh there were below Market rents um there are below Market rents but um um I mean you I understand you've done everything you can to advocate for the tenants in this case but but on 2132 we I think 10 going 1040 and going a 10% up is probably just it's it's just not in line with what what a tenant should be paying for that unit I mean I pictures of the 2132 it's pretty good unit just look at 232 right now this is you got Pergo fors or is it hardwood or Pergo I mean this is like another unit you saw the comparable rents that we submitted they they're all going for 2,000 plus and I will will add for that but for that unit that is a single tenant living by herself and I think living by your is nowadays I think in my opinion considered a luxury and that comes at a cost typically and one of which frankly she's not paying so it it feels like we're like being taken advantage of here especially in that case and it's no that's the only one that I have a major concern can we go back to Matt I think was on stack I'm sorry I was just you know I'm just getting a little caught up here uh not having the last minut but can we just can can you remind me the two properties how many bedrooms there are each sure each each unit is two bed one bath I brought the original listing to validate that if needed uh so two bedroom one bath layouts are identical the property is side connected so it's one house split left and right so the only difference is mirroring each other other the two-bedroom one bath and then you rent amounts again or no no no thank you what was the increase that you got or the the dollar amount for the increase you got for the one property that you've already come to an agreement on we do what so I just the um the one that just changed yeah it was previously renting all of last year for 1880 1880 and then it went it's a new tenant the tenant changed and we rented it for 1985 1985 okay so um and and that so that's covering so that four uh$ 400 something dollar deficit that you're running um every month right now that's covering part of that right or is that considering we already added that up that's already considering that okay so what um if we if we give you retroactively what uh Jared actually the 4475 and the 3.8 compounded it only brings you up about $351 it brings the properties up to 1763 1127 and 1631 then you have this one right uh so what are we what I explain then um what exactly we're do this is honor the the terms of what they would so we want to honor that and give them the three I mean they can do the three well we we honor the they they don't get to retroactively get the 4.4 75 but the 3.8 yes no no they don't get they don't get the lost the historical payments the historical payments on it no no I mean the they're we're not going to give because they actually put this in place they wouldn't have done the 4475 they get they give them if they give them the the they would have signed this in in I guess December or January of 2023 22 22 January 21 January 23 December 22 Yeah so so and when When does the when is and the the increase so it wouldn't have effective in January so they have them sign a new lease for the 1954 uh plus the this 3.8% increase but the rest of them I gave the 4.7 the 4475 backward you know but we're not for that one I did run them if you want me to run through it um 1954 times 3.8% can we uh Terry's on sec I'm sorry I'll just and someone feel free to correct me if their numbers came out differently but so for 20 213- one which is 1626 um it come would you do both 4.4 and 3. oh wait is that 1763 right is that the new one I'm sorry now I've already confused myself yeah which one did you raise up to the whatever help if I went through it again with everyone yeah please each property sure 213- one is currently rented for 1626 okay has had no has had no in that's I think I have it now but so do you want to I'm happy to continue I just don't want no I was just confused if you want to finish go ahead put this one 19 okay yeah yeah uh so then 23-2 is currently rented at 104 with no increase in either going into 23 or going into 24 right 25-1 since the the introduction and passing of the ordinance has changed tency twice the first time and the last time that we met it was being rented at 1880 and is now currently rented at 1985 with a new fine with that and they are fine with that we're fine with that new tenants y fine and we're fine with that and we believe that that for the condition of that unit which is the least renovated unit who's this one that'll be the last one okay the condition of the unit that is at 1985 we believe is fair market value because that was our asking price and there was no 25-2 is currently at 1 154 and is the one that in they had agreed to the 1985 on that one too agreed to the 1954 oh uh in December of 22 with no increase the following had you actually had they uh oh for the 1985 when I did that for sorry because that's not considering um like it so had had we 1954 had we put the 1954 they' be up at 2028 I mean if they had they signed that at the time you could actually increase it this year to 2028 which would be a a big difference right and I think um if we think these are comparable units and you've already got the one to agree to that rate and the fact that they had agreed to something that was actually uh you know they would be paying uh much more had they signed that um at the time I think leveling that one out to 1985 with the other one would be um would be reasonable like so it's not the full 3.8 it's not the full 3.8 increase but it's HP I think it it's important to have a method rather than the problem I have with just saying oh you're this is your story it's not arbitrary no it but having oh you know um you you got you know the story is like they have a tenant that is paying 1040 and and then she told us that oh she's a single person there she should I don't I I don't I think it's important for us not to look at look at the the color behind it is as much as it look at it as a method okay we know they they came they're operating a loss we know that okay let's look at a method that we can stand behind to make that makes sense to us what's reasonable to not cram the tenants and help the landlord at the same time and not do it not do it ju like that's why I know I'm not bias to we do this the way that you uh proposed which I did for the first two the the 2131 and 2132 I did I just did the compounded thing that brings up to 1763 and 1127 the 1985 they've already taken care of for 2151 and for 2152 like it's not arbitrary to also set them at you know at 1985 but they I think that one it's uh we're you know that one they had agreed beforehand that they were G to 1954 you know could be paying I mean if we if we actually make them you know put it up to that amount plus the the 3.8 it would be 2028 is what we would be they said yeah what did you guys 2028 so and that that to me a huge increase though nominally and that's where it comes back to the tenants like that's that's a lot to hand but but In fairness to the landlord and and they haven't paid a rent increase in the last two years when everyone that's a renter and everyone that is is a homeowner and everyone that lives in New Jersey and in the country has paid 10 15 20% increases on everything they own across the board their expenses and these tenants haven't had a rent increase so so I don't I have to look at it from a landlord and a tenant standpoint I so there's got to be a fair Equitable way to do this and it's I think it's pretty rational he didn't he never gave they they never gave them an increase so they get an increase and this person uh had agreed to a rent that uh our ordinance came in and kashed and and and in kabash but so if the question is on that last one we could put the put it up to 1985 which is more than what they were would have paid last year but it's what you you know it's at least setting at the same level that the other unit uh the two 2151 would be at or we could for that last unit alternatively give them that plus the 3.8 agement yeah and so if we give them that plus the 3.8 that that again is the is you know $2,000 in 28 228 228 or yeah 2028 they're they're they're large increases but they're they're where they would have been anyway well and that person the fact that they've agreed to this we want we have concern for the tenants but the fact that they agreed to this means that this was a cost they were able to handle the cons aren't overly happy with this but the tenants would have been here anyway and the P would have been here anyway and this this at least puts the landlord above water slightly am I looking at this right though are you you're paying you're all in with insurance escrow everything you're paying 6,400 a month cor it's actually close to 65 yeah 6040 319 so in theory his you're saying your your monthly nut is 6600 if you if you're only adding to this 6483 my average there significantly more I'm only adding to that that 66 I shared it in my opening is only my psng bill and my water sewer bill I'm not talking about any of the other repairs more the I mean I don't know there's annual Highland Park registration inspection fees and all that stuff that are here there's thousands of dollars of of of fees so fixed sinks and bathtubs and drains and well that's I I have a proposal I want to see because we just working from what we've discussed and that considering that one unit what they had agreed to already plus the compounding on the others and the one that You' already have a agreement with um uh can I propose the numbers to you and see if this is is something that is acceptable and will cover at least get you out of the red right are yeah well I know I mean yeah it's on the agenda we're not no decisions to to public comment I'm ask them to approve it like this we have as a talking point I proposed something earlier and he said that that would be completely unaccept tell Diane I was trying so yes we do need to hear from the tenants still and we are but if based on if we follow everything that's been that Jared proposed plus um you know let's this part of it it' be 1763 for 2131 11 do we get the percentage of calculate that in Reverse but yeah um so 2131 would go from 1626 to 1763 that's just with the compounded compounded increases um 2132 would go from 1040 to 1127 it's two it's gonna be four 4475 Diane plus 3.8 but compounded not just added um 2151 is at 1985 you've agreed to that one and 2152 would go up to 2028 which would be had they had they sign it on what they had agreed to uh and then also you get the 3.8 for this year um that's that's what in terms of like nominal values what that looks like if we uh with the plan that Jared's proposed here by the way it's 9.4% 99.04% is the is with the compounding that's it's the way it works out the the only I I'm okay with all those numbers except for obviously 2132 I think with the three only given 3.8% increase or the 3 Point the 99% increase it's essentially going to leave the rents low into perpetuity because next year there's going to be another let's say 4% whatever whatever the number is you're never got to be able to catch up it's always percentage increases always make things more unequal not and and there's also and hear me I'm your name isett yeah here's a good point where um so pre and this is something the rent control board should should should take into consideration he has a tenant that play pays probably F 50% below Mark right theoretically plus or minus I don't know let's say right that 1040 Maybe maybe it's a $1900 unit maybe it's more I it doesn't matter it's plus or minus $1,900 $1,800 $2,000 okay so it's there's um what he could do as a landlord pre which he I don't know I I you know he was picking up the I don't know what your mindset was but an aggressive landlord and would have would have looked at this rent and immediately sent the tenant a lease for $1,800 $1,900 the tenant would have argued it the tenant would have then taken them to court and then a judge would have negotiated what that and you're you're you're a judge I don't know I have no idea if a judge would have said nope you're stuck with it Garrett um or a judge would have said uh yeah you're paying 1040 it depends on the day depends on the judge I don't know right but so so I don't know how to approach because he what you're saying is actually uh a harsher version of what we did we actually instead of coming in aggressive and saying Hey to Lori we we're going to go 18 or 1900 I picked up the phone Lori and I had multiple conversations where we went back and forth she shared her concern which is that is a significant increase I said okay let's go back and forth and let's talk about it together like we actually took what what we believe to be a very Humane and respectful approach right and we we weren't looking to to hike hike her up and you're you're you dude I get it you're you weren't you're not a you're they may not like you but coming from a landlord you're you're very you're I I used to be like that and then I have you real you could come in aggressive the problem is you can't you have to you have to treat everybody the same and you're going to get into trouble if you don't because because yeah everybody you have to treat every tenant the same because if you don't you can get in trouble you can get legally in trouble for purp all right we're the same 1985 no no no no but so so what I'm telling the board is he he their big concern is the 1040 which I understand because there's a lot of untapped income there however I don't know what to do because this if there wasn't rank control if it hadn't been there maybe he would have been still maybe he would have gotten that up maybe the tenant would have fought him in court we don't know but with the rent with the when we did the when we put the rent control board ordinance in it fixed it and made it permanent so he could not permanent that it was under Market under market and fixed it so I don't know how to rule on on the a 1040 it would have been discussed by a judge um and it would have gone back and forth unless he had pre-negotiate or he had settled before it went to court with the judge so before we have the discussion I think we also want to hear from the we have to give an opportunity for the tenants to speak again um Diane I just have one question was this the least improved apartment the 1040 the least improved unit which which I I I will obviously allow you guys to make that determination based on the photos but I think what we would all agree is the least improved unit is renting for 1985 which is the most right now wow and on those on those packets the 1040 is 23-2 and I put the apartment numbers in the top right corner can we see 23-2 as exra sets if you need them but with on one of the Departments pass that so kind so yes kind of kind of what was the but but what I think is what our what our hearings are becoming which actually makes more sense to me is landlords