Portside Towers, one of Jersey City’s largest residential complexes, with 527 apartment units, has been the subject of a nearly three-year legal battle concerning the city’s enforcement on rent control and alleged systematic violations of illegal rental increases.
The case is now facing federal court, after tenants filed a class action lawsuit against Equity Residential seeking financial reparations of over $400 million in damages, including treble damages under the NJ Consumer Fraud Act.
“They argued that a building constructed two years before a redevelopment plan was approved was basically almost the same as being built after the redevelopment plan was approved,” said Kevin Weller, President of the Portside Towers East Tenant Association who is one of the named plaintiffs in the suit, at the recent city council meeting held on March 26.
“The judge took the ordinance seriously, why don’t the city departments?” asked Weller in front of eight council members, with Councilman-at-Large Daniel Rivera absent.
It is believed to be the largest rental control class action lawsuit in history, with the potential financial sum of over $700 million in punitive damages under the tenant’s claims. The suit also alleges over two decades of unlawful rent increases, with an estimated cost figure of $140 million in excess rent collected from 1995 to the present day.
Equity Residential, the owner of both towers, which were constructed in the 1990s, argued to the judge that the buildings fall within the Tidewater Basin Redevelopment Zone. However, the redevelopment plan wasn’t approved until after both Portside Towers had already been fully constructed.
Jersey Digs reviewed the 25-page redevelopment plan, and found that the statute did not mention the phrases “rent control” or “rent stabilization,” a legal argument curtailed by Equity Residential to exempt Portside from rent control.
The 19-story Western Tower was built in 1992 and the 26-story Eastern Tower was built in 1997. Both tenant associations make up around 5,000 families who either still reside in the building or moved out due to continued rent hikes. The current owners are The Towers at Portside Urban Renewal Company, LLC, who acquired the property in 1998.
In New Jersey, apartment buildings with three or more units built before rent control was implemented in 1987 are generally considered rent-controlled. However, the law provides an exemption for properties developed after 1987, allowing developers to apply for a 30-year rent control waiver.
Jersey Digs reviewed documents filed by Equity Residential, owned in 1998, in a question asked if the property fell under rent control, the real estate firm responded “yes.” Back in 2023, the city’s Rent Leveling Board voted 6-0 in a unanimous vote, ruling that the two towers fell under rent control, in the city’s Chapter 260 rent control ordinance adopted by the city council on Feb.7, 1986.
The decision paved the way for rent reductions to 2016 rates, providing relief to tenants who had faced increases of up to 50 percent at 155 Washington Street and 100 Warren Street. In an interview with Patch, Portside Towers tenant Kevin Weller stated his rent was $4,534 three years ago, and he received a notice that his rent would be raised to $7,011 per month.
“This case in many ways, is the first of its kind,” said Mollie Lustig, one of the attorneys taking on the federal case against Equity Residential. She added that one of the allegations aimed at the tenants of Portside Towers brought on by Equity Residential was “the advocacy advanced by the tenants throughout the process,” a notion that she argues lacks merit and legal footing.
After litigation was already underway, Equity Residential added a lease addendum aimed at waiving tenants’ rights to participate in class actions—a strategic move implemented only after tenants filed class-action lawsuits. Separately, Equity attempted to discourage tenant advocacy by accusing tenant leaders of improper ‘advocacy’ (essentially alleging unauthorized practice of law), an allegation tenant attorneys consider legally baseless, humorously leading tenants to deliver over 100 city council speeches behind a sign reading, ‘I’m not an attorney’.
In a parallel legal challenge, Kevin Weller filed a class-action lawsuit against property management software RealPage in April 2023, further intensifying the legal battles surrounding the company’s rent-setting practices.
The suit alleges that RealPage’s pricing algorithms were used to manipulate rent prices by setting, adjusting, and inflating rates, enabling property owners and managers to share competitively sensitive information.
This algorithm-driven pricing strategy, coupled with the alleged systematic disregard for rent control regulations, potentially may fall under federal and state antitrust violations.
Besides rent overcharges and excessive lease renewal payments, the plaintiffs also allege that Equity included false or misleading information in lease agreements, failed to disclose required details about rent control status, misrepresented the reasons for rent increases, and submitted fraudulent statements to government agencies.
“We are here because ongoing violations of Jersey City law are not being enforced,” said Michelle Hirsch, President of the Portside Towers West Tenant Association, who is also named as a plaintiff in the suit against Equity Residential. She added that “daily violations persist,” when it comes to the lack of the rent control city ordinance.
New Jersey carries out one of the highest numbers of municipal rent control policies in the country.
According to the city’s rent control ordinance, annual rent increases are restricted to a maximum of 4 percent under current housing regulations. Portside tenants from both luxury complexes state they have received rental increases of over 40 percent, what are a violation of the city’s own ordinance.
New Jersey State law mandates that all landlords of residential rental properties must register their units by submitting a Landlord Registration statement to the Division of Housing Preservation and the Office of Landlord/Tenant Relations, both of which operate under the city’s Department of Housing, Economic Development, and Commerce.
In Jersey City and Hoboken, rent control ordinances apply to buildings over 30 years old and may also extend to newer buildings if the developers did not file for a state exemption at the time of construction.
“You [Jersey City] defended the ordinance with confidence and clarity,” said Jessica Brann, a Portside Towers tenant who has advocated to the city in enforcing their own rent control ordinance. “You made it unmistakably clear that this law matters and it’s worth defending.”
For more information on the developments of Portside Tenants, there is a GoFundMe which has raised over $92,000.
Equity Residential has not yet responded to requests for comment. This story will be updated if a response is received.
