Church Towers rents could rise
Council will hold off on tax abatement renewal until owners discuss
by Timothy J. Carroll
Reporter staff writer
Feb 01, 2009 | 9466 views | 5 5 comments | 47 47 recommendations | email to a friend | print
REDUCED RENT – Church Towers provides moderate-income affordable housing through a low-interest mortgage and local tax breaks. But what will happen if the tax breaks expire?
REDUCED RENT – Church Towers provides moderate-income affordable housing through a low-interest mortgage and local tax breaks. But what will happen if the tax breaks expire?
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The future remains uncertain for the three-building affordable housing complex in western Hoboken known as Church Towers, which houses many of the city’s politicians and emergency workers, and which stands to lose its special tax agreement with the city because the deal recently expired.

Now, the building’s owners say they are allowed to increase the rents to market-rate, but city officials say they will spur the owners to try to find a way to keep the rents affordable instead. If that happens, officials say, they can decide whether to extend the tax break.

The complex inspired much debate recently after it came to light that its tax abatement renewal had expired and no one was sure what effect this could have on the rents.

Longtime Church Towers tenants said they want their rents to stay affordable, but taxpayers complained that many of the residents have become wealthy and should share the increasing tax burden in this financially strapped city.

A resolution to extend the abatement was put onto the council agenda twice by state-appointed fiscal monitor Judy Tripodi late last year, but is now being postponed.

Church Towers, a 402-unit complex, was built in 1965 as part of the urban renewal of Hoboken. The developers made an agreement with the federal government: they’d keep the rents affordable in exchange for a low-interest 40-year government mortgage. Certain other affordable buildings in town such as Clock Towers have similar agreements.

While residents had to meet certain income limits in order to move in, they did not have to move out if their incomes increased. They did have to pay a higher rent if they exceeded a limit.

Today, some of the residents have become successful enough to own shore properties and second homes, while others are senior citizens or have low incomes.

Besides getting a 40-year low-interest government loan, the building also got a tax abatement deal from the city, meaning that instead of paying regular fluctuating property taxes each year to the city, schools, and county, the owners simply make a set annual payment straight to the city, no matter how high taxes rise.

Some taxpayers feel that now that the agreement has expired, the owners of the building should have to pay regular taxes, which rose overall by 47 percent in Hoboken this year.

But if the owners have to pay taxes, they might pass them on to tenants in the form of a rent increase.

Activists ask questions

The city failed to respond to the expired abatement for more than a year until it was brought to the city’s attention by Toni Tomarazzo, a Hoboken taxpayer and lawyer, who had been investigating whether the city was collecting the right amount of funds from its abated properties.

Inquiries posed by Tomarazzo and a local tax reform group of which she is a member, the Hoboken Tax Reform Coalition, spurred the administration to start reviewing the agreements.

The city did not realize that the low-interest HUD mortgage for Church Towers also expired last year, which Tomarazzo also discovered. The expiration of the mortgage is the reason the owners can increase rents.

Thursday night, the City Council’s Zoning and Planning Subcommittee had a meeting with city officials and the Church Towers management to find out more about the situation.

Thursday meeting

At the meeting, the managers of Church Towers, which is owned by the non-profit Church Towers Urban Renewal, LLC, said they no longer have an obligation to provide affordable housing, according to HUD provisions. Even though they got a $1 million HUD loan for capital improvements not long ago, they said they can now charge market-rate rents, yet have continued following HUD rents for the time being.

A HUD spokesperson from Newark agreed last week that as far as the low-interest mortgage is concerned, the owners are now free to charge market rents.

However, some people close to the situation have speculated that charging market rents would jeopardize the non-profit status of the building’s owners.

The owners so far have not increased the rents, but that may change. Thus, the city wants to find out how to keep the rents affordable.

City officials said Thursday that they have notified the building managers that the city wants them to pursue some form of a state or federal affordable housing plan.

The city said that if the building managers find a plan to keep rents affordable, the city will then negotiate an extension of the tax abatement.

Thus, if the matter was never brought to the city’s attention, the city might have inadvertently renewed the tax agreement without getting any promise that the building could remain affordable.

Tomarazzo and two other members of the Tax Reform Coalition explained last week that the group is not trying to oust residents, as some have tried to say. They said it is in the best interest of the Church Towers residents – and the taxpayers – to know the effects if the tax agreement is not renewed by the city.

