HILLSBOROUGH: Committee applauds proposed elimination of COAH fee

By Audrey Levine, