Cherry Hill Review Board Rejects 76% Hike For Sussex House Renters

Posted: April 13, 1988

To the relief of tenants, the Cherry Hill Rent Review Board last night unanimously rejected a landlord's request for a 76 percent rent increase and instead granted an increase of 10.5 percent.

Sussex House Apartments owner Alan Waldman immediately vowed to appeal the decision, which his attorney said represented an unconstitutional violation of Waldman's property interests.

But the tenants' attorney, George Geist, hailed the decision as an affirmation of rent control in the township.

"I'm happy that rent control is alive and well in Cherry Hill," he said.

In the course of 17 meetings before the seven-member board, Geist had argued that the rent increase was excessive and would have forced many elderly tenants to move.

Waldman said he needed the money to earn a "just and reasonable return" on his investment, as is allowed by state law. The rent board did not dispute Waldman's right to a fair return, but board members said he failed to substantiate the need for a 76 percent increase.

The board rejected Waldman's request - in part because he had stopped renting units at the six-story complex on North Kings Highway. Nearly a third of the building's 68 apartments are vacant, and Waldman, who eventually plans to turn the building into condominiums, has made no attempt to fill them.

"The owner has not done anything to market this property as a rental property," said board member Robert Shreves. Because of that, Shreves said, Waldman failed to prove he needed the rent increase for expenses "reasonably related to . . . rental purposes," as required by township ordinance.

Despite that, Shreves said, Waldman should be allowed to collect a fair return on his investment. Waldman purchased the the building for $2.8 million in April of 1987, investing $650,000 as a down payment.

Shreves said Waldman was entitled to a 6 percent return on the $650,000 - or $39,000 - which would mean a 10.5 percent rent increase for the tenants.

Waldman sought a 10 percent return on his investment - or $65,000 - and said he needed an extra $219,924 to meet unspecified expenses. Lost income

from vacant units was not a factor in the proposed increase, so the board erred in considering it, said his attorney, Jules Lieberman, who plans to appeal the decision in Superior Court.

The seven-member board of three homeowners, two tenants and two landlords had expected a court challenge to their decision.

"I desperately wish that we could render a decision that would please everyone," Acting Board Chairman Sam Peronne said before the vote. "That's not going to happen. But that doesn't mean that we haven't looked at both sides of the issue."

Despite the impending court battle, tenants were happy with the board's ruling. "This is wonderful, wonderful, wonderful," said one elderly tenant who declined to give her name. "After 18 meetings, this is good news."

Tenants Association President Harlan Yount said the 10.5 percent increase would be a financial burden for some tenants. But compared with a 76 percent hike, which would have raised the rent for Yount's one-bedroom apartment from $403 monthly to $709, he said, "It's a victory."

Cherry Hill's rent-control law limits annual rent increases to 2.3 percent, unless a landlord can prove financial hardship that justifies a higher increase. But the ordinance limits even those so-called hardship increases to 8 percent, unless a landlord can prove that denying a higher increase would represent an unconstitutional confiscation of property interests.

Lieberman had argued that anything less than a 76 percent increase would represent an unconstitutional confiscation of Waldman's property interests.

In granting the 10.5 percent increase, the board did not comment on the issue of confiscation.

R. Bruce Johnson, a landlord representative on the board, said he believed Waldman was entitled to a higher increase, but he said he believed it would have been "futile" to vote against the board's majority.

Waldman's request for a 76 percent increase was the largest since the township instituted rent control in 1975. In 1983, Cherry Hill Apartments received a rent hike of 87 percent for one of its two buildings and 82 percent for the other, but the increases were phased in over four years, township officials said.

In another case, the owner of Wallworth Park Apartments on Oxford Street is seeking a 26 percent rent increase.

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