Inganamort v. Borough of Fort Lee

303 A.2d 298, 62 N.J. 521

• Court: Supreme Court of New Jersey
• Decided: June 25, 1973
• Status: Published

Opinions

The opinion of the Court was delivered by

Weintrattb, C. J.

The single question is whether a municipality has the power to adopt a rent control ordinance. In the Fort Lee and River Edge cases the ordinances were upheld, 120 N. J. Super. 286 (Law Div. 1972); in the North Bergen case the ordinance was struck down. The decisions followed upon different readings of Wagner v. City of Newark, 24 N. J. 467 (1957). We granted certification of the appeals to the Appellate Division before consideration there.

We must assume there is a critical shortage of the housing covered by the several ordinances here involved and that tenants, trapped by the fact, are being exploited. The judgments were entered on pretrial motions in which this factual premise was not challenged. Hence we have the naked legal issue whether the police power delegated to these municipalities includes the power to deal with the evil of inordinate rent arising out of a housing shortage.

There are three constituent questions: (1) does the State Constitution prohibit delegation to municipalities of the power to control rents in a period of critical housing need; (2) if that power may be granted, has the Legislature done so; and (3) if the State statutes vesting police power in municipalities do embrace this area, is the exercise of that power by local government preempted or barred by reason of the existence of other statutes dealing with the subject matter. These are the same questions presented in Wagner, supra, 24 N. J. 467, which struck down a rent control ordinance adopted by the City of Newark.

In the Fort Lee and River Edge cases the trial court read Wagner to turn upon the third question, that is, the existence at that time of a State statute dealing with rent control and preempting the subject, and there being no such statute today, the court found that Wagner did not bar municipal legislation. In North Bergen the trial court read Wagner to hold there was no grant of power to municipalities to deal with the subject. At the argument before us, counsel could not agree as to which, of the three legal propositions was pivotal in Wagner.

We will consider the three questions in the stated order.

I

Home rule is basic in our government. It embodies the principle that the police power of the State may be invested in local government to enable local government to discharge its role as an arm or agency of the State and to meet other needs of the community. Bergen County v. Port of New York Authority, 32 N. J. 303, 312-314 (1960) ; 56 Am. Jur. 2d, Municipal Corporations, § 23, pp. 87-88. Whether the State alone should act or should leave the initiative and the solution to local government, rests in legislative discretion.

There is a limitation upon the power to delegate. As Wagner pointed out, some matters must be dealt with at the State level. 24 N. J. at 478-479. Eor example, the law of wills or the law of descent and distribution may not be left to local decision. Nor could the State leave it to each municipality to say what shall constitute robbery or whether it shall be punished. The reason is evident. “The needs with respect to those matters do not vary locally in their nature or intensity. Municipal action would not be useful, and indeed diverse local decisions could be mischievous or even intolerable.” Summer v. Teaneck, 53 N. J. 548, 553 (1969).

But execpt for such subjects, the Legislature may invest in local government the police power to devise measures tailored to the local scene. The Legislature may decide to do so for sundry reasons. A problem may exist in some municipalities and be trivial or nonexistent in others. And if the evil is of statewide concern, still practical considerations may warrant different or more detailed local treatment to meet varying conditions or to achieve the ultimate goal more effectively. Thus in holding that a municipality may deal with racial “blockbusting” notwithstanding the constitutional limitation upon the delegation of the police power, we said in Summer v. Teaneck, supra, 53 N. J. at 553:

* * * Blockbusting depends very much upon the local scene and varies accordingly in its intensity and hurt. Although the evil warrants the concern of the State itself, it would not be inappropriate to permit the municipalities also to wrestle with it. There is no inevitable need for a single statewide solution or for a single statewide enforcing authority. On the contrary, it may be useful to permit municipalities to act, for, being nearer the scene, they are more likely to detect the practice and may be better situated to devise an approach to their special problems. Then, too, municipalities may provide enforcement personnel the State has not supplied in adequate numbers and hence be able to nip an offensive movement with which a State agency could not deal until after the event.”

