Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

HELP HOBOKEN HOUS. v. CITY OF HOBOKEN

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY


December 30, 1986

HELP HOBOKEN HOUSING, Plaintiff,
v.
CITY OF HOBOKEN, NEW JERSEY, Defendant, and SONIA BURGOS, MARGARITA SANABRIA and CAMPAIGN FOR HOUSING JUSTICE, Defendant-Intervenors

The opinion of the court was delivered by: STERN

OPINION STERN, District Judge

 Plaintiff is an unincorporated association of developers which own property in the City of Hoboken. *fn1" In this suit the association seeks a declaratory judgment that an ordinance passed by the City Council and signed by the Mayor of Hoboken violates federal constitutional and statutory rights of the association and, furthermore, that the city ordinance is preempted by legislation enacted by the State of New Jersey.

 The ordinance is numbered "Ordinance V-51," and is entitled "An Ordinance Prohibiting the Withholding of Certain Residential Units from the Rental Housing Market Within the City of Hoboken." The ordinance requires owners of apartment units to notify the city's Rent Levelling Board of vacancies of over thirty days. Any owner of a unit remaining vacant for over sixty days may be punished by a fine of not more than $500 per day. The Rent Levelling Board can grant a waiver to any landlord wanting to keep a unit vacant for more than sixty days for one of three enumerated reasons. Two of these reasons concern maintenance and improvements to the apartment; the third allows a landlord to keep a unit vacant for occupation by a member of his or her family.

 The ordinance exempts several categories of apartments from its provisions. These include units in owner-occupied buildings of four units or fewer; units in buildings participating in "an affordable housing project approved by the Community Development Agency of Hoboken;" and units in a building whose owner has transmitted his first sixty-day notice of intent to convert the building into a condominium or cooperative "and his full plan of conversion to the City Clerk pursuant to N.J.S.A. 2A:18-61.8."

 That provision of the New Jersey statutes requires rental unit owners simultaneously to give tenants and the municipal clerk notice of intent to convert to condominium or cooperative ownership. The notice must include notification of the tenants' rights under the statute, including the right "to purchase ownership in the premises at a specified price in accordance with this section." The notice itself appears to trigger this purchase right. Thus any Hoboken landlord who wishes to convert rental property to condominium or cooperative ownership may take his property out of the ordinance by complying with the state's notice requirements.

 According to the preamble of the ordinance, "the elimination of a substantial portion of the existing affordable rental housing stock, and insufficient new construction of affordable rental housing . . . have caused a substantial and increasing shortage of rental housing affordable by families of low and moderate income." The resulting "housing emergency" is said to be "exacerbated by reason of the withholding by owners of available affordable housing units from the rental market in order to increase the value of their property at the expense of persons desiring to rent such housing units." This warehousing of vacant units is said to cause "severe economic and physical hardships to tenants," thus necessitating the ordinance "to protect the rights of tenants during the present affordable rental housing crisis in the City of Hoboken."

 The Hoboken City Council enacted the ordinance on June 18, 1986, to take effect immediately. On August 1, 1986, plaintiff filed this action, and moved for a temporary restraining order preventing the city from enforcing the ordinance. *fn2" On August 4, after a hearing, Judge Lechner of this court entered an order temporarily restraining the city and its agents from enforcing the ordinance. Judge Lechner granted the request for temporary restraints and set a return date of August 11 for a hearing on plaintiff's preliminary injunction motion. His order states that it was granted in part due to the representation of counsel for the city that the ordinance was "pending before the Mayor and City Council of the City of Hoboken for additional consideration."

 No hearing was held on August 11. Instead, counsel for plaintiff submitted a proposed order continuing restraints until September 8, 1986, when a hearing would be had. The city did not oppose the order, which represented that "action upon Ordinance V-51 still pends before the Mayor and Council of the City of Hoboken." This Court signed the order on August 18.

