New Jersey § 2a:42-84

§ 2a:42-84.

a. It is the intent of P.L.1987, c. 153 ( C.2A:42-84 .1 et seq.) , that the exemption from rent control or rent leveling ordinances afforded under P.L.1987, c. 153 ( C.2A:42-84.1 et seq. ) shall apply to any form of rent control, rent leveling or rent stabilization, whether

adopted now or in the future, and by whatever name or title adopted, which would limit

in any manner the periodic or regular increases in base rentals of dwelling units

of multiple dwellings constructed after the effective date of P.L.1987, c. 153 ( C.2A:42-84.1 et seq. ) . No municipality, county or other political subdivision of the State, or agency or

instrumentality thereof, shall adopt any ordinance, resolution, or rule or regulation,

or take any other action, to limit, diminish, alter or impair any exemption afforded

pursuant to P.L.1987, c. 153 ( C.2A:42-84.1 et seq. ) . b. The Legislature deems it to be necessary for the public welfare to increase the

supply of newly constructed rental housing to meet the need for such housing in New

Jersey. In an effort to promote this new construction, the Legislature enacted P.L.1987,

c. 153 ( C.2A:42-84.1 et seq. ), the purpose of which was to exempt new construction of rental multiple dwelling

units from municipal rent control so that the municipal rent control or rent leveling

ordinances would not deter the new construction. Although this legislation was initially made effective only for a temporary five-year

period, it was expanded for a second five-year period by P.L.1992, c. 206 until 1997, and then in that year made permanent by P.L.1997, c. 56 . At the time P.L.1987, c. 153 ( C.2A:42-84.1 et seq. ) was introduced, the uniform method of financing construction of new apartments was

through project-based mortgage loans. There was little, if any, new construction financed in any other way. Recently, however, there has been increased utilization of Real Estate Investment

Trusts (REITs) and other public companies which could potentially be an important

new source of construction of rental housing in New Jersey. These entities generally do not utilize project-based mortgages but instead obtain

comprehensive financing not secured by individual mortgages as a more efficient and

lower cost means of financing new construction. There has been confusion as to whether new construction undertaken by REITs and

other such entities would be exempted from municipal rent control under the terms

of section 2 of P.L.1987, c. 153 ( C.2A:42-84.2 ) when there is no initial mortgage financing. To eliminate any confusion and to facilitate the construction of new rental units

for which there is no initial mortgage financing, section 1 of P.L.1999, c. 291 amends section 2 of P.L.1987, c. 153 ( C.2A:42-84.2 ) to add a subsection b. to that section in order to clarify the Legislature's intent

of providing an exemption from municipal rent control ordinances, except those adopted

under the authority of P.L.1966, c. 168 ( C.2A:42-74 et seq. ), by specifying that the period of time for exemption from rent control in such instances

shall be 30 years following completion of construction.