Inganamort v. Borough of Fort Lee

• Citation: 120 N.J.Super. 286,293 A.2d 720
• Parties: John F. INGANAMORT et al., Plaintiffs, v. BOROUGH OF FORT LEE et al., Defendants. FORT LEE HOMEOWNERS ASSOCIATION OPPOSED TO RENT CONTROL, Plaintiffs, v. BOROUGH OF FORT LEE et al., Defendants. CONTINENTAL GARDENS, INC., et al., a New Jersey corporation, Plaintiffs, v. MAYOR AND COUNCIL OF the BOROUGH OF RIVER EDGE and The Borough of River Edge, a municipal corporation, Defendants.
• Decision Date: 26 June 1972
• Court: Superior Court of New Jersey

Page 286

120 N.J.Super. 286

293 A.2d 720

John F. INGANAMORT et al., Plaintiffs, v. BOROUGH OF FORT LEE et al., Defendants.

FORT LEE HOMEOWNERS ASSOCIATION OPPOSED TO RENT CONTROL, Plaintiffs, v. BOROUGH OF FORT LEE et al., Defendants.

CONTINENTAL GARDENS, INC., et al., a New Jersey corporation, Plaintiffs, v. MAYOR AND COUNCIL OF the BOROUGH OF RIVER EDGE and The

Borough of River Edge, a municipal corporation, Defendants.

Superior Court of New Jersey,

Law Division.

June 26, 1972.

Clive S. Cummis, Newark, for plaintiffs John F. Inganamort et al. (Sills, Beck, Cummis, Radin & Tischman, Newark, attorneys; Richard Newman and Jay L. Hundertmark, Newark, on the brief).

Patrick J. Tansey, Fort Lee, for plaintiff Fort Lee Homeowners Association Opposed to Rent Control.

Sheppard A. Guryan, Newark, for plaintiffs Continental Gardens, Inc. et al. (Lasser, Lasser, Sarokin & Hochman, Newark, attorneys).

William V. Breslin, Englewood Cliffs, for defendants Borough of Fort Lee et al. (Breslin & Monaghan, Englewood Cliffs, attorneys).

Ned J. Parsekian, Hackensack, for defendants Mayor and Council of Borough of River Edge et al. (Parsekian & Ferro, Hackensack, attorneys).

PASHMAN, A.J.S.C.

Two complaints have been filed challenging the constitutionality of the defendant municipalities' recently adopted ordinances which seek to establish rent leveling systems designed to curtail the popularly labeled practice of 'rent gouging' (the exacting of exorbitant rents through excessive rent increases).

Essentially, River Edge and Fort Lee, in response to public despair over the dwindling housing supply and the attendant skyrocketing of rents, endeavored to fix rentals as of specified dates and provide for adjusted increases thereafter. Such changes would reflect cost-of-living increases, maintenance costs, capital improvement costs, property tax increases and general 'hardship' factors. Administrative boards, designed to review and oversee the operation of the leveling provisions are also established. Further, the ordinances prescribe sanctions in the form of fines and imprisonment for the willful violation of their provisions. See N.J.S.A. 40:49--5.

The plaintiffs are multiple-dwelling owners and a homeowners association opposed to rent control. This court imposed temporary restraints against the enforcement of the Fort Lee and River Edge ordinances pending formal argument. The New Jersey Tenants Organization was granted leave to file an Amicus curiae brief. The issues to be adjudicated are legal in nature. Accordingly, the matter may be disposed of in a summary manner. R. 4:67.

The plaintiffs challenge the validity of the ordinances on the grounds that:

(1) There were two procedural defects concerning the adoption of the Fort Lee ordinance: (a) a five-minute time limitation during which opponents and supporters thereof were permitted to voice their viewpoints at the public meeting, and (b) the failure to publicly advertise and hold a public meeting on an amendment to the ordinance;

(2) The Fort Lee ordinance is arbitrary and oppressive and violates due process in that it may result in the imposition of severe and unwarranted tax increases on residential property owners;

(3) Due process and other statutory and constitutional objections to the various sections of the ordinances relating to summary dispossess measures render the ordinances unconstitutional;

(4) Due process and other statutory and constitutional objections to the various sections of the ordinances relating to tax surcharges render the ordinances unconstitutional;

(5) Due process and other statutory and constitutional objections to the various sections of the ordinances relating to delegation of powers of the administrative boards render the ordinances unconstitutional;

(6) The enactments are preempted by state legislation designed to occupy entirely the field of rent regulation; in this regard, they cite state statutes dealing with substandard housing and summary dispossess proceedings;

(7) The enactments are preempted by federal legislation designed to occupy entirely the field of rent regulations; in this regard, they cite federal statutes dealing with the current federal economic program popularly referred to as Phase II;

(8) Municipalities generally lack the power and authority to regulate rents and landlord-tenant relationships; reliance is placed primarily on the case of Wagner v. Mayor and Municipal Council of Newark, 24 N.J. 467, 132 A.2d 794 (1957).