 Instead of a hearing on September 8, the parties submitted a consent order continuing the restraints until October 27, 1986. The order stated in part that "the Ordinance . . . is still under active consideration by the Mayor and Council of the City of Hoboken." This Court signed the order on September 23, 1986. *fn3"

 Before that date arrived, a group of applicants to intervene as defendants made a motion to intervene as of right pursuant to Rule 24(a) of the Federal Rules of Civil Procedure. After a hearing, I granted the motion to intervene of three of the applicants: the Campaign for Housing Justice, an unincorporated association; Ms. Sonia Burgos; and Ms. Margarita Sanabria. In my letter-opinion of October 24, 1986, I noted that both the applicants for intervention and the plaintiff itself had provided the Court with reason to believe that the City Attorney of Hoboken sided with the plaintiff, and against its client, with regard to the key constitutional issues in this matter. I also noted that the City Attorney had made no response to these accusations or to the documents supporting them. "Under these circumstances," I held, "the position of the applicants that their interests are not adequately represented by counsel for the city is well taken." *fn4"

 The delay occasioned by the motion to intervene, and the need to rule on a discovery motion, resulted in the rescheduling of the original motion for a preliminary injunction from November 24. The parties agreed orally to continue the restraints to that date. Also scheduled for hearing at that time was a motion brought by the intervenors to dismiss this action for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The motion to dismiss will be granted, thus obviating the need to rule on the plaintiff's motion for a preliminary injunction. *fn5"

 The complaint alleges that the ordinance violates six different provisions of federal law, and that the ordinance is preempted by various statutes of the State of New Jersey. As the federal claims have no merit, the Court will decline to exercise its pendant jurisdiction to hear the state law claims.

 The Fifth and Fourteenth Amendment Claims

 The Taking Claim

 Plaintiff alleges that the ordinance violates the fifth and fourteenth amendments to the Federal Constitution in that it constitutes a taking of property without compensation.

 The ordinance does not contemplate the city's physical occupation of property. Instead, it requires landlords to rent vacant apartments to paying tenants.

  Assuming for the moment that such regulation of rental property can be a taking of property, plaintiff's claim is at best premature. Because the ordinance has never been enforced, no property owner can point to any property whose value has been affected by this ordinance. Plaintiff's claim against the city thus amounts to what the Supreme Court has called a "facial challenge" to the ordinance. To succeed in a facial challenge, the plaintiff must show that the ordinance, on its face, effects a taking. Hodel v. Virginia Surface Mining & Reclamation Association, 452 U.S. 264, 295, 69 L. Ed. 2d 1, 101 S. Ct. 2352 (1981). That case, involving a challenge to federal strip-mining regulatory statutes pointed out that when the "mere enactment" of a law is at issue, the test to be applied is whether the law "denies an owner economically viable use of his land," Hodel, 452 U.S. at 295-296, quoting Agins v. Tiburon, 447 U.S. 255, 260, 65 L. Ed. 2d 106, 100 S. Ct. 2138 (1980).

 Under this ordinance, landlords will remain free to rent their apartments to paying tenants. Moreover, if they desire to convert property to condominium or cooperative ownership, they will be able to remove their buildings from the reach of the ordinance by complying with state filing requirements. Thus Hoboken landlords have not been deprived of all "economically viable" use of their property by this ordinance. *fn6"

 Plaintiff claims that the passage of this ordinance will interfere with the investment-backed expectations of Hoboken redevelopers. Loss of future profits has been called a "slender reed upon which to rest a taking claim." Andrus v. Allard, 444 U.S. 51, 66, 62 L. Ed. 2d 210, 100 S. Ct. 318 (1979). Nonetheless, it may be that the loss of an expectation interest may be a predicate for a taking claim even in the absence of a claim of economic non-viability. Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 105 S. Ct. 3108, 3120 n. 12, 87 L. Ed. 2d 126 (1985). Williamson makes it clear, however, that such a claim is fraught with the difficulty of determining whether the reduced expectation rises to the level of a taking. It should not be entertained until a concrete dispute, focusing on a specific instance of an enforcement of an ordinance, is before the court. Williamson, 105 S. Ct. at 3121.

 Here, as the ordinance has never been enforced, no such dispute is present. Moreover, it is not possible that the ordinance by itself -- which merely prohibits the withholding of vacant apartments -- could diminish a landowner's expectation interest. Although the point is never clearly stated, what plaintiff appears to complain about is the way this ordinance will interact with the city's rent-control ordinances and with the state's landlord-tenant statutes. The allegation appears to be that the ordinance will force landlords to choose between renting these apartments at controlled rents, or triggering tenants' rights to buy their units under N.J.S.A. 2A:18-61.8. Whether such a choice will sufficiently reduce landlord's expectation interest in their investment so as to state a taking claim is completely speculative. It cannot serve to support a taking claim before any enforcement action has ever taken place.