that were impacted based on our ordinance went that went place at particular time well this the one that has isn't that fair that's what we're talking about now because if he would have done this bought this a year earlier or a year later he would have already had Vis ability and taking action on his rents and if he would have bought it a year later he would have taken he would have taken action on his rents and he would have known where he was going and and how high so it was he bought it three months later two months later the rent ordinance got got put in place and his um rais to Market Mark to Market all rents got got got stopped and so that's where his hardship is so um it it is fair and I think our our adjustments are fair I just don't know how to treat the 1040 because it's like I don't know what a judge would do a idea what the judge would do the judge is going to look at five factors and the judge is going to the big one is going to be Market rent but obviously does does the increase shock the con ability of the Court uh what the other factor I mean there's a the relative bargaining positions the parties there's five factors that the Court's going to look at and then the judge is going to be determination as to whether the r saw as uncontable or not does anyone else need a set set of these exhibits is that of the uh photos for 232 okay I made extras so just in case um okay uh any other questions for the landlord so that we give an opportunity to hear from the uh the tenants before we start our deliberations that have sort of already started thank you thank you any oh any last um no I I guess I just want to I guess I'll close out to Jared's comment just by saying that our hope would not for it to have gone to court I I firmly believe with how well the conversations were going prior to the end of December we would have come to an agreement it probably wouldn't have been $1900 because that at that time for the4 for the th40 we probably would have gone back and forth and we would have settled somewhere just like we did with the the unit at 1954 and then after even after the ordinance or when it we found out about the ordinance gar could speak to Lori and said you know like if $18 $900 is too much what is fair like what can you do when it's like you know they have a proposal for that at that time I don't remember if we discuss it over the phone or or an email and I'm happy to go back and check check but some of the conversations were over the phone just or face to face I mean seeing the pictures I do agree that I mean that unit does look nicer than than the others the the 1985 is the go ahead what did you agree what what were you thinking um honestly I don't remember what the exact figures what would you propose like you were I mean the right thing to do as a landlord is go in and put whatever we think Market rent was me now we're talking over a year ago I don't know what would have been Fair we would have ultimately negotiated to some sort of Middle Ground just like we did the way the way it would have gone similar to how it did with Nick and Michelle which is I presented a number they said we believe that's high we both shared we both shared comps with each other and we came to an agreement you negotiate and we negotiated just like you know that yeah but you don't have a number we didn't have a number no I don't think I don't think we ever came to an exact number with with or's unit but I don't want to missp and but then so then this goes back to you guys when you created the ordinance uh in the spirit of the ordinance um you're you there are probably a significant number of tenants in town that pay significant market and is the ordinance is to resist the market because the market pushing highit sure absolutely so was this with the spirit of the ordinance it wasn't to protect the significantly was it to to help everybody even the significantly below Market rents and that that I guess could be a discussion too where you know like if you're paying 1040 does your regard obviously it's a hardship for you know their used to paying 1040 so but you're locked into to deficit for 8% increase a $30 increase you're never you're never leaving unless you move somewhere else right I wouldn't I I would never leave with that so so so did did the spirit of our rank control was it here to also protect people that that have these significant over low rents or I I I don't know should there be something like where you know they get a 15% or 20% increase every year to gradually kind of you know I don't know I just there has to be some open discussion as to more affable or maybe I don't know because the landlords have a fair have a fair point that that uh that they that the very below Mark rents are protected by this rent control I don't think that this I mean and I I agree here with this because I well on one hand I mean this you're not part of an affordable housing program you're not you're not getting a subsidy for this and we should have more of that in general everywhere more affordable housing available for people that can't afford you know for those that cannot afford the like Market rents right um I think the ordinance was not necessarily to to to do that to sort of implement um an affordable housing I mean keep it a affordable yes but not to not to not to do what you're saying which is to to to sort of lock in landlords at below market and an infinite deficit um when when they're renting properties they've been renting properties significantly um not just below Market but below you know below uh their it's below what their costs are right so um I think I think that's important to take in I I that's you know I don't think I think the ordinance is more to protect protect against the uh Market rates outpacing wages by you know a percentage that eventually just puts the whole working class out of you know out of housing so um I don't think I don't think it was to to to keep keep units that were already being rented at um you know well below what what they should have been uh to keep them there L go ahead but I was just going to say the the market rates that we're talking about they assume you know you know someone's making 9 $100,000 if if we're they don't do any assumption on yeah 30% then that's what we're assuming they're also and I know Jared said he had lots of units but uh I think that there's probably a risk pool in there where you have some some of the units might not make money and might lose money but you got to keep put yourself in my client position they only have these four units they're not they're not career landlords and we do want to take we said last time we do want to take that into consideration it's not the same as when you're able to to um withstand like you know minor shocks like a new boiler in one when you have you know a hundred units you can you can run it we know shocks like that will come we understand that that's feure the business but to start off at a like a severe in my opinion like I can tell you from my experience because I I started out doing two and four families in new bronzo and what I can tell you is the volatility of expenses and income on on them is huge one person moves out for two months or a month there's no income that month and there's a loss so you're it that's what I was trying to tell Ed with you really can't put a Target uh uh return on them you're you're the really and the Really the the Vol you're going to make two months you're going to lose money two months you'll make money and that and then you're got to do a roof then you got to renovate a unit and and you don't the the the money on the two and four is in the residual value it's it's not um there's not a there's not a steady income from from these units sure and and we understand that which is why we didn't even include that in the 66 number I gave you that's before I even talk about a new roof from 10 years or or or a boiler but if we stay at the rate that we're at now we're even like 3% raise on top of that think about when those things do happen then we're not we're not even I think that's part of the hardship determination is they can't pull risk in the same way that somebody who owns hundred unit can do like I have my own arguments against that like I started there and I didn't big business is better than small business like no it has nothing to do with small business big it has to do with that like y I think so and by the way you brought up baccy and credit loss I didn't I didn't factor that into the landlord's overall income picture but in a in a way that wouldn't be the worst thing if you did have a vacancy because then you could increase the rent but okay before uh so Paul's calling for this I think this is right I think we want to give in the interest of time and everything I think we've gotten unless you have anything else to say most of the info we need from you and I think we'd like to give an opportunity to hear from for the board to hear from the tenants again and for them to share whatever they like thank you and I'm gonna pass the gavel to lenda the vice chair while I run to the restro real quick those are all cleared you want us just take a two minute yeah actually can we do a two minute retest in between take a break stretch my T I may [Music] [Music] join and is that I think that is actually the best way for the hardship for people to come in is that it was the direct hardship associated with guys that the rent control winning at a certain time this is a unique situation whereas if it would have happened 18 months earlier they may not and they the rent they may not have bought the property or if it happened 18 months later they may not have bought the property so I I think that's that's that's the way we should look at all of these and that is really the hard sh and it's not you know it shouldn't be everybody this case won't make a precedent for any other because this is the one that came in when everything was in flux and unfortunately there's a small our landlord Chet law didn't used to reach down this far to four units it was only the bigger projects the Garden Apartments and the council thought that it shouldn't cover everyone to try to get protection and so it was it was a new thought a new idea to go down and to let everybody get Fair returns tenis get protected and this one kind of got caught in between I that's really what happen so I wouldn't worry about a precedent I think just work this one out and hopefully with a way that the TS can live with it the landlord can and move [Music] [Music] on need to do for there I think Terry after this is there anyone else in the queue after this hearing I have nothing on the fooks no nobody's approached me and submitted to me have three people watching okay quick com a quick comment we calls back to order I think next time we do this we're learning I think we'll make sure that we're limiting our uh our deliberations to to after so we do the questions with all everybody uh and then deliberate afterwards I I fear that we're getting into the discussion and working it out which is what paulan was trying to say before we've had the whole picture and I think it's important that and I will be careful to do that next time so I'm sorry to you that we we uh started sort of our deliberation before we heard from you but we will take into account everything that have to say today um reintroduce yourself to the board sure I'm Michelle Irving I'm in the 25-2 uh unit this is yeah Nick sh Le also in 25-2 I'm Lori SEL I'm the one tenant in 2132 sh yes okay I'm also tenant I'm in 23 uh-h oh good and your name Michael wolf Michael wolf family are you the family member I'm a family friend Oh I thought I'm the we're married yeah so we're should we take his testimony I'm sorry mik what unit are you in 23 sorry I need grab some more should we take since there he's in a different unit or they is he should we do them separate no they kind present a group last time no no well we'll listen to him after okay sure his partner's the same yeah just these guys right I'm back um I think maybe open it up the same way we did for the landlords which is there is there anything give you the floor first to add anything that you want to add they've been listening yeah yeah yeah we would like to speak to arent unit um which has been um a discussion tonight um I'd also just before we get into that um you know I appreciate everyone's time uh we came here in November and we're prepared to resolve this um you know we're here again we are both academics it is very challenging um he to give up going uh to speak uh in order to be here which is you know difficult for our career um I also just want to say that um comments of saying that tenants are exploiting the system earlier this evening and also saying that single being a single tenant is a luxury is also harmful and disrespectful um you know this isn't a situation it doesn't matter regardless how we feel about one another you know landlords are trying to protect their interests as tenants we are also trying to protect um you know keep her roof over our heads protect our interests and I just want to recognize there as a power um so as much as possible I think help sort of remove comments so I think speak to situation yeah I can speak a little bit to the context behind that 2152 the kind of Email exchange that we had in in December 2022 so it is true we did have this email exchange and we had negotiated in good faith uh we had been communicating with Garrett and very respectfully appreciated kind of his approach to that but the context was so I think Garett and J took possession in August of 2022 and ever since that time like pretty much right away we had been in touch to try to get um a one-year renewal lease because our lease had come up I ended kind of we had a notice to quit basically in August 2022 and we were put on a month to month that was not our decision we would have liked to have had a you know at leas that kind of coincided with academic calendars and we did ask for that we did ask for that and it took a couple months which okay fair enough maybe there's um you know stuff to get in place but the upshot of that is basically by the time that um the landlords that approached us with this was pretty much at the worst possible time for us I was defending my thesis like the week after we got this and then we're both Canadians so we had both already made plans to go back home for the holidays so we literally had three days by the time we got that lease to scope out any other options that we you know if we had an agreeed because it's a 30-day period right where when you're offered it you have to say yes or no I liter like the weekend before I defended my thesis we went down to Plainsboro to check out other options because we thought that what was being discussed was really going to strain our finances ultimately like we didn't have time to really find another option so that's why in fact we had agreed to I think it