previously annunciated by the United States Supreme Court for rent control, including the prevention of excessive rent increases and the maintenance of affordable housing. The doctor admitted that the rent controlled units are of a lower quality than the units which are permitted to rent at market value. Furthermore, Dr. Barr calculated the vacancy rate in Fort Lee to be 6.8%. While Dr. Barr conceded that the standard vacancy rate which indicated a housing shortage was 5% or less, he posited that this high vacancy rate could be due to landlord profit maximization strategies, i.e., allowing a unit to remain vacant for a longer period of time to obtain a higher rent. Therefore, Dr. Barr opined, there could still exist a shortage of affordable housing. However, Dr. Barr also studied the 1990 Census in arriving at his conclusion and such data did not include an analysis of the income level of renters.
In his report, Dr. Baar asserted three reasons why the distinction between apartments and smaller rental units is rational. First, Dr. Baar stated that there were differences in the mode of operation of landlords of large apartment complexes and small scale renters. For example, large landlords are "less caring or responsible to tenants' demands" and "tend to be 'rent maximizers.'" (Report of Dr. Kenneth K. Baar, Sept. 1996). Second, condominium owners are not permitted to pass through increases in property taxes to tenants by increasing rents. Third, Dr. Barr asserted that Fort Lee eliminated vacancy decontrol because it was afraid that the continued conversion of apartments to condominiums or cooperatives would create a shortage of affordable rental housing. Finally, Dr. Baar posited that vacancy decontrol leads to landlord harassment of tenants to vacate units and increase rent. On cross-examination, Dr. Baar revealed that this harassment theory was the conclusion of a 1972 study performed in New York City. Dr. Baar also relied on the Comprehensive Housing Affordability Strategy ("CHAS") Report, which found that there was not enough affordable housing in Fort Lee based on the "feelings of observers."
In light of Dr. Baar's testimony, plaintiff has failed to demonstrate by clear and convincing evidence that the ordinance is not supported by a rational basis. The lack of affordable housing in Fort Lee is a rational basis for enacting such an ordinance. Furthermore, plaintiff has not rebutted defendants' reasons for distinguishing between large apartment buildings and smaller rental units. Hence, plaintiff has failed to overcome the presumption that the ordinance is reasonable and based on adequate factual findings.
For the foregoing reasons, the Court finds that Fort Lee Ordinance 93-33A is CONSTITUTIONAL.
An appropriate Order accompanies this Opinion.
NICHOLAS H. POLITAN
This matter having come before the Court the Complaint of plaintiff 440 Company against defendant Borough of Fort Lee, the Mayor and Council of the Borough of Fort Lee, and defendant-intervenor Fort Lee Tenants' Association seeking to declare Fort Lee Ordinance No. 93-33A unconstitutional, and the Court having conducted a bench trial on October 9, 1996, and October 15, 1996, and having considered the matter and having reviewed the submissions of the parties, and for the reasons appearing more particularly in the Letter Opinion in the above-mentioned matter, and good cause having been shown,
IT IS on this 17th day of December, 1996 hereby
ORDERED that the Court finds that Fort Lee Ordinance No. 93-33A is CONSTITUTIONAL.
NICHOLAS H. POLITAN