New Jersey Administrative Code › Title 5 - COMMUNITY AFFAIRS › Chapter 13 - LIMITED DIVIDEND AND NONPROFIT HOUSING CORPORATIONS AND ASSOCIATIONS AND URBAN RENEWAL ENTITIES › Subchapter 1 - GENERAL PROVISIONS › Section 5:13-1.12 - Rents and charges

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The rent schedule
				approved by the Authority shall be adequate to pay all necessary and reasonable
				expenses including, but not limited to, the cost of operation and maintenance,
				reserves for replacement, vacancy and other contingencies, payment in lieu of taxes,
				mortgage interest and amortization payments, mortgage insurance premiums and
				dividends on investments.
1. If a project is
				financed by governmental agency that regulates rent increases, rent increases shall
				not exceed those allowed by that governmental agency and approval of the rental
				schedule by that governmental agency shall be deemed to constitute approval by the
				Authority.
2. If a project is not
				financed by a governmental agency that regulates rent increases, or is no longer
				financed by such a governmental agency because the mortgage to that agency has been
				satisfied, no rent increase shall be valid or effective unless and until approved by
				the Authority in accordance with
				5:13-1.3(a)3.
i. An application for a rent increase submitted by
				a housing sponsor to the Authority shall include proof of service, by personal
				delivery or mail, to all tenants of notice of the application for an increase and of
				their right to submit written comments regarding the proposed increase to the
				Department of Community Affairs, Division of Codes and Standards, PO Box 802,
				Trenton, NJ 08625-0802.
3.
				Except as otherwise provided in (a)4 below, no increase shall be allowed if the
				resultant rents would exceed the rents in effect for the same units in the project
				at any time in the previous 12 months by more than the combined percentage of (a)3i
				and ii below:
i. The percentage increase in the
				Consumer Price Index for rent and utilities for the most recently preceding 12-month
				period for which information has been published by the United States Department of
				Labor; plus
ii. Either of:
(1) The percentage, up to a maximum of 12 percent
				annually, needed to fund operating deficits, debt service arrears or reserves for
				repair and replacement incurred at the housing project during the preceding 12
				months, provided that no part of the rent increase includes an amount allocated
				towards providing a return on equity to the sponsor; or
(2) The percentage, up to a maximum of six percent
				annually, needed to offset an inability to provide a return on equity and to offset
				operating deficits, debt service arrears or reserves for repair and replacement
				delinquencies incurred during the preceding 12 months, if all or a portion of the
				requested assistance is intended to pay return on equity.
iii. For purposes of (a)3ii(1) and (2) above,
				payments made for debt service shall be deemed to be payments of return on equity to
				the extent that the initial principal amount of the mortgage(s) exceeds the greatest
				of:
(1) The initial principal amount of the
				initial permanent mortgage(s), adjusted in accordance with the Consumer Price Index
				for rent and utilities;
(2) The initial
				principal amount of the most recent mortgage to a governmental agency that regulated
				rents, adjusted in accordance with the Consumer Price Index for rent and utilities;
				or
(3) The amount required to satisfy
				all existing mortgages and any other liens and abate all housing, construction, fire
				and health code violations previously cited by State or local enforcement
				agencies.
4. The
				Authority shall only approve rent increases in amounts exceeding those determined in
				accordance with (a)2 above after public hearing and upon a finding that any such
				increase is necessary in order to assure the continued viability of the project by
				allowing the housing sponsor to pay all necessary and reasonable expenses, as set
				forth in (a) above. The Authority shall ensure that effective notice of the public
				hearing is given to the affected tenants and to any persons known to be
				representative of their interests.
5. In
				lieu of approving annual increases in accordance with (a)2, 3 and 4 above, the
				Authority may, at any time, enter into regulatory agreements with housing sponsors
				that will allow the maintenance, in perpetuity, of a range of affordability in the
				project that, to the greatest extent feasible and consistent with project viability,
				most nearly equals or exceeds that existing at the time of the execution of the
				regulatory agreement.