was like a six month lease we had looked at um we said you know given the constraints that we have like I have to defend my thesis we have to go home um that's the best we could do for six months and then honestly we were going to look at a place in Plainsboro elsewhere which meant Michelle py up to red car every day because like there was no other place that we could afford and so I think this is exactly getting at the situation of like what the red control is hopefully trying to prevent right is kind of the displacement of you working class and student tenants I as they mentioned I have since graduated but I still remain a postto and I can happily share my finances they're not that much better than a student and being paid 63,000 tax actually I'm employed by Boston University because that's the one job I could find so I have to go up to Boston once a month which is an extra th at least every year or every month that I have to pay so I'm pretty much making the same that I was making as a student if you account for that and um you know what the board is you know I've been discussing if if we are paying 1954 or above like that we're sure we strain our finances and I'm not sure how we would make into me with that um we had also like throughout the last year we had approached uh gar CH proactively to try to come up with a lease because we had been on month to month the whole time and we would have happily you know discussed our situation like we're both academics Michelle hopefully finish this year so we're not here for the long term like they have an opportunity once we leave to get that market right they're looking for and sure they'll be quite successful at that but you know it would be very disruptive for us if you know we kind of have that 30% or more increase the last few mons well we were trying to finish Up's trying to finish up for her PhD so um put that out there yeah additionally we were well that's like in an email um we were also working with recer um Legal Services because obviously we could not afford to obtain a lawyer throughout it so we were able to consult and she had indicated that unless Alisa signed you know we could have a conversation like we shouldn't be concerned um we knew you know we were informed at one point that this ordinance was going in we were heading home you know we had to exit January 1st first there no one could move our like we were not there there was no way we could return um so from our understanding legally from the services we could provide they said that that sort of exchange is fine as long as the lease was not signed we weren't 100% sure that the ordinance was going to go through so we waited to ensure it was um you know otherwise like whoa I don't know what we would have done um we were in another country um so that would have been really challenging for us to find a new place toore our things returned Etc um maybe I can speak uh on top of just that particular case just in general to kind of the new material that that we got over the the past week um so maybe just one more just like a procedural point or maybe suggestion for for future is that I think at the last board meeting we had uh with the board probably agreed to hopefully have any new material that we could reviewed for two weeks um and we had followed up a couple weeks ago and we only got the material week week I will admit I think I was slow to send it to you get it to us in in that time frame which which is fair and and I know the board is is busy but it just like it puts us on a tough spot right because we are trying to consult you know the legal representation we have through record that doesn't get us much time to really prepare response so just wanted to mention hopefully in the future there can be more time for tenants to to kind of review any new material um we tried to do the best we could with the material that was presented um there is more information now on the cost of landlords are bearing there still we didn't find any unless we didn't get everything we didn't find a new application or a new like cash flow analysis so again a lot of the same points we brought forward last time about the rent that they could have made the last two years just following the allowed rent increase the income they're getting presumably from the laundry because we're paying a lot there just in terms of weekly costs like none of that is factored in um and so we would appreciate having like some sort of like clear cash flow analysis that shows exactly not just not just their cost but also what are they making and factoring what they could have made already with the rent control allowable rent control increase again we had asked multiple times to be put on that kind of one year lease with the r control so um if they decided not to do it that's fair but you know that that was an opportunity they had without having to go the job process um there's also a few things in the cost again there's no amortization of inspection fee like we had asked last time um there's a lot of new expenses that we think are still onetime you cost so those are things that we would like you know to review if we were to look at exactly what the cash flow looks like and then the last point I wanted to bring up we kind of I think you guys have discussed it a little bit earlier but yeah the role of like what's the role of mortgage payments and the hardship um if I think from what I saw from the statement they provider they're paying you know 6% interest rates so if somebody purchase a house at 6% interest rates and then a year later somebody purchases it at 3% um and there similar properties like does that mean that one is a hardship and one is not and that the tenants that happen to live in a house that was purchased at 6% have to F pay a much higher you know rent increase than the ones that happen to be in the house that was purchased at 3% interest rate so again we would just like some clarity in terms of like what should be considered an hardship and what is part of kind of a business plan and um you know again I think the discussion around market rate and business plan is different than the discussion around control thank you again for your time um I would you know just kind of add a little bit more um I guess you you all receive photos of the of the apartment so as you can see like two two of the units are renovated or you know updated two are not um I I'm the the tenant one person and my unit is not one of the renovated ones um thank you for saying it it looks nice um I think a lot of that's because I I painted and tried to make it look nice but it's you know it's not um a updated they they did um you know like fix a a bathroom sink or so so that would be like the I guess the up the upgrade was a bathroom sink but in the time I've been there there um there hasn't been like Renovations or anything so um the hardship application and I you know of course we don't want them to be operating at a at a hardship um but it in my case it's asking for nearly 50% increase and as one tenant um that's not possible for one person to to make I wish I had an extra 50% month to give them but I don't so um you know I just kind of stressed that and and again when we we speak about comps I believe they submitted some comps of other units um a lot of them appeared to be like um more luxury or high-end apartments in the area um so you know we looked around a little bit at smaller like Mom and Pop uh units that were going up for rent on like Facebook Marketplace and things like that and we did did find some that we going for like as L as 1100 1200 in Brunswick Edison Somerset and I think we have some some photos that we wanted but um just just for clarity like it's not you know completely unreasonable um what what I'm paying because it it does exist I think you gotta be careful with going to different towns because rent in particular towns is is sometimes a function of the schools so people will pay more rent if their child wants to go and benefit from the the services of that town so I don't know if Edison or Brun just so obviously Highland Park is the best place to live um yeah please pass the phot around thank you for those L did you have more sorry um no that that was really it I think I think they covered it and maybe just one other thing in terms of like if we are the comparables are kind of um a relevant point in this discussion is again just to emphasize that you know there's a lot of amenities and a lot of the that G and J submitted that that we don't have even in the renovated unit so we don't have any fan above our so don't have any hand in the bathroom uh French doors don't Clos Tech technically what what I think they're claiming is the second bedroom in our or um they're what they're claiming as kind of second bedroom like in our leases is not our lease is listed as one bedroom um one kind of living room and then kitchen and bathroom and I think the reason for that is like those doors don't close so like even if we wanted to bring in somebody else's a roomate like there's no privacy there we have provided those like last as well that's still true no dishwasher yeah no dishwasher no so like I think there's a lot of those factors to that we should take into account in terms of what's considered even if we're talking about fair market rate let alone you know what should be aable increase we have um one more tenant too yeah I um reading from my phone that's perfectly fine thank you all for the opportunity here um there's no need to repeat Garrett's opening introduction to you all but I could say that I not only stand in agreement with his statement but that it was honest nobody is trying to do a workaround that was previously mentioned there has been very honorable not just to the tenants including myself but to the process created by the township which you all sit on right now and my wife and I by not increasing our rent until this process was complete that was the purpose of not increasing um by the the minimum rates last year in the year people moved from New Brunswick to Highland Park in a similar style unit with only one bedroom as opposed to our two-bedroom unit we now have paying 2250 and moved here significantly under market value because we had the opportunity of moving at 1626 which is a great deal under the knowledge that we were going to be Leed so we've been living without an increase for two years and quite frankly me and my wife love it but we understood that it's going to go up I understand that this board is not about a failed business model that it was previously called but the number also do not lie he's losing money month over month and he's losing a significant amount of money each month whether the board thinks it's agreed just or not the term bad investment keeps coming up and I find it interesting that G's good character in this situation is evident you are giving him an opportunity to raise 25-1 but he isn't because he doesn't think it's right you gave him I heard before you gave him an opportunity to raise 25-1 which is paying 198 something and he's not going to because he thinks it's fa market value for the condition that the units moving out to 213 D two frankly 1040 in middlex county for a two-bedroom unit down the street from Ruckers Robert with Johnson Hospital and major transportation to New York City is quite frankly insane I'm actually a little bit jealous if Garrett wasn't losing a significant amount of money due to paying due to low paying tenants including myself and wasn't struggling to pay the mortgage while taking care of a newborn baby then we probably wouldn't be here today because it could have been solved with a simple conversation that we previously we are sitting here due to a low rent I acknowledge I pay extremely rent at 1626 and we agree to increasing our rent to a fair market cap that's all I have thank you questions from board um my guess my first question was how uh for uh you all in 2131 or no 2152 right um was how long you plan to stay how like how close you were to finishing it sounds like you intend to defend the dissertation within a year though should add maybe a a margin around that um it took me 10 years uh but um and then and then you don't plan to stay after that so and that is an opportunity for I think we should also consider um consider that is that they once you leave they will be able to to bring that up um and of course just you know I think we understand that uh ing you know your your rent amount in the middle of a a school year can be difficult too um are you can I ask Michelle are you you have an assistant ship then that's your uh yeah this year I had to teach for The English Department so yes I'm not but you got an assistantship right they didn't make you have to a N9 month or 12 month contract uh I'm on a N9 month n month yeah yeah I don't get and we're happy to write something into like a future lease that says like just for this year because we are pretty confident we'll be able for one year and one year only type of thing okay and again we would have love to discuss this and Garrett has been very respectful in the discussions we've had we had kind of radio silence when we've more recently been you know approaching to try to come up with a one year lease so is it like legally I mean is it possible to write into a lease that this is a one-year deal and if you know if you stay beyond that that the would have to go because put a term in the Le ter in okay but that still doesn't negate the fact that he's losing money month to month I in everyone's situations I have my own situ everyone has situations I pay $500 a month in tolls to get to work just tolls not gas just to he's got a fa it doesn't that doesn't I'm I'm sorry and it sucks I was in very similar situations three years ago five years ago everyone has a situation and we've been delaying this for two years close to two years I was just the only reason we're delaying this is because we haven't been able to negotiate with you know we've again been very proactive and trying to reach out to to and J to come and we can't help it took a year for this to come into effect we had a meeting in November and it was postpone two more months which we two more I don't want to prolong the situation anymore I just so Lori um your apartment seems to be most complicated for I think for all of us how long have you I think it's been about six maybe close to seven years I don't have the exact um is there a have you you said you you were negotiating with Garett did you ever get close to something that goes on no I don't think we really negotiated any like I I recall getting an original um least to look over that was maybe like6 or $700 increase I don't I don't recall the exact figure and then I think he was going to go down $500 monthe but still it was I never you know accepted or said I could accept it at the time I really couldn't um but the ordinance had passed before the date we had to sign it so that's where that's where we are