Housing

Housing Background, Promoting Smart Growth, Foreclosure Prevention, Housing Near Jobs/Transportation, Base COAH’s Projection on Reality, Coordinate Government Agencies, Being Opportunistic, Improve Access to Housing, Improve and Expand Rail Service

BACKGROUND ON AFFORDABLE HOUSING

Read the Indepth BACKGROUND ON HOUSING

NJ Housing Policy Task Force

We will convene a Housing Policy Task Force of representatives of all housing stakeholders to gather facts and accurate, updated data on population and housing trends, available and appropriate space for new housing, foreclosures in New Jersey, and other information necessary to establish a well informed housing policy, and to discuss the best ways of maintaining a healthy housing economy, including: meeting constitutional obligations to housing, advancing the policies set forth in the State Plan, and addressing the needs of workforce housing. Balance is critical and should drive the process.

The following policy framework is suggested for initial consideration by the Housing Policy Task Force:

PROBLEM:The landmark Mt. Laurel Doctrine that prohibits exclusionary zoning and requires municipalities to provide a fair share of affordable housing remains sound after 35 years. However, the Council on Affordable Housing (COAH) method for allocating municipal housing obligations is showing its age. It relies on an outdated, sprawl-driven planning model, and needs to be reformed in this era of smart growth.
SOLUTION:Comprehensive planning at the State level should not be undermined by the Fair Housing Act. The sprawl-driven model for Mount Laurel housing production is outdated in the era of smart growth.

Read further the solution on PROMOTING SMART GROWTH

PROBLEM:The critical housing needs in this country are increasing as soaring foreclosure rates are putting people on the street. Bold, collaborative strategies are needed to address this problem.
SOLUTION:Foreclosure prevention program participants should be freed from COAH’s affirmative marketing requirements, and COAH should change its rules to enable this.

Read further the solution on FORECLOSURE PREVENTION

PROBLEM:The state’s stringent environmental statutes and rules are making development increasingly difficult in the suburbs and exurbs.
SOLUTION:The State has to foster development in communities where jobs are located and where mass transit is readily available.

Read further the solution on HOUSING NEAR JOBS and TRANSPORTATION

PROBLEM:COAH does not adequately recognize that New Jersey is losing jobs; the facts and projections on which the COAH Growth Share methodology is based are inaccurate.
SOLUTION:COAH should recognize the reality of negative employment growth.

Read further the solution on BASING COAH PROJECTIONS on REALITY

PROBLEM:State agencies such as the Department of Environmental Protection are not coordinated with COAH policy, leading to contradictory plans that undermine the intended effect of the State Development and Redevelopment Plan (the State Plan).
SOLUTION:State agency turf battles are causing big problems. “Agency coordination” has become an oxymoron. This must stop.

Read further the solution on COORDINATING GOVERNMENT AGENCIES

PROBLEM:Government policies often work independently of market condition, ignoring the changing realities of the housing prices.
SOLUTION:Government should take advantage of current declining housing values to increase the supply of affordable housing before the next housing market upswing

Read further the solution on BEING OPPORTUNISTIC

PROBLEM:In the status quo, the workforce population (those within 80 to 120% of the median income) is hurt by the Mt. Laurel doctrine because it is not eligible for affordable housing, but nevertheless must help subsidize the cost of affordable units even though it is not in a good financial position to do so. It is important to continue to provide for those in need of decent, affordable housing, but we must be mindful not to overburden our workforce households in the process.
SOLUTION:Workforce housing (for households earning 80 – 120% of median income) is an important element in a balanced housing supply for New Jersey, yet is rarely built. This needs to change.

Read further the solution on IMPROVING ACCESS to HOUSING

PROBLEM:The State’s commitment to passenger rail is declining, despite a growing need.
SOLUTION:Passenger rail will be increasingly important to the Smart Growth future we desire. New Jersey must invest in improving and expanding passenger rail service.

