Passaic's Innovative Plan to Keep Rents Affordable with Incentives for Owners

 

Passaic, a city in New Jersey, is taking a unique approach to combat rising rental prices without resorting to rent control.

Mayor Hector Lora's two-part plan aims to provide incentives for property owners to keep rents affordable while improving their rental properties.

This innovative approach seeks to strike a balance between supporting landlords' profitability and ensuring housing affordability for residents.

The Incentive Mechanism

Under Mayor Lora's plan, property owners who offer affordable rents would have access to grants for upgrading their properties without facing higher tax assessments, as long as square footage is not increased.

The second part of the plan requires state legislation that would prevent increases in assessments for homes and buildings undergoing aesthetic changes.

This approach focuses on providing incentives rather than imposing restrictions, with Mayor Lora stating, "The idea is to stop swinging sticks and instead offer carrots."

Addressing New Jersey's High Rates

New Jersey property owners face some of the highest rates in the nation, and recent changes to federal tax laws have further limited state and local tax deductions. Mayor Lora argues that penalizing property owners for maintaining their homes would be counterproductive.

His plan of incentivizing property improvements aligns with this goal by encouraging landlords to invest in their properties while keeping rents affordable.

This approach not only benefits Passaic residents but could potentially be extended to suburban towns as well, according to Mayor Lora.

Alternative Approach to Affordable Rent

Mayor Lora's plan takes a different approach to the concept of affordable rent.

Rather than solely relying on tenants' ability to pay, the plan encourages landlords to make improvements to their properties in exchange for keeping rental prices affordable.

In Passaic, affordable monthly rents range from $1,215 to $2,152 for one to three-bedroom apartments, which are approximately $400 lower than market rates.

This approach creates a win-win situation, enabling property owners to generate profits while offering affordable housing options to residents.

Challenges and Importance of the Plan

While rent-assistance programs exist, a 2023 Rutgers study highlighted the limited effectiveness of such programs in reaching those in need.

Mayor Lora's plan intends to address this issue by providing a niche for landlords to improve their properties while ensuring housing remains affordable.

With an abundance of people in need of rental assistance and a shortage of available units, Passaic faces the pressing need for more affordable housing options.

Conclusion

Passaic's plan to keep rents affordable through incentives for property owners presents an innovative solution to combat rising rental prices. By offering grants for property upgrades and avoiding tax assessment increases, Mayor Lora aims to strike a balance between landlords' profitability and housing affordability for residents.

This alternative approach, based on encouraging property improvements, provides an opportunity for landlords to invest in their properties while ensuring rents remain accessible to a wider range of residents.

Passaic's plan may serve as a blueprint for other cities grappling with similar challenges in their pursuit of affordable housing initiatives.