today I think that land Control Ordinance was put in place to protect P the hardship was put in place Am I Wrong to and now I'm seeing it more clearly I maybe I was Fuzzy before and it seems like two for the landlords that were impacted by the like he Garrett had a business plan I you know I'm not you know I take it back if it was a bad business plan or it was a business plan and he was executing a business plan the rent ordinance came into place and it put a kabash on his business plan um we have to look at the 1040 again is theoretically they would have if they couldn't come to an agreement he could have just crammed a lease at and said tough noes you're paying 1600 1700 if if she wanted to fight it she could go to court and a judge would have come up with an agreeable number that for both parties based on whatever I don't the five criteria so is that I don't how do we handle that do we become the judge and say what what like I don't even know I mean that's the purpose of this board right is for the exceptions to the ordinance and that's that's exactly it just realize um we do have some folks uh on so we should probably ask if anybody at home wanted to comment on this yeah let's uh um do we have any more questions sound like in deliberation yeah let's we'll have that discussion um with each I just wanted to remind you I I don't see Hands raised but we didn't ask either all right and also the questions from people here go ahead no I'm sorry I just so you you purchased the property in August of 2022 okay um and just going reason one of the Clauses in the ordinances you have to own for 12 months before the board see your which is part of that time and the reason it took a little bit of time between August when we purchased the home to actually get in contact with with the tenants Garrett he's in the military he had military orders and new to this we're still trying to figure out and we went in with the intention of making it an easygoing conversation not trying to bur anybody so we didn't think that we necessarily need to jump on it and raise ranks and not question we understand do we have more questions from the board for the tenants before we um just ask one more thing the pre your previous landlords um so everybody except except for you sir were existing sorry was was there an effort to raise to raise rents to the extent that seeing now she had a clause of she would rent raise the rent no more than 2% that was written in our lease year year for your as well I believe so there she didn't raise it every year um but by very small increment she did raise it throughout my time do you know why your unit was was a um I think just because I was one person and she knew that's you know that's what one person thought I could afford on my salary I don't really know the reason I don't want to speculate I think yeah like just to get more context on that like the the home before here bought it was a kind home and like when when we have looked at places when we first moved to Highland Park like one of the relevant decisions for us was that the criteria was that it was somebody who was a family home and she said you know she just wanted get tenants and she wanted tenants that would say long term so as opposed to maybe some of the other properties where we knew there might be increases so I understand like from um the landlord's point of view like right they have an investment and as you mentioned you don't necessarily want to kibos their business plan but also like as tenants we make decisions especially as grab students we make decisions not wanting to move for four or five years and something changes you know in the middle then that's also consideration for us as well [Music] so anyone else any last comments all right let's uh we'll uh um now move on to if there's anyone um on Zoom or anyone members of the public that want to to speak to this issue we'll give another opportunity for you to speak to in general to the board right at the end anyone at home please raise your hand on the zoom do you want to speak you like to [Music] hello hi everyone uh I've been just kind of out of here I'm a grad student at Rucker oh Michael Strawbridge I'm a grass ner Ruckers in the Poli Department I have absolutely no connection to this whatsoever I'm just a politics nerd I was bored riding my disc and I got we got an email blast about it so I was sure I was come watch why not and I came I could again because it's kind of entertaining um I guess like add a couple thoughts just around like the case in general that have kind of already been hinted at the first is that like I'm sympathetic to both sides here um and I also just think that you guys could not have a possible like you know worst guinea pig test with entire hardship concept like I think I've heard the phrase what is a hardship said so many times and I've yet to hear an answer in the two hearings about it yet and that's like the most concerning thing for me because I think like that's what makes it unfair to both sides here because it's like depending upon how you define it either side here could be right um and that's like because you guys brought the issue of like the precedent and ex Community as you know a grass student here I'm moving in five months I graduate so I'm done so I don't care in that way but knowing all the grass students here it does raise concern for me of like hypothetically weefine what they're going through as a hardship Le one right now that what prent that set then you said for the L move forward to that in that way there when I kind of like the idea being proposed before of this work around with the money behind the scenes not behind the scenes but you know this other way of transferring the money to then not Define hardship in this way because I think there's two issues of one finding fairness in terms of compensation for them and their own situation and then the hardship itself and my concern is that by trying to help them with defining hardship this way is going to hurt other tenants moving forward so it's like you have two separate issues you're trying to solve with one here and you can't do that if that makes sense and that's like really one of our main concerns I guess the other thing then regarding this hearing that I've been just kind of concerned with and I was wondering just like this protocol in general the right time or not but I was kind of just confused around like one side was very prepared for the first meeting and the other side wasn't and like how that then plays out in terms terms of like this felt like an entirely separate Hearing in in many ways it felt like we had one defense then and then one defense two months later um so I get you guys' complaints I hear you guys with the disrespect I'd probably be pretty hurt too if they're saying you know bad investment when it's like that's your money involved right now I'd be pretty pissed too but it's like I do think that some of that like commentary in the nature of this like case is by the fact that house been split up into almost two separate hearings where you have all the evidence in hearing one and what late November and all the evidence for case number two here in January now and like that raises the concern for protocol for me as well with that there so are two separate things the one's about being careful how you to find hardship because I feel like we're going to get ring on this case and still to have a defition of hardship I think we've all spent several hours down this room and I don't think any of us can agree on a defition hardship and that's concerning because then that goes beyond the parties of all here that's an issue for then any tenant and landlord in the H Park moving forward so like and I know the last you just said like you know you want to not be delayed any further and I feel like part of me suggesting to delay that even more because part of me is like I want a firm definition of hardship and that being like you know explain to everyone so I think if we had a clear def for hardship that might have influenced them even filing the application to begin with because they said hey we don't qualify if was XYZ uh so it's like part of me once a decision delayed until there is a firm definition delibera around hardship is here because I think that's fair to everyone because I think that lack of transparency is What's led to a lot of the kind of different arst taking place here right now so yeah thank you thank you thank you Michael anyone else come on up uh hi I'm Andrew goland I'm also a brad student over at rupter uh I wasn't here for the meeting a couple months ago uh but from my takea away from all this uh gar right you you seem like a great guy uh from uh living in this community you know I know as board members uh or council members uh we want people who live in our community to invest in the community so what he's doing seems great owning a property investing in it uh but as you mentioned uh owning property is an investment and there is risk associated with it just like the stock market Mar um it was definitely an extremely unfortunate time for things to happen uh but you know you're still building Equity uh what seems like a possible scenario that this route could go uh you know we want people in the community to invest in the community and not some suit sitting behind a desk in New York City you know so if there's some way that you know Highland Park can possibly you know to help upfront the costs of people who are still building you know in their rental working I'm not sure the word for it uh and then it slowly like taxed back over time to get recoup that you know investment that seems like a possible way to go but the way that it kind of sounds is that his hardship is not like something like Hurricane Sandy which is an extreme hardship which comes out of nowhere but the fact that he just isn't able to raise rents to account for you know other costs so that was kind of my take away from this so in how you're defining the hardship uh just really figuring that out like you were saying thank you Andrew others me check Zoom one more time uh no I don't see any hands up on zo all right so I think we should move on to deliberate this I would say that I think we do need to start with the definition of hardship um I think that it had it would have been great of course for the council to Define that for us but we I think it also makes it so that we can be flexible that if we decide I think we've mentioned already that un unforeseen circumstances are different than than just operating at a loss you know based on go ahead can I just real quickly and I know we didn't Define hardship but the uh I I wanted to point out the matter of Salem management company versus Township atong the court noted that rent Control ordinances should allow efficient landlords to obtain reasonable Returns on their Investments and then we also had the matter of Hutton Park Gardens versus Town Council West Orange sets forth that rent Control ordinances that fail to allow owners to uh realize profit must be deemed to atttend and so read to permit Property Owners to apply to the local administrative agencies which is what we're doing here to uh for for a ground for regulation that entitles the owner to a reasonable rate of return that that's and I know we still not defining hardship but I'm just saying that that the landlord in this case has a hardship in that he really has no no cushion at all he they the amount of money he's making on this building is actually less than the expenses and we're just talking about the fix fixed expenses without even talking about what what happens with vacancy and credit loss what happens with uh uh repairs there's no sinking fund at all there's no no reserves for replacement there is really nothing that allows the landlord to make any reasonable rate of return on this building and that's and and that to me is a hardship so let's um hypothetical here though let's say they got somebody to then buy the property for even I know there was 800 uh right 800k they get somebody to buy the property for a million dollars or or 1,200 uh thousand and then and then that landlord wants to raise them even more and more do we do we consider that a hardship then because somebody bought it at uh you know operating already that way I think I mean first of all we needed to find hardship it kind of uh regardless of any of this because that's what's in our ordinance right is to I understand I actually think there's a section of the ordinance uh that talks about the the evaluation of of a of a fair mortgage amount so assuming that our mortgage went through that a process that you guys would would get behind which I assume it did right it's uh it receives evaluation it receives uh you know an inspection it's it goes through this process and then I think part of the clause and the ordinance actually speaks to agreeing that the mortgage value or assess value is is is fair as a as a first point um and also to add to that like we mentioned earlier this case I think is very unique and different because we if another um investor comes into town and wants to buy a property they're going to look at their their possible rent role with the the increase the maximum amount of increase in mind and then that's an informed decision that they can make we didn't have that opportunity here so I think that's the definition of the hardship in our specific case and I I think kindly the hardship is probably supposed to be seen on a Case by case basis I think we're trying to overarch here but there's not going to be a case similar to ours and there's not going to be a case similar to the next month and I think you have to you know look into each case individually yeah I think that was the board's concern that if we give the increase in this case like 2132 and give a major increase from 1040 well what's to stop the next landlord for doing it the next landlord is not going to have the same situation as my clients they came in off a fundamental concept of capitalism is that everyone should have perfect information my clients went in with uh clearly not perfect information they they went in thinking that they could buy this building and raise that obviously not raise the rent to the point where they're going to create a massive profit but at least create create a decent uh a decent life for themselves yeah honest life for themselves and and they find out like a couple months after they buy the property no we can't do that either all right um I'm going moving forward uh thank you for all that by the way we talked about Market failures and the assumptions of capitalism today in my government business class I said exactly what you just said um I I think going forward we'll let the ten uh speak one more time but I think we've closed the question answer part we all the information that we just shared besides the court cases were things that we had already heard and I think we need to stick to deliberations here