And it is of no constitutional moment that local decisions will mean diversity of treatment within the State. Diversity is an inevitable incident of home rule, for home rule exists to permit each municipality to act or not to act or to act in a way it believes will best meet the local need. West Morris Regional Board, of Education v. Sills, 58 N. J. 464, 477 (1971), cert. denied, 404 U. S. 986, 92 S. Ct. 450, 30 L. Ed. 2d 370 (1971); Two Guys from Harrison, Inc. v. Furman, 32 N. J. 199, 231-232 (1960); Jamouneau v. Harner, 16 N. J. 500, 517-521 (1954), cert. denied, 349 U. S. 904, 75 S. Ct. 580, 99 L. Ed. 1241 (1955) ; In re Cleveland, 52 N. J. L. 188, 190-191 (E. & A. 1889); Paul v. Gloucester County, 50 N. J. L. 585, 608-609 (E. & A. 1888).

And the Legislature may invest the police power in local government in several ways. It may grant power without any restriction by way of stated standards for its exercise. Board of Health, Weehawken v. New York Central R. R. Co., 4 N. J. 293, 300-301 (1950). This of course is the usual format. Or the Legislature may limit the grant by specifying standards as it did in the case of zoning (the Constitution itself contains some standards with respect to delegation of that power, Art. TV, § 6, ¶ 2). Or the Legislature may itself fashion a detailed treatment of a subject, and leave it to local government (or to the local electorate) to choose whether the statute shall operate within its borders. See In re Cleveland, supra, 52 N. J. L. at 190. This approach was used, for example, with respect to Sunday closing in the statute involved in Two Guys from, Harrison, Inc. v. Furman, supra, 32 N. J. 199, and with respect to rent control in the statute upheld in Jamouneau v. Harner, supra, 16 N. J. 500.

Whether the police power to deal with a subject should be granted without restriction or should be tethered in one way or another is for the Legislature alone to say. We know of no principle under which the judiciary may insist upon one technique rather than another with respect to any topic which may constitutionally be left to local decision. And the constitutional limitation we mentioned earlier with respect to matters which require statewide uniformity' is equally applicable no matter which technique of delegation the Legislature may choose. So, for example, to refer again to the subject of wills and of descent and distribution, the doctrine which forbids the delegation to municipalities of the power to enact an ordinance upon those subjects would equally bar the Legislature from leaving it to the several municipalities to say whether the State statutes upon those subjects shall be operative within their borders.

If the foregoing views are correct, then the question whether the Legislature can leave rent control to local decision was decided in favor of the power to do so in Jamouneau v. Harner, supra, 16 N. J. 500. There the State statute by its terms became “operative in any municipality in which the governing body shall adopt a resolution reciting that there is a housing space shortage therein and that rent control is required in such municipality for the protection, safety, health and general welfare of the people of such municipality” (16 N. J. at 517). A parallel provision existed for decontrol and recontrol. This Court deemed this procedure “to be an eminently practical way of covering the areas of the State in need of rent control, and thus to avoid state-wide control in excess of the need and the attendant risks of going beyond the reasonable limits of the power” (16 N. J. at 517).

The question whether Wagner held the Legislature could not constitutionally delegate to municipalities the power to deal with this subject matter arises because Wagner referred to the proposition that some matters, such as wills and inheritance, are exclusively for statewide legislative decision. But Wagner did not say the Constitution places the subject of rent control in that ambit. Rather, without stating an explicit view upon that subject, Wagner went on to say that “Moreover, legislative history since the inception of federal controls after the beginning of World War II shows a clear recognition that rent control was not a matter within the realm of municipal power ■without express authority from the State” 24 N. J. at 479 (emphasis is ours).

The words we have just italicized repel the idea that Wagner meant the Legislature could not delegate to local government the power to deal with exploitation of a housing shortage. It is notable, too, that Wagner did not cite or distinguish or overrule Jamouneau, supra, 16 N. J. 500, which, as we have said, held that rent control may be left to local decision, there by the device of local option.

