Opinion ID: 2347469
Heading Depth: 2
Heading Rank: 3

Heading: Tax surcharge provisions of ordinance

Text: Plaintiffs also charge that those provisions of the New Milford ordinance which provide for a tax surcharge to cover increases in municipal property taxes are, in several respects, unfair. Unfairness, however, is not a concept of constitutional dimension. Again, what plaintiffs are arguing is that these provisions render the ordinance violative of the constitutional guarantees of due process and nonconfiscation. Among other complaints, plaintiffs argue that by requiring landlords to apportion tax increases equally among rooms in a dwelling, the ordinance compels them to absorb the cost of tax increases attributable to vacant units. It cannot be said that these provisions bear no rational relation to the purposes of the ordinance. Nor can it be said a priori that these provisions deprive landlords of a just and reasonable return on their investments. Constitutional provisions do not require that rent control ordinances allow landlords to recover all increases in their operating expenses; they require only that the landlord be permitted to obtain a just and reasonable return. Hutton Park, supra, 68 N.J. at 574. Any increase in municipal property taxes which a landlord must bear will be properly and fully accounted for in the calculus for determining what is a fair and reasonable return. Troy Hills Village, supra, 68 N.J. at 626-627.