rather than one giant uh deliberation so um since we allowed one side to to speak one more time I'm going to I'm going to open the floor back up to the tenants and then I think we close it from there to not the close the meeting but keep the discussion uh within the board from moving forward I would just make the point again this is kind of with all the respect like I understand the landord situation of trying to make a profit and we're not not wishing them to lose money but also if you're making such a big investment like it's a different thing than you're tenant you're making such a big investment I would think it's also that's part of the research that should be done too is like what ordinances are coming through the town and and the second point I would make is is exactly what your HP which is like you might lose money one or two years right you're building gent said you're building and there's nothing when we leave in a year like are going to have really good market and like you might be able to make a lot of money that year so there's nothing on other side to say oh like the land is making too much money this year so we're going to reduce the land right so I think that has to be taken into consideration balances out over years it's not just one year especially not the first year of investment right and we don't we also don't reduce rents when tenants lose their jobs and suffer hardships I mean there are hardship programs as the government steps in but I think that's a good consideration all right back to so let's uh close um comments from uh from the public for now and uh maybe start working on these deliberations about the definition of hardship and determining whether this is go ahead jar so I think this is actually we're getting somewhere here andent over there uh we can Define hardship in this case and it it's a function of an ordinance was put in place um and landlords that were not were impacted directly based on a business plan that happened within a certain parameter uh certain time uh time frame or window that impacted them which this clearly did there's definitely some rents here that would have gone up um so my understanding as a landlord and and I'm not I'm trying to be as unbiased as I can the rent Control Ordinance went into place to protect tenants we're here to now listen to landlords that are impacted by this and and this they were definitely impacted by this and so they have a hardship the hardship was irrespective of their expenses they they they were growing and and I don't even know if it's important to know exactly $ five here or if they had to buy Windex for this or that knowing from a landlord they're paying $6,500 a month in Mortgage in insurance and amortization and then there's a lump there's plenty of r&m that goes into that property and so there's maybe $1,000 more a month in at least in expenses toward that property so there is a hardship and associated with that they were executing their business plan and our town ordinance impacted them and they I you know we have to assume that they did not know about it we have to I mean can't so we assume and so what was their impact and then so they have an a hardship and now we have to figure out how to make how to if we want to compensate them in some way to bring bring them closer to whole can I take a quick straw poll of because I think if we are going to try to make a decision tonight and step one is just deciding if there is a hardship and then step two is a decision of what a a fair amount looks like in terms of the the percentage on increase on top of what's allowable by the ordinance um can we get if the argument now on the table at this moment is that we need to Define hardship of course there are different definitions that we could use here um think that we've sort of made the point that uh the timing of it in this case makes it sort of unique and when they bought it and when the ordinance went into place and um the properties that were under you know being uh were already being rented far under Market that that was not you know part of their business plan to keep them that low um can we maybe try to make a decision on is this a hardship first before we decide on the on uh well I I think from the there really is as Michael's there's really no definition of hardship uh it's kind of like pornography as the Supreme Court said you'll know it when you see it so that's your job and that's really the difficult thing you have to go through I think if you take a look at section 27 it says landlords can come to the administrator and eventually to this board to with a hardship request and that has to be based upon a landlord who is unable to meet his or her mortgage payments expenses and maintenance cost or is operating at a loss is entitled to apply for a hardship increase and that would mean an increase in addition to the basic increase that you're allowed every every year that's as close as you're going to get to a definition of hardship there are probably two hardships that you're really struggling with one is this definition and whether or not this intervening ordinance which came in and this will be the only time you'll ever have to fortunately deal with this upset the business plan of a landlord who was buying property and was probably going to increase the rent in order to cover their nut that was probably the business plan and all of a sudden this ordinance jumped in and upset that plan and we've received now two sets of financial information and as Jared said certainly the new information you've given is is a lot clearer and eliminate some of the stuff that you even said whoops that shouldn't be in there and so on so I don't think there's any real question that the that the numbers that are coming in and the cost associated with running this building are running or this complex is running as a deficit I mean I don't think anybody could quarrel with that type of testimony I think even even the the the the tenants get that and feel that the other hardship is kind of the personal hardship the impact that an increase a substantial increase might have on Lori and the other tenants I mean that's a personal that's a real hardship don't get me wrong but it's not our hardship in terms of what the defines not to say you can't consider that again like pornography when you look at it you're going to have to decide how you evaluate those hardships on the decision that you're going to make and and I think clearly in this case the ordinance itself the timing of the ordinance did lead to the landlord haret I mean I think that's it's pretty clear from two nights worth of testimony and all the documents that you got they never anticipated being stuck with whatever the rents were in this building particularly the lower ones which people have become accustomed to and which they've allowed to float while we're trying to figure this thing out so there's some some credit should be given for that but the other side of it doesn't make it any easier if suddenly Lor's rent's going to go up $500 a month that's a hardship that's a hardship not a defined hardship that's a hardship so you've got to balance those things out when you come up with a per unit decision about what these folks can charge for their rental units thank you for that and and also for bringing pornography into the discussion tonight um uh so so they do and they clearly do meet this St lead the criteria that they're operating at a loss and certainly we don't just want to pass the hardship from the landlord to the tenant um can we take a just it's not a vote but a straw poll onp that he brought up a good point point and and I think we need to and it it'll help with this board going forward and that when I I brought up an argument that oh and one of the tenants did that the well if a mortgage goes up or down and the profits no it actually doesn't matter it it this is this one this hardship is purely a function that he bought a property and the rent board came in and created his hardship basically on that based on a a a frozen period of time where his mortgage was it doesn't landlords now can't just because they're not maybe they can but they're not we can argue that they they don't have a justification can't come to us if mortgage rates go up another three 3% oh I can't pay let's deal with that when we get there but but so so this is truly a hardship and it's not a function of a mortgage payment or right and it's Unique in the sense it's I think that what Ed said about the fact that this the timing of it it's not it's not precedential in the way that we're worried about in the sense that like this is not setting a rate for every other landlord to come in the timing of it was there what I was asking though is can we take a St do we all agree at least that um that that this is you know that that we should consider raising this that this does constitute a hardship and that we should consider raising this like now moving on to the discussion of how much it would be raised yes so I'll abstain uh so um can we can we uh can we now now that we've established that that we are going to consider consider this for an increase um let's talk about how we then what what where we want to calculate that Jared had already put a proposal on the table apartment by apartment so we'll take it apartment and and we can discuss so let's start with 2131 then this is the one that's currently at 1626 had they raised it had they ra had they taken had they raised it by the uh allowable amount by the ordinance over the last two years 4.47 five and 3.8 or 4.47 five uh in 2023 and 3.8 in 2024 that would bring them to 1763 at that point now what they're asking for is above that amount so I we can either consider giving them that which is allowing them to take ad like the advantage of one that they had wouldn't be able to at this point now which is the 2023 increase still weird to me to say 2024 um but uh so bring bringing it up to 1763 it would be allowing that sort of that retro retroactively applying uh the the ordinance um set amount um so 1763 starting point do we think that should be give them more than that on top of that or is that is that sufficient for this particular property do we want to look at the pictures of 2131 for again we're going to consider these apartment by apartment here is oh up there this one and all these all the tenants want 12 month leases is that correct mine have labels yours have the ones with staples have the apartments listed on the front Staples have on the back yeah so this one's two this one's 2152 2151 and 2132 set someone there's 2131 somewhere the one we're talking about oh be's got it I display them for every maybe just so we remember which one we're looking at you all want to see that again too all right discussion on 2131 starting uh well we don't have to start I propose that we start the start the negotiation or of this number at 1763 which would have been the amount it would be now had they taken advantage of compound with compounding sorry yeah that's $137 a month that's raise right right I just wanted to put that on the table so we could see it's 137 raise but that's uh that's 4.47 five and 3.8 compounded starting at 16 uh 16 this is how much they would have raised right but I'm saying $17 right right $137 to add to rent I wouldn't say that is a hardship for a tenant because it's 13 right so if we're starting there we may propose that we want to do more yeah yeah no I don't think it's egregious but I think it it's um what they were entitled to right right what they were entitled right so I feel I feel after two years right right after yeah that's what they're entitled to on that one that Diane's proposing that it doesn't need to be more than that that this is getting very close to a right it it's what what it should have been what it should have been yes that's of course they're asking for for an amount above that which is are they asking I mean I haven't heard that what are they asking for we have those from the first meeting I think the the yeah the requested we should take those into account from the original application yeah 2100 2100 all right so moving it 1626 if they had only taken the you know the allowable amount in the last two years 1626 would have moved would you know in 2024 be 1763 um and they were asking us to consider 2100 2100 discussion on that 1763 it's a fairly large discrepancy still between what the landlords are what their ask is and the the tenants where they are 30% right huh is is that a from 1626 to yeah for what it's worth um in Highland Park free rental Control Ordinance um we raise our rents on good years 4% and bad years two and a half% so roughly um they go up about 3 and a half% so you've never raised B more than not on occupied in place rents can you right so it's about three and a half% we never no we we nobody you don't push you don't you don't push the rents even on years like the co years when they were rents were going crazy so or post so um I don't why don't we why don't we keep why don't we take this 1763 and then just keep going through all of so we'll keep that like start with that one all right so let's move on to 2132 this is uh uh this is the lowest um currently the lowest one at 1040 uh if they had taken uh if they had if they had increased it by the allowable amount um in 2024 that would be 1127 what that comes up to 11:27 what was the how much what was the ask for yes you looking 1540 1540 so 112 the Gap actually is smaller there 1127 to 1540 it's $87 that's your number right 15 that's what you were after yeah we were only asking for 30 we want to go higher than 30% increase okay a $500 increase yeah which is no 50% that's a 50% $500 he said was that more than 30% yeah 50% 1040 to 1540 that one you know I have to say at this point I think Lucinda used to come to the meetings and say we need rent control because people are being raised 50% I think 50% in anybody's budget would be very difficult to WEA like it I mean right well that's the ask yeah that's the ask the ask is a 50% increase uh the what brings like bring them retroactively for last year and then with this year's increase 1127 um which you said was $87 right $87 I should be able to do that math but my brain is tired um what do we think well we're gonna go through all we're GNA we just we want the adjustments first okay uh two 2151 that's the one they've already negotiated yep and then 2152 start is starting at 1504 and with the allowable increases would bring it up to 6 1631 and they're asking 2100 and they're asking 2100 on that one I believe so right 2100 I can't do 154 plus 596 wait isn't this the family member no that was that one that was the first one we skipped that one that was 2151 this is 2152 this is we didn't skip that one1 is family number hp3 but 2151 is the one that you've already you already you already have an agreement we don't need to do anything with that 2100s correct for the last so are there two ask for 21 that's what they ask