ROOM FOR RENT

Room for Rent
　
November 9th, 2008
By Joyce Blay

On the first cold night of the season, Diane Reaves turned on the heat in the suburban home she began renting during the summer. Ten minutes later, the home's carbon monoxide alarms went off.

A blocked chimney and toxic creosol residue in the heating system furnace weren't her only problems.

Shortly after Reaves and her family began moving into the home on August 1, improperly maintained rooftop gutters channeled heavy stormwater runoff into the finished basement. Reaves said the basement flooding destroyed irreplaceable photos of her wedding, honeymoon and deceased family members.

Weeks later, green stains on the basement's walls mark the level to which flood waters had risen. The damage also marks a new chapter in Reaves' continuing struggle to improve her family's quality of life.

For years, Reaves lived in a Lakewood rental home located in a residential neighborhood on Holly Street. The single family rental home was bordered on either side by rental homes also owned by absentee landlords.

Last year, one of the absentee landlords leased his property to as many tenants as he could fit in it.

According to township inspectors, a total of 26 individuals lived in a residence zoned for only 10 people. Eight individuals resided in an attic converted into three illegally-built bedroom apartments. Two first floor bedrooms were illegally subdivided into four bedroom apartments. On the second floor, two bedroom apartments were illegally constructed. The garage had been converted into an illegal apartment as well.

Although multiple families lived in the house with their children, township inspectors did not see any cribs in the home. There were no working smoke detectors, carbon monoxide detectors or fire extinguishers in the dwelling. Inspectors reported that the rear exit on the first floor was blocked by a refrigerator.

No one living in the house would give inspectors their name.

Last year, Lakewood inspectors also found more than 10 men at a time living in the residence the other absentee landlord owned. The men, who work in shifts, did not pay their monthly utility bill. Unable to heat the house, the men illegally tapped into a natural gas line. In order to cook, the men used a washing machine hose to connect a barbeque propane tank to the kitchen stove, which a Lakewood code enforcement officer said could have blown up half the block.
Reaves said she was so shaken by what the code enforcement officer told her, she went home and cried.

In July 2008, Reaves began searching the classified notices for a rental home elsewhere. She believed the home she saw advertised in Jackson might be the answer to her prayers.
Built in 1953, the 3-bedroom, 2-bath single family home at 479 Clearstream Road is located on a tree-shaded side street off Hope Chapel Road, near the border with Lakewood.

"The back yard was adjacent to the woods and it was so quiet," Reaves told NJ News & Views.
Her hopes for a peaceful life were never realized.

Meir Hertz, the owner of the Jackson rental home, responded to her concerns for her family's safety by dismissing them.

"Let's drop your games and pretenses," Hertz told Reaves in an October 16 e-mail. "Shortly after you signed the lease you pointedly advised me that you are a paralegal, and added that you are fully familiar with the implied warranty of habitability. Shortly thereafter all kinds of things started going "wrong" in the house, which was occupied w/o a problem before you moved in."
Reaves told NJ News & Views that the former tenants of the rental home were living there when she first visited the home to see it.

Reaves continues to receive former tenants' mail.

NJ News & Views asked Jackson Township officials to see all Commercial Certificates of Occupancy (CCO) for the home. Although Hertz has rented it out to more than one family, he filed only one CCO with his Landlord Identity Statement in August 2008 - the same month Reaves and Hertz began disputing the habitability of the residence.

In his e-mail, Hertz accused Reaves of setting up a habitability defense to justify withholding payment of her $1,700/month rent, which she had already paid in advance to the end of the year.

"I told you in a previous email that I finally got the picture," Hertz continued in his October 16 e-mail to Reaves. "You've answered your own questions as to why you would deliberately damage my property to set-up a false "habitability" claim and shirk your responsibility to pay rent!"

By filing township and state papers to establish his position as the home's landlord, Hertz laid the legal groundwork in state Landlord Tenant Court to evict Reaves and her family.

Although Hertz registered the Jackson rental home in which Reaves is living, he has not registered any of the other rental homes he owns in Jackson or in Lakewood.

Jackson Inspector Ray Powell inspected the home at 479 Clearstream Road on August 22 - three weeks after Reaves moved into it. According to the printout of the inspection results, the home failed to meet township requirements for habitability on first inspection.

Powell cited reasons for failure that included lack of well water certification, which the county health department must issue, no fire extinguisher, stove burners that did not all work, no hot water, lack of certification for the fireplace, a broken window crank in the den, lack of a filter for the gas hot water heater, a leaking sink, poor drainage in the basement, no permit issued for the hot water heater and an unspecified problem with the outside and landing base steps.

On August 28, Powell returned to the home to reinspect it. This time the home passed.

