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Hudson County 5 year Condo Conversion Ban Nears Passage

Published On: January 14th, 2020Categories: Real Estate Law

Would you believe that Hudson County politicians sponsored a bill that aims to prevent ONLY Hudson County property owners from being allowed to convert their property to condos?

Senate bill S2957 was Union City Mayor/State Senator Brian Stack’s baby. It is unclear what the intention of the bill is, other than hurting overall Hudson County property values (and therefore raising property taxes) and discriminating against Hudson County property owners. The bill has zero explanation for why it is being done, why it only effects Hudson County, nor how it bears any relation to the “Tenant Protection Act” that it modifies.

Government at its best.

If you own property in Hudson County, whether a 2 family house or a 12 unit apartment building, this bill hurts you since it will increase your property taxes and decrease your options for selling or otherwise distributing your property one day. The Liberty Board of Realtors agrees it will hurt property values in Hudson County.

There are also countless property owners who have invested money based on their right to condo convert. For example, a vacant lot in the Heights neighborhood in Jersey City sells for about $550k. Plenty of small time local builders have purchased such lots in the past year or so to build new 2-family houses on sites that previously held decrepit 120 year old houses. Build cost might be $350k. A new 2-family house in the heights might sell for $750k, which would mean the builder loses money. The numbers don’t work. The builder was expecting to condo convert and sell each unit for $450-$550k, making a profit. If they no longer can do this, their project and all the money they invested in it will go belly up. This will hurt real, working people, the small timers, far more than anyone else in my opinion. And there are lots of them who are in the middle of such projects right now. These people will go belly up, and if you own a property in the Heights, the price you can sell it for has already gone down because people have now heard about this new law.

The vote was pushed through the lame-duck session of the senate on January 9, 2020, 36-2. It seems it quietly passed in the assembly yesterday January 13, 2020, by 56-10. I have not even found an article about it on NJ.com, that’s how under the radar it has been kept. Of course all those NON-Hudson County representatives voted for a bill that only hurts Hudson County. No skin off their back right? Governor Murphy now has 45 days to sign or veto the bill. Since he has few political friends left, in my opinion and in that of everyone I have spoken to, there is almost zero chance he vetoes the bill. He WILL sign it. It is only a question of whether he waits out the 45 days, allowing those who already started a condo conversion process to finalize it, or whether he signs quickly to help Mr. Stack accomplish whatever his actual political goal is here.

Either way, the bill is likely to be challenged by someone as arbitrarily discriminating against Hudson County property owners. But whether it survives the courts or not, it will prevent anyone from being able to condo convert in Hudson County for years to come. And it will keep attorneys busy both fighting it, and filing property tax appeals due to the lower property values. All legal fees paid for by property owners of course. You can find more info about the bill here, type in s2957 in the “bill search” box in the website, and make sure to mark 2018-2019 session since that is the session it passed in.

2410, 2023

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