NJBIZ.com
New Jersey's affordable-housing problem has lingered for decades, and the Chris Christie administration's plan to abolish the Council on Affordable Housing, which would transfer its responsibility to the Department of Community Affairs, raises questions and concerns about just how the affordable-housing landscape — and how it's governed — will look in the years to come.
"We've been in a box for quarter century — an administrative-driven box — and when people dare to venture outside that box, it's attacked," said Michael Cerra, senior legislative analyst with the New Jersey State League of Municipalities. "I think everyone needs to realize that we need to start over. It's a mindset."
Christie's move is designed to streamline the process, and more effectively and efficiently enable the state to deal with affordable housing, the Fair Housing Act and the Mount Laurel doctrine — the constitutional principle that municipalities must eliminate exclusionary zoning so affordable housing for low-income groups is available. The takeover by DCA makes sense, in part, because the department already works with the New Jersey Housing and Mortgage Finance Agency and other housing initiatives and programs, supporters say.
In an e-mail, DCA Commissioner Lori Grifa said the change will be beneficial "by eliminating much of the excessive bureaucratic process created by the Council on Affordable Housing." Yet, no long-term solution appears in sight to address the state's need for affordable homes.
That doesn't mean the high-stakes players don't have wish lists of their own, though.
The League of Municipalities, a member group of local governments throughout the state, said it wants a cure focusing on four key areas.
"Any legislation would need to lay out reasonable and achievable obligations — whether that be a number, or a formula or a means to determine what the obligation is — it can't be a number that a town will never reach," Cerra said. "Second, and coupled with that, it should recognize work that has already been done by the municipalities, units that are deed restricted now should advance."
Cerra also emphasized the need for adequate funding sources to avoid what would essentially be unfunded mandates, and for the inclusion of legal protection from litigation for compliant towns with affordable housing that meet the promulgated standards.
But for housing advocate Kevin Walsh, of Fair Share Housing Center, local governments themselves are a big part of the problem. He said the law must rein in municipalities, because too often, local communities make unreasonable decisions that discourage private developments and interfere with economic growth.
"When left to their own devices, too many towns will make decisions that exclude workers, result in long commutes, and overall make our state less economically competitive and more racially and economically segregated," Walsh said. "There's a lot of towns in this state, many of which have train stations, that are refusing to provide the zoning to tap the market — and that's completely unreasonable in many instances, and it's why you need a check on municipal discretion."
Walsh would like to see a solution for the state's affordable-housing problem that encourages redevelopment and ensures that people can live close to where they work.
But for the commercial and residential builders in the state that put up those developments, new construction carries with it affordable-housing obligations, which can constrict development.
"The most effective means to do it is to simply allow the market to take care of it, not to necessarily become obsessed with fair share numbers and a whole bunch of rules and regulations," said attorney Thomas F. Carroll III, of Hill, Wallack LLP, in Princeton. "Builders would build where there's a market. It would be a self-implemented type of thing."
Carroll, also land-use counsel for the trade group New Jersey Builders Association, said the Garden State could consider a model along the lines of that provided by Massachusetts, where municipalities are obligated to provide a percentage, to be determined, of housing stock that would be multifamily or truly affordable housing, price-wise.
Another builders trade group, the New Jersey chapter of NAIOP, which represents developers and owners of real estate, wants to de-link its industry from the concept of growth share and eliminate the 2.5 percent "COAH fee" on commercial builders, said Michael McGuinness, CEO of the New Jersey chapter.
Under growth share, municipalities are obligated to build affordable-housing units when commercial developments that createjobs are added, and the commercial developers are required to contribute funds toward future affordable-housing units or make other commitments. That fund is known as the COAH fee, which was implemented in 2008, but later suspended through July 1, 2010.
On Aug. 24, Acting-Gov. Kim Guadagno signed into law a bill extending the moratorium on the fee until July 1, 2013. Developers who paid the fee from 2010 until now will have the ability to "clawback" any funds not spent.
"Any type of funding mechanism for something as important as affordable housing should not be dependent on one sector of the economy, especially a sector that isn't doing well, is not healthy." McGuinness said. "Plus, it's a bit hypocritical. These towns that are charging the fees — they're not building affordable-housing units. There's hundreds of millions of dollars sitting in these local coffers of these towns that has never been used for affordable housing."
According to the DCA, 293 towns have more than $266 million in affordable-housing trust funds.
McGuinness suggested alternative sources of funding should be considered, including using a portion of the realty transfer fee, which is collected when properties are sold — a more stable and equitable way to fund affordable housing, especially in harsh economic times, he said.
State Sen. Raymond J. Lesniak (D-Union) who sponsored the affordable-housing legislation that proposed new guidelines for providing low- and moderate-income housing and was conditionally vetoed by the governor, was unavailable for comment.