were yeah but 2151 we're not doing anything with because they've already there only three units three units now so 251 out out of the picture 215 yeah 2115 so the family member sorry I'm mistaken that that that's 21331 two uh back 2152 is increase from 1504 um the with the allowable increase would bring bring it up to 1631 so those are the three those are the three rents that we are under that we should we need to Deep dive into right and that brings that increases the dollar amount of their their monthly Revenue by $351 which doesn't cover their 400 whatever deficit that they're running right now on average um and I know there's going to be shocks to the system and all that so we all agree to that but like considering that's their average right now the actual deficit they're running it doesn't cover it but it gets them a lot closer no you're and I misunderstood their expenses what they provided us he provided us an Excel spreadsheet and it's every little every time you have to put a a blind on a wall it's 12 15 bucks and you got to hire someone to go and do it do it yourself he's got thou $1,000 $1,500 a month in r&m maintenance on the apartments maybe 750 in a bad in a good month so it all he's that 6600 that he's paying is just his mortgage and his insurance on his mortgage I mean at the beginning of the meeting when he in their presentation that was part of it he he gave us his deficit like as part of that the his monthly deficit as 400 and something that was only with mortgage interest utilities and then in my statement I just shared that that was before we discussed before we consider all this okay so considering that too that but again it doesn't even bring them to covering that that the it doesn't it doesn't even bring them up to covering just that part of it the mortgage I think let's talk about the 1040 and what's what's we've heard her we've heard him we've heard the landlord the tenant was fair there's extra 5% can we calculate that an extra 10% off the new price or off the yeah off the so 1127 is where we'd be starting from I think we all agree that retroactively applying at least the allowable amount is a fair starting point um for if we start 1127 what's an extra 5% of that and what's an extra 10% but but take into account that if he wanted to be a difficult landlord right he could take her to court sure and he could let a judge decide what is fair he can still do that if he can't and a judge can also can a judge to mediate as well to come to terms a judge can say get back to me in six months have something worked out but but does can now that rank control is in place that that overrides any type of any type of a judge will just say no there's rank control I don't want you can't raise it totally kashes his business plan well the the judge could take that into consideration when trying to figure out if it's a conable or uncontable rent well you know what I'm going have to tell you that if if a landlord seeks a rent increase in court that exceeds the what the rent leveling ordinance allows without without getting permission like here like with the hardship increase if we go to court with asking for an increase the larger the what you allow that's called Consumer Fraud I I wrote the State Bar association's article on rent rent control wall and rent increase law so I I'm pretty familiar with this stuff if I ask for rent increase I can only ask for what you guys approve his that's what I questioned was soon as we put a ren in place a lenord could never go to a court to try to argue that it's it's now it's governed by that's how I take it that's how I took it when I read the ordinance on my properties it's okay these are my fixed rents from now on why would it be fixed they get the they're fixed increases fix the limit but but that's anywhere I mean and so I mean you know it's only in R ORD well that's right but a landlord is going to be able is going to hopefully be able to forecast you know your you know the success of your investment by Future tenant turnover by by forecasting kind of how I mean when you purchase a property you know people are not commodity you have you have people humans you know who are living and have expenses and don't have control over who owns this property so that's I mean that's why you put the rent on well that's exactly so but I'm but I'm just saying it's like to the I want to make the point that this is an investment property that's exactly what it is it's a long-term investment are we is the board trying to make everyone whole and profitable now whole is one thing profitable is another thing agree agree agree right now because they will be profitable but this is more we know what direction everything we argu that this was a hardship because we put the ordinance in place at that particular and that'sa I think that I think that's something cons to consider I don't know if that would be a hardship but yeah I mean it's well that's but that's what's on stack I had a um a question did we hear that somebody is going to be moving those were the two graduate students that's 2152 that they're in 252 so we could bring theirs up I would propose bringing theirs up to 1631 which would retroactively with what it what it was and have put a provision in their contract that it's only for one more year that it would stay uh at that you know that at that level or whatever um or they would move out after a year or something like that you getting that 16 oh that that would be had they had they done the the ordinance raises or had they increased by four theyve so that's just putting the rent control that's putting the rent control ordin they haven't they haven't raised them at all in two years retroactively applying the the amount we allow so after one year the rent leveling ordinance would not apply to that unit what after one year the r leveling would not apply no no no that they that they're moving that they after a year or whatever we talked about a provision earlier what was it you know we could sorry but my point wasn't they're moving after a year or whatever my point is if they're moving out he has the landlord has grounds to recover he he at that point contr right so I'm saying we cannot be we can't be all things to all people mean he's going to have instances where he can come up with people leaving and com in and whatever so in in our transactions and In fairness to both parties we need to know that he will be able to break even at some point in that regard so I I just wanted to put that on I mean any investment in real estate at this point is going to eventually be very profitable in terms of the equity they built in the value of the property so was just my point not whether not making a provision for the ones that right will be moving out in a year or whatever but just knowing In fairness to the tenants that he he's going to have to Le way to come further than he's he is now or whatever so I would propose to start with these knocking him out one at a time and not necess in order that for 2152 which is uh the the ones that will be probably be moving out they're finishing graduate school one's already working in Boston right so there's he's the landord will have an opportunity in the in the in the in the near future to 12 months 12 months in 12 in 12 months to make it profitable and that and that even there may be operating at a loss but they're building equity and the value of the property is probably going up overall I would propose that we just for the year increase it to retroactively apply the with the allowable increases bringing it up to 1631 and and and leave it there um do I need to make can I make a motion as we go through these one by one or do we have to well I don't I you can I why don't we because I'm going to why we consider them one by one say might change how you feel right okay well we don't have to vote we can always go back but like does that sound let me give you a proposal a counter proposal they agreed to 195 54 you say 1763 16311 split the difference because they agreed before the rent ordinance to 19 how about we split the difference between the original that and what they're asking for which is 1504 I'm for the the landlord now regardless they they were they were going to pay 1954 and then all of a sudden the rent ordinance came in and then they held off right so that's a counter proposal so so split the difference between the like make it 1850 or something like that then then you know what I mean that what percentage increase is 1850 over 15 1504 though that's a pretty that's a little Hefty that's a he were going to pay it they were going to pay it wait but they were relying on rent control to protect them right but they no that's not they they didn't know about R pressure they were yeah but I mean they did wait for rent control because protect okay I I i' uh what what is it it comes to if you go off from 1504 to um 18 whatever you just said I just put it in 23% from where they are right now 23 to the 194 no no to what Jared the split the baby but what's oh and the other one the other way Carrie is only brings them up $137 is that correct the 1631 you're say y yes so one increase would be $137 your increase would be I can't Jared what was your original number because I I went off are you at 1954 he wants to split the but split the difference between what they're paying now in that the increased version minus current current is 29 is that right actually I think Jar's proposal was 1954 plus plus an extra 3.8% yeah we're not doing that one though I think we Nea here yeah we're negotiating here also again keep it keep the deliberations now we're uh among the board yeah 29.9 30% so what's the number what's the actual dollar value the per inc4 is $450 so it would be a $225 increase would be splitting the difference $225 over over 15 instead of 137 over so we split the difference between 1504 and the 19 1984 what 1954 1954 I did put it in right I the difference is the difference is $450 so if we split the difference but of that which is what shar's proposing we would increase it by $225 and that would be4 plus 225 uh 1729 1729 so we have two proposals on the table we have 16 cheaper than your 6 1763 hold on was number $37 17 what 1729 1729 no okay let me read them off I have them in a column here currently 154 if we only apply retroactive rent increases 1631 if we go with this 225 which is splitting so jar split the difference one split the difference one the total rent monthly that up by over 1504 is 1729 which is about a 15% increase all right so my proposal is 1631 Jared has a counter proposal which is 1729 the 1729 is a 203 no that's 15 that's 15 over where they are right now not over yeah over 1504 and it's still $230 below what they agreed to on this email $225 surprise no exactly arue you win thanks um thoughts I've made my proposal Jared's made his I think they're both at least pretty close to each other so maybe if then let's split them oh my goodness this there's actually a book called like uh about negotiating that's something about like don't bargain it's about meeting in the middle is the like you know how negotiations often work that's your increas is not really uh so mine would be increasing uh $137 right is that the oh yeah to 1631 right and Jared your increase is 225 225 to 1729 how much is that as a percentage is 137 as a number the one what oh you want to 1729 it should be $225 exactly 17% oh what's the percentage of it you said something like 23% so your proposal which is the just retroactive only uh is an 88.4% and Jared's proposal at 225 over where they are is 15% increase and so almost half of each other it's the 8.4 by the way would be that's just using our existing rent leveling numbers retroactive so what's so the difference between those would be the additional percentage that we would what's that what's the 7% other words eight give them the amount their title plus an extra 7% right I would really like to just stick to the allowable increase on this unit since given the situation of the tenants who are in the middle of a a school year who are planning to leave which time the the landlords will be able to increase however much they want right in between uh when they rent to uh someone new um and they can recover their cost then the if for now they're building Equity I understand that they have this email exchange they agreed to also like they've explained it was under pressure and I I I think we take that into into account a little bit but I think that I think that that is unreasonable I think that when they said that they I mean given I know her contract I negotiated and she hasn't I know exactly how what she makes based on what she told me there like this is that that increase is is going to be a lot for grad students like and I think the fact that they're going to leave in a year hopefully she's going to defend they're going to go get awesome tene track jobs somewhere because those exist still um then I I I'm not looking at it you're looking you're putting emotion and personal stuff into it I'm looking at it from a logic math timeline sure I I fully admit that I that I that I'm being subjective here looking I think wrong from a landlord's perspective which is why you asked me to be somebody asked me to be on the board but where for a year this gentleman who actually seems very nice and is a lot nicer than 99% of the landlords wouldn't put wasn't including including him I'm a landord he's been sitting around for he's been sitting around for a year because he didn't know what to do with these rents and he didn't know what to do so he wasn't able to do anything um I don't as a landlord and this is horrible but everybody has a tough tough story everybody does and and they're all true and they all suck and and and you feel for them but I I we're we we you know I'm going to say my piece under Dess as you say they agreed to $1,954 I'm saying okay well let's not do1 1954 let's give them a $225 break on that and and that's still and and they're only going to be there for 11 more months and then they have to pay that and this guy has thousands of dollars the one thing I don't want him to have to do is not make repairs because you can't because that's worse than than than anything so I I I really feel strongly about about about a a$ 200 plus dollar reduction from what he agreed to pay two years ago not now two years ago he agreed to pay this and rents have gone up significantly from two years ago so I feel strongly about the 729 1729 17 well between the two of you if you split it added it and divided it' be 181 oh that oh 181 difference so so instead of 225 or 137 it would be 18 oh yeah we're only about $100 apart so it would be $50 more than that it be about 1680 would roughly 1680 for the for the rent so let's do that true I I if it brings Jared and I to consensus I'll accept so so please just say it in plain dollars how much over the current 1729 minus 1631 okay divided by 2 and then 1631 plus that number I don't I I