Read further the solution on IMPROVING and EXPANDING RAIL SERVICE

Background in Depth

In 1975, the New Jersey Supreme Court found in the Mount Laurel case that an “exclusionary animus” by some suburban municipalities prevented affordable housing construction. The Court ruled that municipalities must provide through zoning a realistic opportunity for their fair share of the regional need for affordable housing. In a second decision in 1983, the Supreme Court invited builders to sue non-compliant towns for a “builder’s remedy” to construct inclusionary housing, where each affordable unit entitled the builder to four market units.

Two years later, in 1985, the New Jersey Legislature established a framework for municipalities and counties to plan in a regional and collaborative way. The State Planning Act called for the adoption of the State Development and Redevelopment Plan (SDRP or State Plan) following a consensus building process that brought together all stakeholders to identify and reconcile issues of concern. The SDRP, adopted in 1989 and readopted in 2001, helped to shape a new vision for New Jersey as a place where reinvestment replaces disinvestment in urban areas and where suburban sprawl is increasingly being curtailed and replaced by center based development and urban redevelopment.

Also in 1985, the Legislature enacted the Fair Housing Act, recognizing the Supreme Court’s Mount Laurel Doctrine and establishing the Council on Affordable Housing (COAH). The Act charged COAH with determining New Jersey’s need for affordable housing, apportioning it to municipalities on a fair share basis and administering a system to certify compliance with the constitutional obligation as interpreted by the Courts.

The objective of assuring quality affordable housing in every community remains a New Jersey priority, as it should. However, it is time to recognize that conditions are very different today than when the original Mount Laurel case was decided. With private reinvestment now threatening the supply of safe and decent affordable housing in our cities and older suburbs, and with smart growth advocates around the country calling for reinvestment in our urban infrastructure, including transit, it is time to rethink the role of affordable housing policy within the statewide policy framework.

The 35-year old Mt. Laurel mandate, forged in the era of rampant sprawl, should not serve to discourage the urban revitalization that has started and now seems possible. We must redefine COAH’s rules and mandates. It is time to develop affordable housing strategies that can be seamlessly woven into the fabric of State Plan policies and that serve to promote, rather than undermine, other important State Plan policies and objectives.

The new reality of development around mass transit served communities requires fresh and creative thinking. To address this challenge, I will convene a Housing Policy Task Force, consisting of representatives of all of the housing stakeholders, to examine how we can meet our constitutional housing obligations and at the same time advance the multiplicity of State Planning objectives and policies, including the provision of workforce housing that is essential to a healthy economy.

Promoting Smart Growth

The State Development and Redevelopment Plan, developed with broad stakeholder consensus, is New Jersey’s official policy guide, and State housing policy should be compatible and complementary to the broader array of State policies. This was intended from the beginning, when the State Planning Act and Fair Housing Act were crafted and adopted.

Once fair share housing obligations are met, a community’s zoning should not be overridden by court decisions; if they are, all incentives for communities to participate in the COAH process will be undermined.

Affordable housing should not be undermining other State resource conservation objectives by converting open space to vast inclusionary developments. This results not only in loss of precious open space, but in costly infrastructure, traffic congestion and pollution.

COAH’s growth share rules have the unintended consequence of motivating towns to create 100% affordable housing projects rather than zone for inclusionary development, wherein the affordable units are interspersed with market rate units. Towns should be given more flexibility and choices for meeting their affordable housing obligations.

COAH’s frequently changing rules have led municipalities to prepare expensive fair share plans that were out of date before they could be certified, making towns skeptical of whether the calculated obligation is in any way realistic.

Foreclosure Prevention

Right now, if a person is in a market-rate home that is converted to an affordable unit, the person must vacate the house and enter into the pool of qualified low or moderate income individuals. Too often this person is not selected to return to his/her own home. We need to allow homes to be converted into an affordable unit without removing the resident and displacing the family.

Housing Near Jobs/Transportation

The private market cannot do it alone. With 21% of all residential building permits issued in New Jersey in 2008 for units located in Hudson County, the State should:

Create incentives for developers to make this a trend for all our cities (rather than a one year anomaly for the Hudson River “Gold Coast”);

Provide incentives for urban projects to locate affordable units with market rate units, since relatively few urban housing projects are inclusionary; and

Restore Regional Contribution Agreements (RCAs) on the condition that they produce new housing units in the receiving municipalities, not simply rehabilitate old units.

