February 10, 2014

Cromwell Associate v. Mayor and Council of Newark - 211 N.J. Super. 462 (1985)

FACTS: City of Newark amended rent control to limit the total of all increases granted in any 12 month period to 25%.


ISSUE: Is a maximum limitation on annual increases constitutional?


RATIONALE: Landlord is entitled to a "just and reasonable return on its investment." (550)  Limits are inherent in the nature of rent control but the Newark ordinance goes one step further.  It places a "limit on the hardship relief granted by the local administrative agency." (550)  25% is arbitrary and cannot guarantee a fair return.  "If a LL cannot operate efficiently w/o increase in excess fo 25%, the limitation precludes that LL from realizing a just return."  (552)

DISPOSITION: Judgment for P.