Part One of Two
Cape Issues recognizes that the need for worker housing has reached a critical stage, as have also county citizens, our businesses and our legislators. How do we, as a community, jumpstart housing and give our residents a chance at safe, clean and affordable housing?
Problems with Worker Housing
A decline in housing has happened over several years, even decades. Collecting rent is tedious, often rent is not paid, and units are left in poor condition. Evictions are time-consuming and expensive. Rents have not covered the upward march of taxes, maintenance, utilities and repairs.
Cape May County real estate escalated in value as visitors relocated to the Cape as second homeowners. Instead of charging $750 a month for a rental house, that dwelling, with some elbow grease, could now command $200 a night as an Airbnb.
Low-income employees could no longer afford to buy homes. Renting was their only economical option.
The market for Airbnbs has begun to cool. Only “trophy” properties are now commanding top dollar. A vacation home can be a lot of work for landlords. This is a historic opportunity to switch vacation homes back to worker housing. The era of “cheap rent” is over, but with the addition of more worker housing, costs should moderate and housing should become available.
For this to happen, property owners must be assured of financial and legal rights. Many in our community are celebrating the possible passage of laws that ban or limit the number of Airbnbs or vacation homes in each community. Some are advocating for rent control or rent forgiveness. Many tenant advocacy groups insist tenants should only pay 30% of gross income for housing. But with taxes, repairs, maintenance, nonpayment of rent due to executive orders, tenants refusing to pay for nefarious or no reason, extreme zoning demands and costs of creating housing through the conversion of nonconforming structures, no one has decided how landlords are to profit, or worst-case scenario, not go bankrupt, or forced to sell at “Fire Sale” prices. I can assure you, the passage of “restrictive laws” that violate property owner rights will only force the removal of even more housing from the market.
For example, executive orders of no rent, no evictions during Covid, gave some tenants only a temporary reprieve, but resulted in fewer rental units on the market. Tenants who did not pay back rent are now frozen out of housing due to bad credit. This government policy has failed tenants and landlords alike.
Constant interference from the governor’s office, via executive orders, and directives from the Department of Community Affairs, have added chaos to running a business. Why would property owners invest in housing when rules could change on a monthly basis, and possibly lead to economic ruin from an investor’s standpoint?
What Can Be Done?
It is time for local legislators, landlords, tenants, and citizens to control worker housing at their level. Trenton does not understand this county, nor our unique economy. Let property owners run housing in the most cost-effective manner.