 The preceding discussion is premised on the assumption that regulation of rental housing can be a taking of property under the fifth and fourteenth amendments. In this Circuit, at least, that assumption is false. Thus there is a second, and even more compelling reason, to dismiss this claim.

 In Troy Ltd. v. Renna, 727 F.2d 287 (3d Cir. 1984), a New Jersey statute granting long-term protected tenancies to senior citizens and disabled persons was held not to implicate the taking clause. Relying on "the age-old distinction between regulation and public use," 727 F.2d at 301, the court decided that government regulation of the landlord-tenant relationship does not implicate the constitutional prohibition against uncompensated government takings of private property for public use. Such regulation passes constitutional muster, therefore, provided it "satisfies the demands of due process and equal protection." 727 F.2d at 302. The holding in Troy leaves no doubt that the taking clause is not implicated in this case.

 The Troy court held that "statutory tenancy laws protecting holdover tenants are not takings, but merely regulations of the use to which private property may be part," 727 F.2d at 302. In its brief in opposition to this motion, however, plaintiff asserts that " Troy, Ltd. did not hold that laws creating statutory tenancies are not takings, but merely regulations of the use to which private property may be part." (Emphasis in original.) The plaintiff apparently understood the court's holding to be dicta. That understanding is incorrect. The court expressly bottomed its decision on the absence of a taking, "in order to obviate the necessity to determine the factual question" of whether the state had provided just compensation by requiring the tenants to pay rent. 727 F.2d at 301. Thus the Troy decision binds this Court, and requires it to dismiss this claim.

 Substantive Due Process

 Plaintiff alleges in its complaint that the ordinance is an example of "excessive police power." It may be that regulation which is "'stretched as far' as to destroy property rights" violates the due process clause. Williamson, 105 S. Ct. at 3123, quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413, 67 L. Ed. 322, 43 S. Ct. 158 (1922). However, the same reasons for refusing to consider an expectation-interest taking claim apply to this sort of due process claim. Williamson, 105 S. Ct. at 3124. For the same reason that the taking claim could not survive, this aspect of the due process claim must also be dismissed.

 The plaintiff also asserts that the ordinance is irrational in that it will not further the purposes stated in the preamble. The preamble states that the practice of withholding housing units from the market is done "at the expense of persons desiring to rent such units;" and additionally that the ordinance is intended to "protect the rights of tenants."

 The prohibition against withholding units is an obvious attempt to keep more units occupied in the short term. In addition, the interrelationship of the ordinance and the state landlord-tenant laws seems to be a rational way to protect the tenants' state-granted right to buy their units in the event of condo or co-op conversion.

 The plaintiff argues, however, that in the long term the ordinance will have the effect of reducing available housing in Hoboken, by reducing the incentive to rehabilitate and renovate existing housing. This is a question of policy that should be addressed to the Mayor and City Council, and not to this Court. For instance, it may be that the city has decided to risk reduced overall housing stocks in the future in order to slow a current pattern of dispossession and dislocation of the city's poorest residents. Such a decision is completely within the province of the city. "In this sphere of economic and social regulation we 'properly defer to legislative judgment as to the necessity and reasonableness'" of the ordinance. Troy, 727 F.2d at 298, quoting Energy Resources Group, Inc. v. Kansas Power and Light Co., 469 U.S. 256, 105 S. Ct. 697, 706 (1983); see City of New Orleans v. Dukes, 427 U.S. 297, 49 L. Ed. 2d 511, 96 S. Ct. 2513 (1976).

 Equal Protection

 Plaintiff asserts that the ordinance establishes "invidious discrimination," but the class of persons discriminated against is never defined. Neither "fundamental personal rights" nor classifications based on "distinctions such as race, religion, or alienage" are at issue here. Therefore, the ordinance must merely meet the test of being "rationally related to a legitimate [governmental] interest." Dukes, 427 U.S. at 303-304. As discussed above, this ordinance easily meets this "rational relationship" test.