Indeed, Wagner stated as its final point that the City of Newark could act only under the terms of chapter 146 of the Laws of 1956. That statement involved the premise that rent control could be left to local decision. A number of municipalities, named in section 13 of that statute, Newark being one of them, had petitioned under Art. IY, § 7, ¶ 10, of the State Constitution for a special or local statute authorizing the adoption of an ordinance with respect to rent control. In response the Legislature enacted chapter 146 authorizing such ordinances, which statute, by its terms, was inoperative in any municipality unless the statute was adopted by its governing body, § 18. Thus chapter 146 delegated the power to local government and Wagner deemed the delegation to be valid.¹

If Wagner intended to say rent control may not be left to local government, Wagner would be singular. Cases elsewhere unanimously recognize that the power may be invested in local government. See Huebeck v. City of Balimore., 205 Md. 203, 107 A. 2d 99 (Ct. App. 1954); Teeval Co. v. Stern, 301 N. Y. 346, 93 N. E. 2d 884 (Ct. App. 1950), cert. denied, 340 U. S. 876, 71 S. Ct. 122, 95 L. Ed. 637 (1950); I. L. F. Y. Co. v. City Rent and Rehabilitation Administration, 11 N. Y. 2d 480, 230 N. Y. S. 2d 986, 184 N. E. 2d 575 (Ct. App. 1962); Hartley Holding Corp. v. Gabel, 13 N. Y. 2d 306, 247 N. Y. S. 2d 97, 196 N. E. 2d 537 (Ct. App. 1963); 8200 Realty Corporation v. Lindsay, 27 N. Y. 2d 124, 313 N. Y. S. 2d 733, 261 N. E. 2d 647 (Ct. App. 1970), appeal dismissed, 400 U. S. 962, 91 S. Ct. 367, 27 L. Ed. 2d 381 (1970); Warren v. City of Philadelphia, 382 Pa. 380, 115 A. 2d 218 (Sup. Ct. 1955). Decisions which concluded that the Legislature had not empowered municipalities to act did not suggest a constitutional impediment would stand in the way if the Legislature chose to do so. See Old Colony Gardens, Inc. v. City of Stamford, 147 Conn. 60, 156 A. 2d 515 (Sup. Ct. of Errors 1959); Ambassador East v. City of Chicago, 399 Ill. 359, 77 N. E. 2d 803 (Sup. Ct. 1948); City of Miami Beach v. Fleetwood Hotel, Inc., Fla., 261 So. 2d 801 (Sup. Ct. 1972); Tietjens v. City of St. Louis, 359 Mo. 439, 222 S. W. 2d (Sup. Ct. 1949); cf. Marshal House, Inc. v. Rent Review and Grievance Board of Brookline, 357 Mass. 709, 260 N. E. 2d 200 (Sup. Jud. Ct. 1970). That rent control may be left with local government is an accepted proposition in 7 McQuillin, Municipal Corporations (3d ed. 1968), § 34.563d, pp. 613-614, and in Rhyne, Municipal Law (1957), p. 538. We note also that the President’s Economic Stabilization Regulations (Phases I, II and III) dealing with rent controlled units expressly refer to “the laws or regulations of a State or local government, or an agency or instrumentality thereof” (emphasis is ours), 6 C. F. R. § 301.105 (1973), thus accepting local action as part of the scene.

If there were doubt as to whether this power could constitutionally be invested in local government, it would be relevant to add that Art. IV, § 7, ¶ 11, provides:

“The provisions of this Constitution and of any law concerning municipal corporations formed for local government, or concerning counties, shall be liberally construed in their favor. The powers of counties and such municipal corporations shall include not only those granted in express terms but also those of necessary or fair implication, or incident to the powers expressly conferred, or essential thereto, and not inconsistent with or prohibited by this Constitution or by law.”

This rule of construction reflects a need we referred to above, that local government be equipped to deal with matters of local concern which, if left to State action, might not be met expeditiously or at all. It is well to keep in mind that our legislators are elected from districts rather than at large. This is a source of strength, but it holds the weakness that a localized ps-oblem is less apt than a general one to invite prompt action at the State level. It is fitting, therefore, to take an expansive view of the powers which may constitutionally be given to local government. The Legislature of course would be free to supersede local ordinances if it thought it advisable to do so.

It is peculiarly appropriate thus to deal with rent abuse. The history of the subject tells us that the problem may call for federal action, or State action, or local decision. That the problem may thus be general or local is evident from the process of decontrol with respect to prior emergencies wherein the federal government and then- the State government and finally local government withdrew as the evil dissipated.

