Cost of providing affordable housing will be about three-quarters-of-a-million dollars
By: Vic Monaco
HIGHTSTOWN The Borough Council learned this week that the cost of providing affordable housing over the next decade will be about three-quarters-of-a-million dollars.
But it was a $15,000 change order submitted by a longtime consultant working on the housing plan that drew the most concern from at least two council members.
Planning consultant Randy Gottesman reported at Monday’s council meeting that the creation of 46 affordable housing units and seven rehabilitated units through 2014 would cost an estimated $777,750. The good news, reported by Mr. Gottesman, is that close to $600,000 should be generated from developers’ fees and the remainder could come from a state grant, if all goes as envisioned.
The bad news reported by Borough Clerk Candace Gallagher immediately after Mr. Gottesman concluded his report was that the consultant had submitted a change order that would raise his fee for the housing plan from $10,000 to $25,000.
Councilman Larry Quattrone reacted with the most annoyance, pointing out that the council had no idea the price could rise when it approved the contract.
"We didn’t have that money then and we don’t have it now," he said. "I have a big problem with it, Randy. … That $15,000 could be used for a lot of things in the borough."
Councilman Patrick Thompson also took umbrage, calling the request "not appropriate."
"I don’t believe you’ve done anything underhanded, but we don’t have the money," he said.
Mr. Gottesman responded by saying that in the 12 years he has worked for the borough, on 40 to 50 projects, he hadn’t submitted many, if any, change orders.
"I hope I’ve earned some credibility," he said.
Mr. Gottesman also said he hopes the council appreciates the "volumes of work" associated with preparing a report in accord with new guidelines of the state Council of Affordable Housing.
"Coming up with an estimate in April was very difficult," he said.
The consultant said he would be willing to negotiate the additional charge, and Mayor Bob Patten suggested Mr. Gottesman do that with Ms. Gallagher and Councilman Thompson.
After the meeting, Ms. Gallagher further explained that because much of Mr. Gottesman’s work was performed in 2005, additional payment for that work, if approved, would have to come from the 2005 municipal budget.
We can’t spend money we don’t have, and this was not anticipated," she said. "In these lean times, it is difficult to say whether or not funds will remain at year end that could be allocated to this."
The council approved two resolutions related to the affordable housing plan. One seeks certification from COAH for the plan which is retroactive to Jan. 2004 and calls for 46 new units and seven rehabbed ones by 2014. Twenty-two of the new units and all of the rehabbed ones would be required in the not-too-distant future as COAH would review the borough’s progress in about three years, Mr. Gottesman previously explained.
COAH told the borough about seven years ago that it needed to create 47 affordable units and thus far has been given credit for 25. The balance was rolled into COAH’s current third round of obligations.
When questioned about the need for COAH certification, Mr. Gottesman said certification brings with it intervention and mediation assistance from COAH in the event the borough gets sued for exclusionary housing. He said it would also help prevent a developer from placing a large number of affordable units at one site.
Mr. Gottesman’s report states that the borough anticipates the creation of about 25 new market-rate housing units over the next eight years. Each unit would generate $21,750 from its developer to be put into a borough trust fund, for a total of $543,750. That amount would be combined with $234,000 from similar fees related to the new Enchantment development, thus creating a surplus of $187,750 over the $777,750 projected cost for affordable units.
"Much to my surprise we’re projecting a surplus of funds, which is rare across the state," Mr. Gottesman said.
Despite that prediction, Mr. Gottesman and Planning Board attorney Gary Rosensweig[vmo: check spell: ] urged council to OK another resolution that would cover the borough in the event of a financial shortfall. The resolution states that the borough would take "all appropriate actions to secure and make available sufficient funding from all available sources to address any shortfalls." Unlike an "unacceptable" resolution from COAH, Mr. Rosensweig said, his does not require the borough to use taxpayer money.
"This protects the borough," he said.
The second resolution could become the subject of negotiation with COAH, Mr. Rosensweig acknowledged, even though he expects other communities to approve similar ones.
Mr. Gottesman added that, in the event of a shortfall, the borough can amend its housing plan or seek decertification from COAH.
The plan foresees the creation of six units by reopening a transitional housing program on Stockton Street, which was closed a few years ago after a fire. Councilman Walter Sikorski said nearby residents are concerned with the maintenance of that property.
Twelve units are anticipated through a lease-down agreement with one or more landlords, who would receive money from the borough in exchange for keeping their units affordable, as defined by COAH, for 30 years.
Another 15 units in COAH credits are foreseen by virtue of the borough exceeding its rental housing obligation.
Nine units are anticipated through the pending redevelopment of the rug mill property. The potential redevelopment of the closed Minute Maid plant is not taken into account in the plan. If that were to occur, Mr. Gottesman said, the plan could be amended.
Three units are foreseen on Williams Street and one on South Academy Street.
In other business Monday, the council introduced an ordinance to create an economic development committee to help spur economic growth.