A reporter asked Powell on October 23 why he passed the home if its carbon monoxide alarms went off when Reaves turned on the heat after August 28. Powell said he only tested the home heating by turning it on for about 10 minutes - the same amount of time Reaves told a reporter she had turned on the heat before alarms signaled a problem with the heater.

Powell said he believed Reaves may have had the heat on a longer period of time before experiencing problems with it.

Powell said Hertz provided all required documentation on second inspection that he failed to provide on first inspection. He told NJ News & Views that he did not ask Hertz for copies of the documents after a reporter requested to see them.

Although Hertz denied any responsibility for providing a habitable home, he said in his October 23 e-mail that his professionals would correct the problems Reaves had with the property after moving into it.

On a section of the Landlord Identity Statement Hertz signed on August 26 and filed with Jackson on August 27, a box that was initially checked off stated that the building was not heated by fuel oil. The check mark was scribbled out and the box below it, which stated that the building was heated by fuel oil, but that the landlord did not furnish heat, was instead checked off.

That is not what Hertz is required to ensure through his position as Administrator of the Lakewood Township Residential Assistance Program (LTRAP).

Hertz describes LTRAP on its Internet Web site as "a local housing program established for the purpose of providing quality affordable housing to eligible persons with limited incomes, through a partnership of public and private resources."

LTRAP is sponsored by Lakewood Township, receives Federal funding through the Department of Housing and Urban Development (HUD) and is operated by the Lakewood Tenants Organization (LTO), a non-profit organization.

LTRAP duplicates services provided by the Lakewood Housing Authority. Both LTRAP and the housing authority provide Section 8 affordable housing assistance with HUD funding.

According to the LTRAP Web site, all rental units subsidized under the Section 8 affordable housing program must meet Housing Quality Standards (HQS). The Web site describes HQS as a comprehensive program established by HUD to ensure that housing it subsidizes is "decent, safe and sanitary."

"The following summary of Housing Quality Standards is intended to help landlords prepare rental units for HQS inspections," the LTRAP Web site stated.

Among the HQS standards were check list items on which a Jackson inspector had failed the Hertz home.

Under General Requirements, LTRAP participating landlords must ensure that "windows, including sills, frames, and sashes...be in good operating condition and must open and close."
HQS Kitchen Standards require that "all stove burners work and that kitchen sinks have hot and cold running water, a drain with trap, and be properly hooked to a sewer line. Neither the faucet nor sink can leak or drip."

The site also provided HQS standards for home heating.

"Furnaces must be serviced every two years, and tested at the initial inspection," Hertz advised the program's participating landlords.

NJ News & Views e-mailed Hertz for comment. A reporter asked in the e-mail if Hertz, as head of LTRAP, supported a requirement to license all owners of multiple residential properties as commercial business owners. The reporter also asked why or why not Hertz took that position.
Hertz did not respond for comment.

Although Hertz owns multiple residential properties that tenants pay him to rent, he has not registered all rental properties as taxable businesses.

Eight years ago, his failure to declare rental earnings resulted in Federal prosecution and conviction of Hertz.

In a May 24, 2000 press release issued by the U.S. Department of Justice (DOJ), U.S. Attorney Robert J. Cleary announced that Hertz had agreed to plead guilty to charges he failed to pay taxes on income he earned from management of Newark's Brick Towers public housing project.
The release reported that a company owned by Hertz also pled guilty to making false statements and paid $1 million to HUD.

"Meir Hertz, 51, of Lakewood, admitted to U.S. District Judge Mary I. Cooper that he filed a false 1992 joint personal tax return," the 2000 press release reported. "Specifically, Hertz admitted failing to report approximately $30,000 in management and security fees that he received from Hertz Management, a Hertz-owned company created by Hertz to receive fees from Brick Towers."

The DOJ also charged that Hertz earned $89,000 from Hertz Management during 1993, but instead filed a tax return attributing the earnings to his children.

The press release did not provide the ages of the children at the time.

"For both tax years covered in both counts, Hertz avoided more than $20,000 in income taxes by not reporting the income as his own, according to the plea agreement," the press release stated.

Hertz was also part-owner of BTA Properties Inc. (BTA), which managed Brick Towers. The press release stated that BTA falsely certified that Brick Towers met HUD habitability standards in order to received HUD Housing Assistance Payments (HAP).

"On about June 8 and July 7, 1995, BTA submitted HAP requisitions to HUD, certifying that the project's units were 'decent, safe, sanitary and occupied or available for occupancy, according to the corporate plea agreement," the press release noted. "In fact the buildings had fallen into extreme disrepair. Based on the BTA certification, HUD made $362,987 in HAP payments to BTA."

Under the corporate plea agreement, BTA paid $1 million and turned the Brick Towers buildings over to HUD. The payment included $362,987 in restitution to HUD. The court waived all further fines against BTA.