II

Hence we do not doubt that municipalities may constitutionally be empowered to act in this area. The next question is whether our statutes should be read to grant that power, especially in the light of the constitutional rule of construction in Art. IY, § 7, If 11, quoted above.

Two statutes were involved in Wagner. One was N. J. 8. A. 40:69A-30 of the Optional Municipal Charter Law which reads:

The general grant of municipal power contained in this article is intended to confer the greatest power of local self-government consistent with the Constitution of this State. Any specific enumeration of municipal powers contained in this act or in any other general law shall not be construed in any way to limit the general description of power contained in this article, and any such specifically enumerated municipal powers shall be construed as in addition and supplementary to the powers conferred in general terms by this article. All grants of' municipal power to municipalities governed by an optional plan under this act, whether in the form of specific enumeration or general terms, shall be liberally construed, as required by the Constitution of this State, in favor of the municipality.

If we are correct in the view we expressed in Point I that the power to deal with a rental emergency may constitutionally be given to municipalities, we see no escape from the proposition that the statute just quoted is sufficient to that end. We understand that none of the municipalities in the matters now before us are governed by the Optional Municipal Charter Law. We will in a moment refer to the general statute which relates to them. We speak of N. J. S. A. 40:69A-30 because it was involved in Wagner and that fact bears upon the question whether Wagner turned on the lack of a statutory authorization or npon the final point, that the Newark ordinance conflicted with a then existing statute dealing with the specific subject of rent control. We appreciate that Wagner can be read to say that the subject of rent control is beyond the general grant of the quoted statute, but if so, we cannot adhere to that view. If it is accepted that the power to deal with the subject may be given to local government, we see no basis upon which the judiciary can carve out that exception from the expressed legislative intention “to confer the greatest power of local self-government consistent with the Constitution of this State."

The other statute involved in Wagner and involved also in the cases now before ns is N. J. 8. A. 40:48-2 which reads:

Any municipality may make, amend, repeal and enforce such other ordinances, regulations, rules and by-laws not contrary to the laws of this state or of the United States, as it may deem necessary and proper for the good government, order and protection of persons and property, and for the preservation of the public health, safety and welfare of the municipality and its inhabitants, and as may be necessary to carry into effect the powers and duties conferred and imposed by this subtitle, or by any law.

Courts have split upon whether a statute authorizing municipalities to legislate for the “general welfare” is itself a source of municipal power or merely gives auxiliary power in aid of speefic grants. See generally 56 Am. Jur. 2d, Municipal Corporations, § 432, pp. 477-478. If such a statute grants only auxiliary power, there of course would have to be specific authorization to deal with housing emergencies. It was upon that narrow reading of the general statutes in Ambassador East, Inc. v. City of Chicago, supra, 399 Ill. 359, 77 N. E. 2d 803, 807, and Tietjens v. City of St. Louis, supra, 359 Mo. 439, 222 S. W. 2d 70, 73, that it was found there was no municipal power to control rents in a period of shortage.

But we expressly rejected a narroAv view of N. J. S. A. 40:48-2 in Fred v. Borough of Old Tappan, 10 N. J. 515 (1952). There an ordinance dealing with soil removal was assailed because no statutory grant of power spoke expressly of that subject. We held N. J. S. A. 40:48-2 itself warranted the ordinance, saying (p. 520):

* * * This interpretation of R. S. 40:48-2, N. J. S. A., as an express grant of general police powers to municipalities has been made impregnable by the continued legislative acquiescence therein, by the mandate of Article IV, Section VII, paragraph 11 of the Constitution of 1947 that acts concerning municipalities be liberally construed, and by the adherence thereto of the more recent judicial decisions, Ricca v. Board of Commissioners, 1 N. J. Super. 139, 142-143 (App. Div. 1948) ; Edwards v. Borough of Moonachie, 3 N. J. Super. 10, 14 (App. Div. 1949), reversed 3 N. J. 17 (1949) ; Michaels v. Township Committee of Tp. of Pemberton, 3 N. J. Super. 523, 527 (Law Div. 1949) ; City of Newark v. Charles Realty Co., 9 N. J. Super. 442, 457 (Cty. Ct. 1950). If more be needed, we refer to the recent decision in State v. Mundet Cork Corp., supra, 8 N. J. 359, 369 (1952), wherein we held that the enactment of an air pollution ordinance was “a function of the police power conferred on municipalities by R. S. 40:48-2 N. J. S. A. (originally enacted in 1917) for the protection of the welfare of their residents.”

