It’s Time for a Return to Common Sense

In Affordable Housing Regulation

By State Senator Sean Kean

Affordable housing is a public policy goal that deserves attention from lawmakers at all levels of government.

For one thing, the inability to afford a home is preventing many of our young people from staying in our state after graduation. It is also forcing many seniors to sell their houses and move out of state. We need homes for them in communities close to their families.

That said, the new affordable housing program implemented this year is unworkable and unaffordable.

Well-meaning people put forward these regulations, but it’s clear they won’t work as well as the old rules. In fact, they won’t work at all.

That means fewer families will be housed in decent, affordable housing, and that communities will sustain lasting damage from lost economic development and increases in property taxes.



A Drag on the Economy



These rules are guaranteed to slow economic development and raise property taxes across the entire state. They already have done so, harming some communities struggling with the effects of an unprecedented economic downturn.

Perversely, that means rules designed to force the construction of more housing for low and moderate income people have and will eliminate jobs those hardworking families will need to pay for these homes, if they are ever built.

Because no adequate source of funding has been found, the rules also will send property taxes soaring. Higher taxes drive low, moderate and fixed income residents from their homes.

A prime example of this is Wall Township in Monmouth County. Municipal officials have calculated that in order for their township to meet its obligation to construct 667 new affordable housing units, township taxpayers will need to pay as much as $20 million in higher property taxes.

A system that drives the elderly and working families from their homes in order to create affordable housing for a comparative few is perverse, and must be fixed today.

Let’s take a look at the flaws in the two major “reforms” this year.

The first, Bill A-500, was signed into law by Governor Jon Corzine in July. It eliminates funding and regulatory flexibility that communities have used to get thousands of homes built.

The second reform measure involved new rules issued by the state’s Council on Affordable Housing. These rules impose far higher quotas on communities than they can accommodate. Amazing, these quotas were developed using a sloppy study that vastly overestimates the amount of land opened for new home construction.

It’s mind boggling that COAH based its quotas on a study that says safe, affordable housing for families with children can be built on highway medians and near airport runways.



A Successful Funding Mechanism Needlessly Killed



A-500’s biggest flaw is that it eliminated the RCA option many municipalities used to satisfy their affordable housing obligations. RCA stands for Regional Contribution Agreement.

In 1975, the New Jersey Supreme Court ruled in its Mt. Laurel decision that each municipality had to provide for construction of low income housing. Many towns have done it by entering into RCAs, which allow towns that can’t accommodate new housing development to pay other nearby cities to build homes.

Critics argued that wealthy towns were using RCAs to push affordable housing into poor communities, avoiding the goal of forcing a town to build housing locally whenever it approved new, local business developments.

That argument complete ignores the fact that many of New Jersey’s 566 towns have very good reasons for not building housing.

Among them: Land use restrictions designed to preserve open space or a community’s character. Environmental protection of sensitive land. An inadequate tax base to support the new schools, roads and sewer systems that new housing requires. And sometimes, a complete lack of land suitable for new housing for anyone.

The RCAs guaranteed that if a town could not build housing within its borders, the housing could be built in a neighboring community, especially those in need of the economic boost and neighborhood renewal that comes from housing construction.

Now that money is gone. One has to ask how its absence will benefit anyone. Without RCA money, many communities that want new housing development won’t be able to build it.

Without the option of putting money into RCAs rather then building, many communities will simply halt all development that triggers a requirement of new affordable housing construction.

The new law does include a new fee on development. It’s estimated to raise about $2 billion over 10 years. The new Council on Affordable Housing rules require construction of about $28 billion in new housing during that period, based on estimates provided by the non-partisan Office of Legislative Services.

The state has no plan to help make up the difference. Until communities can figure out how to fund housing and find suitable space for it, they are canceling or delaying economic development projects.

In Evesham, the town council unanimously decided to halt development of a new shopping center that would have created jobs and generated much needed tax revenue. Their decision was based solely on the fact that the town could not afford to build the dozens of new affordable housing units that would have been required as a result of the new shopping center.



Killing Plans That Were Years in the Making



Some of these projects aren’t new. They’re works in progress that have taken years and millions of dollars to nurture. Now project planners have to consider new, massive and unexpected costs at a time when many of them are finding it impossible to borrow for any project, let alone one burdened by crippling new regulations.

The result is that the developments will be stopped, and so will new housing construction. It’s the perfect lose-lose scenario that only a bureaucracy that didn’t bother to consult community and business leaders could have conceived.

Predictably, the unintended consequences have been and will be expense lawsuits paid for by taxpayers, wasted resources vitally needed for economic development and a complete failure to produce more affordable housing.

From the moment these ridiculous new rules were proposed, my Republican colleagues and I have been calling upon legislative Democrats to reconsider these horrendous policies.

Governor Corzine should heed the pleas of Republicans, now joined by key Democrats such as Senator Ray Lesniak, to delay implementation of these COAH rules.

We also have introduced S-2292, a bill that eliminates the growth share approach of COAH that has hurt towns such as Evesham. Previous affordable housing requirements were based on population growth projections and other data. The new "growth share" approach determines a town's affordable housing needs based solely on the approval of new municipal development.

The legislation would also re-establish Regional Contribution Agreements to assist municipalities in meeting their affordable housing obligations.

Overall, this legislation would allow affordable housing units to be built while promoting economic growth and protecting our already over-burdened taxpayers.