Over $100 million in RCA funding has gone toward urban housing reinvestment since the Courts first approved RCAs. However, most of that funding supported urban housing rehabilitation that, while beneficial, does not expand the stock of new, code compliant affordable housing, which is a higher priority. Currently allowed only in certain regional planning jurisdictions (e.g., the Pinelands, Highlands, and Meadowlands), RCAs can fuel urban reinvestment and allow opportunities for affordable housing to be built in mass transit served suburban communities. RCAs for new units should be permitted statewide.

Base COAH’s Projection on Reality

Conditions have changed significantly since the COAH Growth Share Methodology was prepared.

COAH forecast 790,465 additional New Jersey jobs from 2004 to 2018, (averaging 52,698 per year), but instead of adding 289,839 jobs over those 5.5 years, New Jersey lost 65,700 jobs between ’04 and the first half of ’09.

To meet COAH’s projection, starting immediately and continuing through 2018, over 90,000 jobs would have to be created each year, an outcome that would be highly unlikely even in a very robust economic climate, and is virtually implausible now.

Coordinate Government Agencies

There has long been a serious disconnect between DEP policy regarding wastewater management planning and the affordable housing efforts overseen by the court and COAH. DEP and DCA frequently work at cross-purposes, with COAH sometimes undermining responsible wastewater planning and DEP sometimes torpedoing affordable housing interests. Turf battles in Trenton play out in communities, with expensive, destructive and senseless consequences.

New Jersey’s inability to provide effective State agency coordination has undermined the State Plan and the ability of local planning efforts to revitalize our cities, make more livable communities and protect our open spaces and natural resources.

Being Opportunistic

Declining housing values have created unique opportunities for government intervention to increase the supply of affordable housing. New Jersey policymakers must take advantage of these opportunities to expand the variety and supply of affordable housing.

Such market-driven strategies as conversions of single family homes to two-family homes are affordable housing’s “low hanging fruit”. With basic infrastructure in place, excess floor area in single family homes can be repurposed to create affordable units in many communities. Unlike the high fixed costs of new unit creation when open space or former commercial and industrial sites are converted to housing, single family conversions make more efficient use of existing housing resources and public infrastructure.

The owner of such a two-family house could be the market rate buyer of the larger apartment and derive an income stream from the rent paid on the other unit by the low income buyer or tenant. If widely embraced at the municipal level, this model would provide downward pressure on housing costs as an increasing supply of smaller, more affordable units was forced to compete for tenant dollars. And this approach can help those who will need to age in place for as long as possible.

Improve Access to Housing

The Mt. Laurel doctrine has actually worked to the detriment of workforce housing development, since the costs of affordable units are borne by buyers or tenants of the market rate units – usually high-end units designed to command high prices so as to offset developers’ costs to build the affordable homes. Thus, housing that is affordable to middle income working families is increasingly scarce. The state should create incentives for workforce housing.

Improve and Expand Rail Service

The return to the cities and older suburbs is currently being fueled by easy access to rail transit in areas with density sufficient to maintain its operations. The new “ARC” rail tunnel into New York City will provide tremendous benefits to New Jersey residents and towns and will further fuel reinvestment and redevelopment along commuter rail lines. New Jersey must position itself to derive maximum benefit from the ARC tunnel by improving existing commuter rail infrastructure and capacity, reactivating commuter lines that were discontinued in the 1970’s and 80’s when the sprawl trend took hold, and exploring reactivation of abandoned rights-of-way to re-create rail connections that have been lost altogether.

In major transportation corridors that lack rail service, such as the Route 1 “Einstein’s Alley” corridor between Trenton and New Brunswick, investments must be made in alternative public transit such as Bus Rapid Transit.

Smart growth advocates and new funding initiatives must be directed to the activities that will “prime the pump” for reinvestment in this infrastructure and the growth it will spawn.

New Jersey’s transit initiatives of the 21st century, which have never been needed more, can build on the bones of a system that crisscrossed the nation’s most densely populated state before automobiles became popular. These investments will be a central element of all smart growth activities, and are critical to the state’s long term prosperity.