I PROCEDURAL DEFENCTS CONCERNING ADOPTION OF FORT LEE ORDINANCE

Two violations of the procedural provisions of N.J.S.A. 40:49--2 are alleged in relation to the adoption of the Fort Lee ordinance. The first is grounded on a five-minute limitation imposed on each speaker at the public meeting. N.J.S.A. 40:49--2, which governs the procedure to be employed in the enactment of municipal law, is silent with respect to the time to be allowed supporters or opponents of the ordinances. It merely mandates that the ordinance be subject to public expression at a public meeting. N.J.S.A. 40:49--2(b).

The public hearing in this case took place on January 19, 1972. There was considerable controversy surrounding the ordinance and the meeting was heated and well-attended. It lasted well into the night. Each speaker was afforded five minutes initially and an additional five minutes after all speakers were heard. The statute imposes no bar to such a procedure. There seems to be nothing patently unreasonable with such limitations. No speaker is alleging discrimination or unwarranted exceptions to the five-minute rule.

For the foregoing reasons, and in light of the presumption of reasonableness normally accorded municipal actions, it must be concluded that the ordinance is not voidable because of the time limitation imposed on speakers at the public meeting. Ward v. Montgomery Tp., 28 N.J. 529, 539, 147 A.2d 248 (1959); Johnson v. Montville Tp., 109 N.J.Super. 511, 519, 264 A.2d 75 (App.Div.1970).

The second procedural infirmity posed by plaintiffs relates to an amendment to the Fort Lee ordinance subsequent to its adoption but prior to its final passage. The ordinance as originally adopted was to be effective for a period of three years. Two weeks after its initial adoption by the governing body and the public hearing thereon, by an amendment, the effective period was reduced to one year. The said amendment further provided for extensions of the effective date from year to year by resolution of the governing body. At that same meeting, the ordinance was finally adopted.

Plaintiffs contend that the ordinance as finally passed is invalid since the notice and hearing requirements of N.J.S.A. 40:49--2(c) were not followed. That statute provides:

If any amendment be adopted, Substantially altering the substance of the ordinance, the ordinance as so amended shall not be finally adopted until at least 1 week thereafter, and the ordinance as amended shall be read at a meeting of the governing body, which reading may be by title, and shall be published, together with a notice of the introduction, and the time and place when and where the amended ordinance will be further considered for final passage, at least 2 days prior to the time so fixed. (Emphasis added)

The aforementioned procedure is mandated only where the adopted amendment 'substantially' alters the substance of the ordinance. Wollen v. Fort Lee, 27 N.J. 408, 420, 142 A.2d 881 (1958).

Insofar as opponents to the ordinance are concerned, the term of the law was reduced and any prejudice that might result from the amendment would arise only after the third year of its effectiveness but certainly not until after the first year. At times, an extension could be achieved by resolution (without requirement of advertising and formal public hearing) rather than by compliance with the provisions of N.J.S.A. 40:49--2(c). Thus, it is only after the third year that the plaintiffs would be prejudiced, if at all. Prior to that time and even after, the ordinance will continue under the scrutiny of the public by virtue of the Right to Know Law. N.J.S.A. 10:4--1 et seq.

The problem requiring the exercise of the police power is the threat to the public welfare caused by a shortage of housing at reasonable rentals. The circumstances are emergent, as cited in the preamble to the ordinance. This difficulty is hopefully temporary. Even if the governing body had appended no time limitation to the ordinance, the effectiveness of this type of legislation is only for the emergency.

In weighing the equities in terms of the harm to the plaintiffs, the purposes for which N.J.S.A. 40:49--2(c) was enacted and the effect of the amendment on the substantive application of the ordinance, it is my conclusion that the amendment in question does not constitute such a substantial alteration to the ordinance as to warrant its invalidation. If anything, plaintiffs are benefited by the change. Under these circumstances, the decreased time period cannot be deemed to be a substantive aspect of the ordinance. Accordingly, no substantial alteration of the Substance of the ordinance has occurred. Wollen v. Fort Lee, Supra at 420, 142 A.2d 881; cf. Reisdorf v. Mountainside, 114 N.J.Super. 562, 574, 575, 277 A.2d 554 (Law Div. 1971).

II CONSTITUTIONAL OBJECTS--TAX INCREASES ON RESIDENTIAL PROPERTY OWNERS

The Fort Lee homeowners group seeks to bottom a due process attack on the possibility that residential homeowners will incur substantial and unwarranted tax increases as a result of rent leveling. The argument is that property taxes on apartment houses will remain stable since the income derived therefrom will not increase. While the assessed value of the property remains constant, it is asserted that the cost of municipal services will increase. The difference, it is argued will fall exclusively on the shoulders of the residential property owners.

The plaintiffs' logic breaks down under...