GUEST OPINION
By David Sandahl
It will be a classic photo op. Seated at a table in Mount Laurel today (Thursday), ready to sign the most far-reaching legislation in the history of New Jersey housing policy, Gov. Jon Corzine will be flanked on one side by energized affordable housing advocates and on the other by self-satisfied state legislators. Out of camera range, the real beneficiaries of the bill, commercial developers, are already rubbing their hands in anticipation.
The developers are happy because, with the stroke of a pen, the governor will sharply limit the development impact fees they must pay, shifting the burden of paying for affordable housing to municipalities. Combined with new Council On Affordable Housing (COAH) regulations that nearly double requirements for new affordable housing units statewide, New Jerseyans will pay billions more in property taxes over the next 10 years.
How could this happen in 2008 in the midst of a mortgage meltdown, a faltering economy, a state mired in debt, and property taxes that are already the highest in the nation? It is a story of housing reform hijacked by developers at taxpayers’ expense, an almost perfect picture of defective decision making in New Jersey’s Statehouse.
Since the original Mount Laurel decision in 1975, New Jersey has recognized the need for affordable housing. Municipalities are forbidden from using zoning to exclude affordable housing within their jurisdictions. COAH was created to implement rules and a compliance mechanism for municipalities to meet their affordable housing obligations, avoiding so called “builder’s remedy” lawsuits that override local zoning ordinances. In 2004, COAH Round III Rules suggested a new paradigm for affordable housing in New Jersey. Rather than impose fixed obligations, COAH adopted the concept of “growth share.” Affordable housing would be supplied when commercial and residential development occurred, using formulas that equate different types of development with appropriate levels of affordable housing. Critically, the Round III rules allowed impact fees that enabled towns to recoup the cost of building affordable housing from the developments that created the new obligations.
Meanwhile, affordable housing reformers had taken aim at a provision in the housing law, known as Regional Contribution Agreements (RCAs), which allowed a portion of affordable housing obligations to be transferred from one town to another. Assembly Speaker Roberts introduced legislation (A500) this year to ban RCAs by amending the New Jersey Fair Housing Act.
New legal challenges delayed the COAH Round III Rules, replacing the growth share concept with a new set of absurdly derived municipal affordable housing quotas that consultants to COAH could not explain in a tortuous two-page flowchart. In addition to doubling the number of affordable housing units to be provided by 2018, the revised rules published this year made a mockery of prior state-led policies to control sprawl, protect clean water and the natural environment, and preserve open space.
The next blow occurred in the State Senate, where Sen. Raymond Lesniak introduced a bill (S1783) labeled as “Impos(ing) non-residential development fees,” which was referred to the Budget and Appropriations Committee two months ago. Contrary to its stated purpose, the language of the bill instead limits development fees to a fraction of the cost of affordable housing caused by commercial projects, and specifically prohibits municipalities from imposing any other impact fees on developers.
Neither Assembly Bill A500 nor Senate Bill S1783 was subject to rigorous fiscal impact analysis, a normal step in the New Jersey legislative process. And in that process, it comes as no surprise that the two bills suddenly became one, as the Assembly adopted the Senate restrictions on development impact fees and the Senate adopted the Assembly anti-RCA provisions. The now-identical bills passed both bodies with little real debate, despite the pleas of concerned mayors and councils across the state.
Today, in the name of housing reform, Gov. Corzine will sign a bill that endorses impossible targets for new affordable housing in New Jersey and takes developers off the hook for most of the cost that housing will impose on towns. In contradiction of prior state policy, municipalities will need to turn to new taxes to fund their affordable housing obligations, boosting property taxes in New Jersey by hundreds of millions a year for a decade.
It is probably too late to stop this train wreck, which would require a veto by the governor and his commitment to personally lead a better resolution of this thorny issue by the end of the year. Instead, over 200 New Jersey municipalities will battle the COAH rules and the new law in court, further delaying the construction of new affordable homes.
This is housing “reform” as only Trenton could define that term.
David Sandahl is a member of the Hopewell Township Committee and the Hopewell Township Planning Board.