splitting the difference between 1631 and 1729 I think number was 225 yeah right it's 225 increase yeah your number was 1371 oh you're just doing the difference amount so the rent amount if we look we just split the difference between 1631 and 1729 is I mean we've need to know both right 29 - 163 1 is 98 / 2 196 plus six wait 1631 18 wait 1827 1540 was it 98 98 was the difference can do the yeah this is this is easy math compared to like the other graduate students can so 98 is is how we're $98 apart right we're $98 apart so we would add we would add 49 or 49 on top of mine so 1631 plus 49 we're $98 apart now me and Jared you can have it you win so if we're he's saying 1729 I'm saying 1631 we're we're $98 apart if we split the difference in that we just we need to add $49 to mine and that that will get us to 168 what it 1680 1680 so I'm dividing the 98 by two is what you're saying right because we're splitting the difference we're 98 apart now so we need 1631 plus 49 is 1680 which is a nice round 1680 oh a round number sounds good 1680 it is okay all in favor motion to move have you decided no we I mean we can take we I think we take now that we're rolling let's do our 10 let's do it well like because we have I haven't I mean we've kind of heard from Lucen on this real quick rather than doing a official vote can we do right now a straw poll on a temporary unofficial vote that we all agree on this one so we can move on yes yes uh all in favor i i n no exensions all right so we're we're in we're in agreement about 1680 okay for two for unit 25-2 I get the tough one we gonna go next to the tough one or should we do the the let's just keep going let's do the 1040 um I proposed uh a I was up I tried to figured out like and I said you know what I think a firm 30% is increase right so it' be like a 13 $1,350 just and that's it's not insane it's it's it's a lot but she's been paying 1040 forever and and he couldn't he he he's never gonna be able to unlock that ever so she's not she's going to pay 3 and a half% next year or three 3.8% next year and it's kind of not close to Market but it's it's not a hard I I don't know I don't know her financial situation but but that's an extra $310 a month it's an extra 310 bucks and just to be clear since we started the other one this way retroactively applying the allowable amount brings that brings it to 1127 so as a starting point right and just that that if you go with a 1300 that's a 25% increase that's 1350 Oh I thought you said 1300 are we allowed to do to apply it over over time can we say that we'll let them go up you know like say they can go rather than 25% at once let them go up you know 10% you know 10% extra this year and 10% extra next year above whatever the amount is 10% that could be written to we that's what they want well I'm saying for us can we decide that it's only you have to give them permission that they can yeah that they can only do it if they maybe I don't even know how they roll it out over time have to figure that out yeah but they don't have much time no we're talking no I mean so instead of a 25% jump one year we let we give them three years to get up to that point I would rather agree to something like uh they can go above the allowable rent by two% for the next three years or something then well 20 bucks isn't going to C help anybody out and you know so like why why aren't we doing it like the previous one because because in for most people like a a 25% increase in and their living expenses at any given time for most of the working class like is is difficult to to weather so why can't we re negotiate it lower I think that I mean that's another option right I was just asking if it was allow no I'm just saying I I would like it to go to 1127 which would be retroactively applying that's the allowable increase the allowable increase for the last can I ask a question are you Limited and this is all very personal and you don't have to answer but um does the lease allow the tenant to have a roommate if she so chooses have a what I'm sorry roomate roomate we don't know in our contract to can't subet but in an effort to bring our you know her her rent up we would more than really more than I mean she may not want to I don't know if we want to get involved like bring roommates in like we're not you know we're a we're it's just a you have to get a roommate we'll decide on who they are you don't have to but she should have she should not be prohibited from doing that because you can say 1350 and you're more than welcome to bring room you don't even have to say that but as long as she's not as long as there's no barrier it's fine well if she had a partner they' be allowed to move in probably I think I think the problem and hear me out HP with your 1127 is it's significantly below Market we all know that it's not any and if rent control had not come into place which is why we're saying there's a hardship here he would be in front of a judge right now and they'd be negotiating this and but right now I'm negotiating with you so I'm starting there assuming you're going to something higher we're I want to agree with I don't want to negotiate this should be just a logical conversation so a judge would not look at our rent control and he would look at it and say well 1900 is Market you're paying a th and he's bored he's tired he doesn't want to be there he doesn't like his job and he's gonna say I don't want to be doing this and he's gonna say 1,400 or something really quickly or something so Jared attorney just said if you went to a judge he would say you have to go with what the rent control no no what he said was that the rent control board would have to approve it and then it would go in front can I hold that off or something I got Lucinda and car some dinner here you don't have for everybody I'm looking I'm find you I'm okay don't worry about it I'll take it this is a this this is one that is also sensitive because you've been paying this rate for a long that's something that I sorry what was that that this while it's a we all agree that it's a it's a real bargain um this is this is this is a this is a level that they've been paying for a long time however it's a hardship that we determined was because of the rent control board if the rent control board wasn't in place the landlord would be battling outside and but the r control is in place J but that's why we're doing this and the r control is in place to to keep it to make sure that we maintain you know low rents or affordable rents for for for tenants right and all like if we increase it to Mar we're just passing the burden down to the Market's 1900 we're going to 1350 uh which is like still $600 below Market so so why don't we split it like how we did before to negotiate well I would be willing if we're going to negotiate I'd be willing to split it and say uh split the difference between the 1127 and the 1352 and allow him to with board approval to raise it six or 7% a year for the next three years so he's not so 10% a year that compounding that adds up to way more than we be given no it doesn't like like do the math I mean Ive my head if let's say so go to 12 1225 or something and then allow him to slowly because she's never gonna move out and I don't blame her so allow allow him to get twice the rent control increases every year twice yeah it's 3. % my my energy bill went up when you compound percentages though like that's going to end up being like a like it a much a much bigger increase than like what were're what your 13 whatever puts them at and then just stable like moving stable over time so what you're proposing is actually more than what you originally proposed what was your over four years mine was 1127 what if um it was what Jett 1380 1350 1350 what if it was difference between the two is 22 on 1127 for six months and then ke was allowed to increase it a couple percent 5% a year five five 5% some percentage above whatever they see whatever the rank control board one or two I mean 1% 1% is like two right but over time that compounds into a lot of money 100 years I'm 50 I'm gonna be dead in 20 years I'm sorry I'm not 20 or 30 like all of you 20 or 30 I just wanted to refute the fact that you'll be dead in I I I think that I think hold hold on Terry's on stack let's her go back to this I just had a question I don't know maybe I'm opening cams but when would the increase go into effect you know just decided tonight it would go in effect February 1st it could it could be that quick which is how many paychecks away for the tenants zero well I was wondering if there would be a like let's say whatever we agree on they couldn't do it would they have no opportunity to find another place the difference right they wouldn't be able to move out at that point if they disagree with that I think we need to give them more like time I just that's I just try and be PR that's a good consideration yeah well then you could push it back that if I I think we have to do that because if they if if we ra if we're raising these beyond what was allow allowable and they they you know can't do that or don't want to do it except the term we have to give them time to to find a place or find the money or find the money right which is that's why I ask how many paychecks the way that is like well I was just wondering because that was you know I was trying to think of both sides I like well I was saying the difference between and 1127 is 223 MH how about splitting like you did before all right so that would be what 23 divided by two of course it's 11150 50 so when I say 11 say say 115 and that's okay 115 okay 115 where does that where does that put us 12 so over the 1127 yeah 12 47 or something 112 I thought it was I thought were over Heather's proposal my proposal yeah so that'd be 1242 um what 1242 1242 1,242 and what is that percentage increase yeah what's the percentage over right this minute yes that's still an extra $200 a month that's 20% I'm 19.4 20% yeah what is it 19.4 19.4 but in In fairness to the tenant now she's capped at 3.8% next year no whatever it is whatever yeah it won't be the the way the economy is going it's GNA the CPI is going to be lower so it'll be 3.5% or 3% next year so inflation yeah so so so she's going to have a 3% increase next year probably which is going to be uh 40 bucks next year more so should be paying for 1280 in 2025 you know what I mean so and then and she's she's she's still doing really well compared to the market rent she's still doing really and yeah she's paying more I agree but I you have to also consider that she whatever it would be if the rent control board wasn't a place she would whatever she would be paying significantly more probably then 124 right and again hypothet like that hypothetical we all understand that exists a lot of people are going to be paying a lot more if the rent control wasn't in place or else there would be no purpose for us to have the r control or have the ordinance right the hardship right so but and we're we're taking the hardship very seriously and trying to take that into consideration or we wouldn't be allowing it to go over the you know the the ordinance amount so that 1242 represents almost a 20% increase which I think applying that all at once is is difficult I have a counterproposal to your percentage increase allowable over time but rather uh dollar amount so whatever so half of that amount half of that increase uh would be would be uh now and then and then half of it would be applied plus the percentage uh the allowable percentage next year rather than putting it as a percentage because again we don't know CPI if CPI go you know goes through the roof that's gonna be a whole lot more if it's goes down like you said it's going to be less and so if the if we agree on the amount I would say half of the increase now and half of it um half of it to like a flat flat increase right flat rate uh increase now and half of it appli the next year and then they of course can still do percentage on top yeah just just give me your proposal on numerically what okay so what's the difference between 124 1242 and 1040 $200 $200 so100 they do a $100 increase now and a100 and $100 extra $100 increase and we can say it's got to we got to decide if it's before after they do the the the percentage in 2025 but $100 added on in 2025 and then they still get the they still get the whatever the allowable amount is for for 2025 and are you doing the 100 over the current or the 100 over your 200 over it's 200 over the current and so I'm say which is a 20% increase for this for this one like in in relative terms lot so it really like 100 so it would go up 100 the new rent would be 1140 uhuh it' be40 for a year and then it would go to 1240 plus the allowable percentage that uh for the for the ordinance I like that because that and that takes into consideration like first of all time to make decisions about things it doesn't throw 20% on a tenant at once and it gets them it gets them closer so that their percentage increases will will mean more over time right oh yeah and that makes it so we can actually accurately predict it as opposed to Jared's where allowing them the next three years to go over by a certain percentage that's like that's you know we don't know what that actually works out to if you g to do our straw poll on that one straw poll on that one uh I mean I'm proposing it do we have other I'd ra hear from others first I we have agreement Jared i g abstain from this one because I agree so so this so we're doing uh 2131 your next one wait no no no I want I want to make sure we've recorded what we've done so we're doing up to 12:42 12 uh 1242 will be the new one but um for this is for 2132 um but uh half of it now and half of it in 2025 so 1140 for this year and 12240 next year plus the percentage Yeah and let's say that they get they get to add the 100 before they do the percentage that way that percentage comes up to a dollar more or a couple dollars more so 1140 yeah instead of 1242 why don't we just do 1240 this makes the math easier plus we over we you calculate the overage on the on the difference anyway so 1240 we're going to do 1140 for uh for 2024 and 124 plus um plus ordinance percentage Yeah plus CPI increase for 2025 we agreed on that one we have one more to go at 8:30 at night I think that was the hardest one though 213- one right currently at 1626 retro only meaning our own ordinance applied 17 63 the original ask was 2100 and this is the this is the one where the family members can they not negotiate this on I mean you want us to do this one I would like you to do okay do it then I propose [Laughter] $2,600 um so so starting point is 1763 do we give them more on top of that so what do they paying now they're paying 1626 now just moved in or not just no no that's somebody else 1985 just moved in 25 yeah the one that's the highest so that's our like basic Market idea of like what what these units are and this one uh is the mo like can we 1985 