The press release reported that under the civil settlement, Hertz was excluded for five years from participating in Federally funded projects. The court allowed Lakewood Township and LTO trustees to determine his continued administration of LTRAP.

Cleary credited the HUD Enforcement Center in the successful prosecution of the case.

According to the press release, former U.S. Housing Secretary Andrew Cuomo created the HUD Enforcement Center as part of the Federal government's effort to crack down on waste, fraud and abuse of HUD programs.

Eight years later, the May 24, 2000 press release announcing the program's successful prosecution of Hertz is no longer posted on the DOJ Web site with other archived releases.
On July 20, 2008, Brick Towers, built in 1969, also disappeared, the victim of a wrecking ball. The Newark Housing Authority, which bought the twin buildings from HUD in 2002 for $1, plans on redeveloping the site as new housing.

The Newark Star Ledger reported the story, but referred to Hertz as the former landlord of Brick Towers without naming him.

Last week, a reporter for NJ News & Views asked Jackson Mayor Mark Seda in a telephone voicemail message to identify the locations throughout town of Jackson's affordable housing. The reporter also asked in the voicemail message if Jackson's affordable housing included rental homes.

Seda did not return the call for comment.

Although Hertz oversees a residential rental program in Lakewood that receives Federal funding, all participating Lakewood landlords have not filed a mercantile license with the township.

Their numbers are multiplying.

Like Hertz, many area investors have been acquiring residential homes in Lakewood and neighboring townships such as Jackson, which they seek to redevelop in the future as mixed-use, multiple-family housing for a growing student population. Until that time, many of the investors are renting out the homes without reporting the income they earn from them - just as the government successfully charged Hertz with failing to do.

Without government oversight, a growing underground economy of unregulated residential rentals has flourished.

Last year, Lakewood committeemen failed to adopt an ordinance that would have required an annual inspection of all rental properties.

At their August 28 meeting this year, committeemen instead adopted an ordinance regulating basement apartments in many parts of town, which were legalized in 2005 when the committee adopted a revised Unified Development Ordinance (UDO).

According to attorney Abraham Penzer and Toms River planner Brian Flannery, committee adoption of the basement inspection ordinance served a purpose other than ensuring public safety.

During the October 6 meeting of the Lakewood Zoning Board of Adjustment, Penzer and Flannery discussed the rental ordinance during their testimony on behalf of Paradise Realty Group LLC, an applicant seeking to redevelop the former VFW building on a 31,000-square-foot triangular site at Monmouth Avenue, 9th Street and Squankum Road.

The applicant proposed a project incorporating both townhouse units separated by firewalls and multi-family end units connected with an over-under design.

As proposed, the project would include 10 dwelling units, eight 2-story units with basements, and two 1-story above-and-below units, at 14 units per acre density.

Members of the Lakewood Planning Board referred the application to the zoning board the previous month after professionals disagreed on whether or not the project qualified as a conforming multi-family application or as a non-conforming townhouse development requiring a density variance.

"There's no such thing as a townhouse because the definition says that anything above the unit makes it multi-family in Lakewood," Penzer said. "This application is small compared to the future because the township committee's definition of a basement unit means there's a unit above it. Until the township committee changes nomenclature, everything is multi-family and has to go to the planning board."

Lakewood Zoning Officer Ed Mack did not share Penzer's point of view.

"What is (the reason for) the design concept?" Mack asked. "To put one of these units above and below so (the applicant) can get around the density (variance)."

Flannery said the applicant chose the project location because it was a neighborhood where there was a need for housing.

"If you look at the Master Plan in Lakewood, we need 11,000 new households in the next 25 years," Flannery said. "We're trying to provide enough units. This is the nicest way to do those number of units. In my opinion, this is nicer than one large building."

In 2005, the township committee appointed Flannery and Penzer to an advisory committee that made recommendations the governing body adopted to revise Lakewood's UDO by legalizing basement apartments.

Committeeman Raymond Coles said legalizing basement apartments would make them safer.
In 2006, the township committee reappointed Flannery and Penzer to the advisory committee to make recommendations to update the township Master Plan.

The advisory committee's 2006 recommendations did not include annual rental inspections.
For years, developers and their professionals have debated township definitions of multi-family and townhouse residences. Despite their participation on an advisory committee, Penzer and Flannery continued to debate those definitions at the October 6 zoning board meeting.

Flannery asserted that the project did not meet the definition of a townhouse development under current township ordinance.

"All of these units are not attached to other townhouse dwellings," he said. "By definition, that doesn't make them townhouses."

Zoning board Chairman Abe Halberstam referenced the recent basement inspection ordinance in his question to Flannery.

"But aren't we allowed to have today townhouses in the basement?" Halberstam asked Flannery.