The matter will not be on the agenda for the next council meeting, and will likely be studied much more before it reappears, officials said.

Officials also said that the building may be subject to some form of rent control, but that determination depends on several other fluctuating factors.

How councilman got into Church Towers


Wait lists for affordable housing in Hoboken are long, because low-cost housing is so scarce in this popular mile-square city. In 1983, a 600-name wait list to get into Church Towers was closed by the federal government because it was so long. The units were turning over at a rate of fewer than 10 per year. At that rate, it would take until 2043 to offer apartments to everyone on the list.

When the building was erected in 1965, there was an income limit, but once there, residents could stay for as long as they want. The building was originally intended to keep the working class in Hoboken, and it did. Teachers, firefighters, and police officers earning a single-digit salary moved in, including former Mayor Anthony Russo, who was a teacher for $5,000 per year.

But rumors of wait-list jumping and people getting political favors have abounded for years.

Russo’s son Michael, 33, who is presently a councilman, has an apartment there, a curious fact since the wait list was so long.

When asked about this last week, Russo said he never filled out an application to get on a waiting list for an apartment there.

“I assume I was on a list somewhere,” he said last week. “I don’t remember how it all went down.”

He said that when he turned 18, he simply told the building management that he wanted his own apartment, but never signed a list or filled out a form.

Throughout the years, he reiterated his desire for a unit, he said. When he was 27, management called and said they had a place for him, and he submitted his paperwork at that time.

“I most certainly got in there by abiding by all the rules and regulations,” he said.

In fact, the management said at a meeting with a City Council subcommittee Thursday night that the law allows for family members of existing tenants who are over 21 to get a preference and to be exempted from the general waitlist.

The federal department of Housing and Urban Development was unable to confirm or deny this Friday, but will do so this coming week.

“Was I on [a waiting list]? I’m sure I was,” Russo said. “I don’t know if anyone has seen it.”

The managers of the building said that the waiting list is audited each year by officials from HUD.

When the Church Towers tax agreement first appeared on the council agenda at the end of last year, some Hoboken taxpayers were irked by the tone of a letter Russo sent telling his neighbors to come to the council meeting.

“This is an agreement that allows management to provide housing for those of us who cannot live in luxury condos and million dollar brownstones,” the letter stated. “[Y]ou need to continue to make your voice heard and not let the vocal minority force you out of your home.”

Because Russo lives in the complex, he will not be voting on the resolution, as it would be a conflict of interest, he said, although he has been participating in discussions. – TJC

Comments
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WESTY
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February 01, 2009
After seeing the list on line of people who owned additional real estate and had public sector salaries over $80K a year and reside in Church Towers I think many think a good hard look at the system is long overdue.
georgi
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February 01, 2009
Very good article; I am surprised by the fact that Judy Tripodi introduced the Church Towers on the agenda last year; why not investigate if the residends of these buildings still qualify for a low rent? As a matter of fact I think that the wealthy ones should pay retroactive city taxes and the 47% increase. It is a shamfull deal: one could easily spot their cars in the parking lot: brand new class S Mercedes, 5 or 7 series BMW, AUDI, Lexus, VW, etc.
CDeVille
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February 01, 2009
well put. if a building is for low-income people, why should someone get to jump a 600 person waitlist because they're a relative? and what are the rules, can a cousin do it, or an uncle? i'm sure the reporter will be following up
downtownobserver
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February 01, 2009
How nice that Michael is able to live near his parents. Something is rotten in Hoboken.

As for the the expired tax deal, this is a very difficult question. All of the formerly "poor" residents who now summer at the shore should be paying market rate, or at least a vastly adjusted rent. Why should we subsidize them. They had had an almost free ride for the last 30 years or so.

This is made difficult by the legitimately needy people that live church towers. There needs to be a fair solution to this problem
AnewHoboken
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February 01, 2009
Finally we find out in the Hoboken Reporter what's really going on. So the 40-year govt loan is up and the owners can charge whatever they want, unless the city stops them. Bravo for the tax coalition for pointing this out, to the Reporter for actually calling HUD and printing facts not conjecture, and to reporter Tim Carroll.

Can't wait to see what HUD says about Michael Russo. Good job.