I got look at I mean is this the one of one of the more renovated ones or the unrenovated on 252 is the most renovated Follow by 231 okay so this is not and I can see here you asking the 1985 OR7 I well she answered my question in the anyway but 1985 is not the most renom why are we talking about that expensive are we just are we just we're just trying to get straight which apartment was yeah which was which but like so this is this is this is1 this what we're talking about right now and so I would not no that's the 1985 no that's 2151 hold on sorry 231 and that is the least and that's 2131 is the least renovated this one's least where is this one this is the only one we have left can you tell me how renovated this is we're going fast let me just like all right this the only one I need to know I don't need to know all of them just this one Terry was asking though I'm over it I was asking to try to help and I wasn't this is the only one we have to decide now which where is this in the in the ranking of renovated it's one of the more renovated okay that's good that's good to know so one this is one of the more renovated units um 231 1626 allowable 17630 yeah and the ask was 211 21 try [Music] and maybe for this one we just split the difference between where it is now and and their ask I mean and that gets them that gets them pretty close to like the the other renovated was 2100 so the difference between 1763 and 2100 what I was trying to think of don't split the difference between the ask and where the Retro would be I'm talking about not their where they are now I'm talking about where the Retro 1623 so 176 what's the difference between 1763 and 2100 that's 337 what percentage increase was that well about if I divide it by two you mean no from new number the new number yeah the new number between oh do that if we did split the difference between what's allowable and what they ask for I got you 2100 minus 1763 we should make an Excel spreadsheet we could have been doing this on the computer right now that's 19% that's 19% between 1763 and 20 perfect can we do that over two years is um is everyone getting I thought people were getting 25% 2% the last one we did was was roughly 19% too but we and we did and then we divided it over and we divided over two years I would say we do the same for this one because that's the difference between what they could could have gotten with rent control and what they were asking for and then apply it's comparable to the percentage increase of the others and we apply it over two years like we did with the other one that was close to 20% same argument for why so if looking at the dollar value you're G to want to 1763 so 337 is the number the the dollar value number difference between what they're no oh see we were doing that between the Retro number not the where they are now the percentage is higher I did I did it between the Retro number not where they are now I no I want the Retro number for splitting the difference but then I want to know their percentage increase over what they're paying now and the dollar increase over 337 two 168 just 158 so it's 158 168 and then so if I do [Music] one I'm do this 21 that comes to 1763 is 337 337 divided by two so it'll be it'll be the new rate plus 16850 we're going to put 168 um so this will be 1763 1763 plus 168 is 1931 that get them very close to the other one and then and then the difference between what they're paying now and 1931 if we're g to is 1931 minus what we put 16 1626 it's 19% 18.6 right and that's a three so that's a 305 increase I let I say we make it $300 increase we do 150 increase this year and same deal 150 increase next year plus the the the allowable percentage so just to be clear 1626 plus 150 is 1776 so it'll be 1776 isn't that what our country was founded and then you plus the 15 50 and then the increase on top and then what's wait what's uh then what's 1776 plus another 150 is 1926 so and then so in 20125 is what what was that sorry 1926 oh yeah plus whatever we established as 1920 1926 um plus percentage increase does that sound acceptable to everyone this was going up again a comparable percentage to the others um but we're doing it over time and it amounts to in nominal terms 300 $ increase and brings them up to to to after two years it brings them up really close to their other one that they negotiated at with with the ability to negotiate it at market value right so even though they asked for 2100 they were they were able to you know the prices set by supply and demand and the the cons the buyer the consumer was only was willing to pay uh that amount and they were willing to sell it for that amount so I think that that's fair not buy and sell in that sense rent but sounds good all right I agree I agree so did you get all that Terry yeah I'm gonna read it out just so I don't we just know what everybody's doing um uh hold on 23-2 is going up to sorry 25-2 we did first that one's going up to 1680 we decided all at once um 23-2 going up to 11:40 in I have it4 everybody should do it and then we compare I think I think that's right and then and then 1240 was the last one last last one was 1926 plus the allow yeah so 1776 in the first year and then 1926 in the second year plus percentage where is that put landlords then should we uh since we're considering their hardship where does that put them in terms of in 2025 we don't know the percentage yet but 2025 what is that what have we added to the revenues can we just do it as for the two 500 put in the [Music] 1985 why don't we just do it for 2024 if you don't mind yeah that's fine keeping in mind that in 2025 if the one apartment is vacated they they can do it by a lot more yeah well no the the one that's the one that's uh the one that's we know is going to be vacated uh in 2025 or sooner we we didn't increase it over two years so there's if that's what I'm saying you tally 1776 1140 1985 which is that existing rent and 1680 you get 6581 in 2024 as of when these leases would be in effect all right and then and in 2025 it's hard to do because unless we want to it brings it up at least another $300 on top of what of the percentage and pro and and then whatever they're able to negotiate for or rent it for after they leave so yeah I guess you could just if you want to assume time three we have 6778 and next year if nobody left and and you just did a 2% you know Depend and that's probably a low at least it is new and I mean these are significant increases over what 3.8 is what's uh you know allow we've given them retro and we've also given them on top like on top of that another which is what 9% uh eight eight point something um once it's compounded and we're giving them another you know close to 10% on top of that except for the one that they're going to be able to increase in the near term anyways um I'm going to can somebody move this as a the chairl entertainment motion to uh to to move this is a full package officially and uh so we can take a vote I so move yes thank you okay uh di Diane moves lend seconds excuse me do you mind saying what the final number is going to be the total for our rent one more time 6581 is what for for the first year and then the second year will'll go up to be everything if everything went into effect including your 1985 25-1 what's the rents for 2132 and 2152 for this year2 was 1140 in year 24 and 1240 in 2025 plus whatever the allowable increase here's what yeah so right now let I'll just go through them again 2 2152 in 2024 goes up to 1680 we didn't do anything for 2025 they're leaving 23-2 goes up to 1140 in 2024 and 1240 plus plus% increase um in 2025 and then 2131 goes up to 1776 in 2024 and 1926 plus percentage increase in 2025 do we have a provision what happens if 252 doesn't leave I mean you just the rank control I just written down it would be then you can bring it back here how's that very expensive we're happy to write that yeah so you write it in the contract they're agreeing to write it in the cont so we can put that here that that's part of our the reason we're here it says we're tired just like everybody else but it says our our month to month this year we will be paying around $6,600 per month that's just that's just I'm sorry I have to I have to call a point of order here because uh we're first of all in the middle of a vote and we've already gotten all the information that we can get right like we we we have all the information from you we know what everything says this is what we've come to so we have to like it's the negotiations are are done at this point right or the the deliberations are done um we need a vote we need a vote so Diane moved uh what the package that or the the uh increases that we uh for all three or can we get a second we send a seconds all in favor I I I will I uh nose nay wait is that an a n no nay no Nays exensions no abstentions all right motion passes we all roll out wait wa there is another public comment just for anything not related to so public comment for things unrelated to this particular case but please related to [Music] control you'd have to come up I guess I'll ask my question in a way that's in an effort to like to be free of bias because I think my question may apply to any other cases where you do proceed with an increase or where there's a clause similar to what Nick and Michelle are agreeing to so my question simply a legal one which is just um how we would handle if I don't I mean I I trust their character but if for whatever reason in the future a tenant does stay are we just saying that they would be a hold over tenant like what what's going to be the legal requirement since this is a new provision that we're adding this is Ed so if you had a not the good tenants you had but if you had a wicked tenant and they just wanted to hang around and they're on a month-to month no no I don't think that's the question yeah no they are asking like what happens if what happens if they don't leave they would be go back up would be allowed well no just what happens they would be essentially they'd be on an expired one-year agreement with a clause in their agreement their their agreement would have expired and they would be violating the Clause that they would that they agreed to make right so which would be atypical to be in a leas agreement so they would go on they don't have a written lease they would go on to a month-to-month tency and you can terminate that teny with 30 days plus one day notice you kick them out I guess the difference here is because there's the clause of agreeing to vacate or regular um take them to landlord tenant court enforce the clause and enforce it yeah so for that wouldn't I guess it wouldn't come back to here then I don't want I don't want to step on any toes but njsa 2a8 61.3 or 61.4 states that a clause in a lease that states residential lease that states that tenant will vacate on a certain date is void and un enforcement we could theoretically charge them double rent under this statute there you go chargeing double rent you you can get rid of that and they're not coming back yet and just to be clear I was responding to you had said come back here but I guess that well no if you want it to increase it more like they let's say they get get jobs at ruers and they want to stay we've only get we we've made we've given you that one has the least amount of increase percentage wise because we know that they're they're leaving you'll be able to raise it up to Market later way I'm sorry uh quick question just just so we have it the the chair has the floor hold on um so uh so we we made this decision based on this particular case so if they decided they wanted to stay because they got jobs you like you could come back because we didn't increase it like we did with the others as much you could come back here and we would consider that because we we made our decision for theirs being less of an increase in everybody else is because they're leaving all right public comment hi my name is Anna Lima I wanted to make a comment regarding how each rent increase is determined not only today but for future cases a lot was mentioned about what tenants can afford and cannot afford and of course going back and forth as to how much money each person might have sitting around and who can afford which increase next with that comment wouldn't it also be making sense to request the salaries of each tenant in order to come to that conclusion as to what is what per percentage their living expense is in comparison to their salaries I I think I I think that it actually going forward should be almost a blind tenant income and I we got emotional about it and we I don't I don't I actually disagree with that okay never mind so you answer I mean the whole point is tenants and and and like Matt said these are human people and they're and they're and they're Highland Parkers they're Highland Park residents and we know you are too that's why we consider and we gave you an increase like almost double cage it's almost double what the allowable increase is um we have did you sorry you had the floor I don't believe I mean that's pretty I don't believe we could ask them for their salary information I think that would be a little bit too difficult for them to I mean if if people describe that they're young and they're starting starting out and their graduate students and so on I think you can make a fair assumption that they're not making a whole ton of money so I don't think I think it' be a little offensive to have them come in with their tax returns and show how much they actually make and they do a 30% calculation and say you can pay it I don't think we can do that I agree however he did mention around how much he makes just the Last Tenant right never mentioned that right so I think that that is a fair point to make that perhaps she can afford that and to get the tenants input as well as to what they can afford going forward with the increases it's a fair inquiry we also didn't ask the landlord to provide right provide their income or in their application I'm sorry Mike I'm sorry I thought you were pointing my directions earlier come up here comment I just want to ask a question of the uh chairperson uh just for the record do you work in the same uh Department as the residents who live in 2115 to I do not I've never I had never seen them before until we came here okay because I thought you said something I said iate their contract for 9,000 people that when we were on strike you might have heard so I I don't know them and I okay I just wanted to make sure was I would I would have disclosed disclosed a conflict of interest for sure that that they're like in the same boat as the other I mean half of Highland Park and the other 9,000 uh faculty that you know was at the table for that's it um I don't see any hands raised on the zoom anybody else from the public would like to make a comment all right uh the chair will entertain a motion to adjourn objections motion passes meeting over