Abatements

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Basically two types of properties receive abatements in Jersey City: low-income and luxury. 

Low income can be divided into two groups: Public Housing sponsored by the federal government and Affordable Housing provided by developers.

After WW11, returning veterans needed housing.  The federal government started public housing with the idea that veterans needed low income housing for about two years.  So the terms were generous.  In Jersey City public housing can deduct water, sewerage, utilities before the city receive 10% by contract.  Unfortunately, water, sewerage, and utilities increase through the years, so Jersey City stopped receiving "lieu of payments" (abatements) many years ago.

Rent-controlled was sponsored the same time.  Major cities in American was concerned about housing for veterans.  Cities like New York have a city income tax, so rent controlled and low income housing pay their fair share of government unlike Jersey City.

Low income housing sponsored by developers requires tenants to pay one third of their income which includes water, heat, and utilities.  Under the contract with the city. the project pays 15% fee "in lieu of taxes"  If the tenant qualifies for subsidy, but that subsidy is excluded from the 15% fee.  To explain, if the apartment is worth $1,500 per month but the tenant can only pay $500.00, then various subsidies pick up the rest, such as Section 8.  The tenant rent cannot be legally raised so why exempt the subsidy from the15%?

Some low income housing is questionable as "low income."  As an example, the Puerto Rico Lutheran Housing Corporation on Third Street in Jersey City advertised in 1994 affordable housing units.  The maximum income for three or more person was $78,816.  In 1994 many homeowners who pay property taxes had similar or lower incomes, but they were subjected to full tax taxation.

Not all low income housing is equal. Again, the Puerto Rican Lutheran Housing only pays the 8.25% fee to the city while others pay 15%.  Many of these projects have strong political connections!

Many citizens keep quiet when the low income projects came on line; however, they protested strongly over the luxury waterfront developments.

The 1 to 4 homeowners do not have  the income to qualify for those luxury units but the 1 to 4 homeowners are obligated by law to subsidize they luxury tenant tax bill. 

The same developers who receive luxury tax abatements are the same one who contribute to political campaigns. This is another name for pay to play. 

Luxury abatements hurt the small homeowner because luxury abated properties sell at an inflated price.  Since they pay low taxes, the units/condos are desirable. 

When the county strikes the budget, it doesn't take into consideration whether the sale is abated or not.  However, the small homeowner is given a higher tax bill next tax year.

Below is a chart prepared by Freeholder Bill O'Dea.  This chart explains the tax increases according to each municipality in Hudson County.

This chart shows that Jersey City has paid 62.4% of the increases in County Taxes in two years (2002-2004).  This is the result of tax abatements