"There's an ordinance that says if you have a townhouse, you're allowed to put an apartment in the basement," Flannery responded. "We're not looking for townhouses with apartments in the basement, we're looking for multi-family dwellings."

Flannery acknowledged that many townhouse developments include homes with basements.
"The typical townhouse development does have basements and that ordinance came in so that if people were to rent their basements - and I've heard rumors it happens - it would become something more regulated and inspected," he told Halberstam. "If this board determines that (our proposed project qualifies as) multi-family dwellings, they go to the planning board."Mack disagreed.

"According to State of New Jersey, once you build a firewall between any unit, they are considered two separate buildings," Mack said. "For example, in this town we have a school over a Formica factory. Now as silly as that seems…what was the purpose of separating this (if not to create two separate buildings)?

Penzer said the matter was already decided after the committee adopted ordinances that both legalized basement apartments and required their annual inspection in most areas of the township.

Flannery said that under current township ordinance, the project design met the definition of multi-family housing.

"Once you go to something else, its no longer townhouses," Flannery said. "I think that's clearly the intent of the ordinance. This was specifically added to the ordinance in 2005. Any job we've done, we've kept it as just townhouses. A better way to do the multi-family was just this. Our opinion is that this is a good multi-family project for this property."

Zoning board Alternate #1 Moshe Lankry asked if townhouses were a permitted use in the RM zone.

"Yes, eight per acre," Flannery said.

"Why don't you propose it?" Lankry asked.

"If we present this application with this site plan to the planning board, we don't have a density problem," Flannery replied.Penzer said during testimony that the applicant planned on building condominium units separated by firewalls. Residents that live in the condominium units may rent, rather than own them, according to Penzer.

"Whether you like it or not, this is the same building," he maintained. "It is one lot, its all going to be one tax bill. Its going to be condos, rented or not, but at this point, (its condos)."

The building will also have a basement apartment that can be rented, qualifying the project under the rental inspection ordinance as a conforming multi-family dwelling instead of a townhouse development requiring a density variance from the zoning board.

At the conclusion of testimony, Halberstam asked board member Elliott Zaks, who arrived after the meeting had started, to motion for a vote.

Although the zoning board meeting was scheduled to begin at 7 p.m., it did not start until 7:49 p.m. Zaks arrived after 8 p.m.

Zaks, a real estate investor and developer who was also a member of the advisory committee, did not recuse himself during testimony.

Following Halberstam's request, Zaks was first to motion for a vote to refer the project back to the planning board as a conforming application.

Zaks, Halberstam and board member Meir Gelley voted yes on the motion; board Vice Chairwoman Sharon Goralski and board member Obed Gonzalez voted no.
Lankry abstained.

Although the zoning board meeting was opened to the public, the October 6 meeting agenda was not posted on the township Web site before or after the zoning board convened.

The September 2, 2008 planning board meeting minutes that were posted on the township Web site stated only that the application was sent to the zoning board. The planning board meeting minutes omitted testimony that was later discussed at the October 6 zoning board meeting.
Township officials with conflicts of interest participated in the zoning board hearing.

During the first 10 minutes of the zoning board hearing, Flannery testified without first being sworn in. The board also failed to request his professional qualifications, which he did not offer to provide.

As a former member of the advisory committee, Flannery's testimony on behalf of an interpretation of township ordinance Flannery helped legislate was a conflict of interest.
As a former member of the advisory committee, Penzer's legal representation of an applicant seeking an interpretation of township ordinance Penzer helped legislate was also a conflict of interest.

The zoning board is empowered to accept or reject any professional's qualifications before permitting that person to testify before them.

In 2005, Mayor Charles Cunliffe nominated Zaks, Flannery and Penzer to the advisory committee.

In 2006, Mayor Marc (Meir) Lichtenstein nominated all three for reappointment.
During Lichtenstein's year as mayor, NJ News & Views asked him why committeemen approved so many developers and their professionals for appointment to the advisory committee.
Lichtenstein, a former chairman of the zoning board who listed ownership of multiple residential rental properties on his 2006 Financial Disclosure, said he proposed the appointments so developers would not require a zoning board variance.

Over 200 years ago, another group of political insiders also became landlords.
Named for Chief Tamanend of the Delaware Lenape tribe, the Tammany Society established a political machine in 1789 that leased its influence to each succeeding generation of public officials.
The Tammany political machine became powerful by providing welfare services to poor immigrants that received few, if any, from the Federal or state government at that time. In return, immigrants voted for candidates Tammany endorsed for public office. The successful candidates enriched themselves and their associates through government contracts, jobs, patronage and corruption.

From 1854-1934, Tammany was New York City's driving political force.
By the mid-1960s, it ceased to exist.

Its legacy lives on.

Tammany Hall, the group's headquarters on East 14th Street, became a synonym for political corruption.

In Tammany Hall, there is always room for rent.