 Vagueness

 In order to defeat a law on vagueness grounds in a facial challenge, a plaintiff must show that it is "impermissibly vague in all its applications." Village of Hoffman Estates v. The Flipside, Inc., 455 U.S. 489, 498, 71 L. Ed. 2d 362, 102 S. Ct. 1186 (1982).

 A law is impermissibly vague when "a person of ordinary intelligence" does not have "a reasonable opportunity to know what is prohibited," or when it fails to "provide explicit standards" to the persons charged with enforcing it. Grayned v. City of Rockford, 408 U.S. 104, 108-109, 92 S. Ct. 2294, 33 L. Ed. 2d 222 (1972).

 The terms of this ordinance are quite clear. Any landlord with a vacant apartment must notify the Rent Levelling Board within 30 days; if he does not obtain a waiver, and the apartment remains vacant for 60 days, he may be fined. As yet, there is no vagueness here. If "concrete problems of constitutional dimension" appear in the future, "it will be time enough to consider them when they arise." Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 52 (1966).

 The Eighth Amendment Claim

 Plaintiff alleges that the penalties enacted by the ordinance violate the eighth amendment. Eighth amendment scrutiny, however, is not appropriately applied to a civil ordinance such as this. Eighth amendment protections apply only after a finding of guilt in a criminal prosecution comporting with due process. When punishment for a criminal violation is not at issue, the Due Process Clause of the fourteenth amendment is "the pertinent constitutional guarantee." Ingraham v. Wright, 430 U.S. 651, 671, 51 L. Ed. 2d 711, 97 S. Ct. 1401 (1977). As there is no allegation that the plaintiff has been subjected to a finding of guilt pursuant to due criminal process, this case presents no eighth amendment issue.

 The Federal Antitrust Claim

 The plaintiff claims that

 

The ordinance constitutes an unwarranted and unlawful intrusion into areas pre-emptively regulated by the Congress of the United States, in particular with regard to the Antitrust Laws, 15 U.S.C. § 1 and following.

 Taken literally, this claim is incomprehensible. Congress, through the enactment of the antitrust laws, cannot be said to have brought residential land use regulation preemptively within the federal ambit.

 It becomes clear upon reading plaintiff's brief, however, that plaintiff intended to allege that the ordinance violates the antitrust laws.

 The only law specifically cited is section 1 of the Sherman Act, 15 U.S.C. § 1. That section prohibits combinations in restraint of trade. In Fisher v. City of Berkeley, 475 U.S. 260, 106 S. Ct. 1045, 1047, 89 L. Ed. 2d 206 (1986), the Supreme Court held that municipal rent regulation, without an allegation of combination or conspiracy between two or more parties, does not violate section 1. As plaintiff alleges no combination and no co-conspirator, its complaint states no section 1 claim.

 As for the other "Antitrust Laws," it is not sufficient simply to allege a violation of any or all of them. Notice pleading does not require much in the way of specificity but it does demand more than this. Northland Equities v. Gateway Construction Corporation, 441 F. Supp. 259, 264 (E.D. Pa. 1977).

 The State Law Claims

 The State of New Jersey has enacted a large number of laws regulating landlord-tenant relations. Plaintiff argues that these laws preempt the city's ordinance.

 Municipalities are creatures of the state, and questions concerning the relative powers of the two levels of government are questions uniquely of state law.

  Because there are no federal questions remaining in this suit, the Court is free to decline to take pendant jurisdiction over these state law claims. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966). Concerns of comity strongly militate against this Court's injecting itself into a disagreement over the allocation of power between state and local governments. State courts are the appropriate forum for this dispute. Under Gibbs, therefore, the state claims will be dismissed.

 In accordance with this opinion, the complaint of plaintiff will be dismissed in its entirety.

 HERBERT J. STERN, United States District Judge

 DATED: December 30, 1986

 ORDER

 This matter having been opened to the Court on the motion of defendant-intervenors to dismiss the complaint, and on the motion of the plaintiff for a preliminary injunction; and the Court having considered the submissions of the parties and having heard argument, and for the reasons set forth in the Court's opinion filed herewith;

 It is on this 30, day of December, 1986,

 ORDERED that plaintiff's motion for a preliminary injunction be, and it hereby is, denied; and it is further

 ORDERED that the defendant-intervenors' motion to dismiss the complaint be, and it hereby is, granted.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.