Plainly, therefore, R. S. 40 :48-2 must be considered as an express grant of broad general police powers to municipalities. * * *

We have consistently held the statute is itself a reservoir of police power. Adams Newark Theatre Co. v. City of Newark, 22 N. J. 472 (1956), affirmed, 354 U. S. 931, 77 S. Ct. 1395, 1 L. Ed. 2d 1533 (1957); Kennedy v. City of Newark, 29 N. J. 178 (1959); Moyant v. Paramus, 30 N. J. 528 (1959); Summer v. Teaneck, supra, 53 N. J. 548; New Jersey Builders Ass’n v. Mayor E. Brunswick Tp., 60 N. J. 222 (1972). We are satisfied that N. J. S. A. 40:48-2 confers upon municipalities the power to adopt rent control ordinances.

Ill

The final question is whether existing statutes bar municipal exercise of the power to control rents, or perhaps to put it in other terms, whether existing statutes bar a finding that N. J. S. A. 40:48-2 was intended to include the power to deal with the subject.

As we mentioned earlier, the Legislature enacted chapter 146 of the Laws of 1956 which specifically authorized rent " control ordinances in the municipalities which had petitioned for a special law. The municipalities sought a statute to allay doubt as to their power to act. By its terms chapter 146 was “inoperative in any municipality until it shall be adopted by ordinance of the governing body of such municipality.” Sec. 18. The City of Newark chose not to adopt chapter 146 because it included a mandate for an across-the-board rental increase. Instead the City relied on the statutes discussed in Point II above. Wagner held chapter 146 constituted a legislative declaration that the subject matter shall be dealt with under its provisions or not at all. 24 N. J. at 480-481.

There presently is no statute dealing with rent control and hence the municipal power is not preempted by any such measure. Chapter 146 expired by its terms on December 31, 1957. Sec. 18. Surely it cannot be that when the State withdrew from the area in the 1950s, it thereby ordained that the subject matter shall thereafter be the province of the State Legislature alone.

The only other facet of the preemption issue is whether the statutes dealing generally with the relationship of landlord and tenant, including statutes relating to eviction, should be found to block municipal action. We see no difficulty here. There is no repugnance in terms of policy since the general statutes do not deal with the evil at hand ■ — ■ a housing shortage and concomitant overreaching of tenants.

That control of rents affects the exercise of the right to contract with respect to property is undeniable. But the right to contract is subject to the police power and no less so when the police power is exerted at municipal level. 56 Am. Jur. 2d, Municipal Corporations, § 437, p. 483. Whether an ordinance relates to zoning, or contains a housing code, or imposes upon the landlord duties relating to health, it necessarily limits the use of property or the right to contract with respect to it. That the ordinance imposes restraints which the State law does not, does not spell out a conflict between State and local law. On the contrary the absence of a statutory restraint is the very occasion for municipal initiative. The police power is vested in local government to the very end that the right of property may be restrained when it ought to be because of a sufficient local need.

The judgment in Harris v. North Bergen is reversed and the matter remanded 'for further proceedings not inconsistent herewith.

The judgments in Inganamort v. Fort Lee and in Continental Gardens v. River Edge are affirmed. In these matters counsel for plaintiffs state they did not intend to abandon other issues and assumed the judgments concluded only the issue we have dealt with. Plaintiffs may apply to the trial court for leave to pursue their other challenges.

1 Wagner described chapter 146 as a “special act,” as indeed it purported to be. In a later case, in which it was claimed the constitutional procedure for the enactment of a special law had not been met, it was held that chapter 146 could be sustained as a “general” law. In re Freygang, 46 N. J. Super. 14 (App. Div. 1957), affirmed, 25 N. J. 357 (1957). But whether chapter 146 was a special law or a general law is not significant here. The relevant fact is that chapter 146 delegated the power to local government, and Wagner deemed the delegation to be valid.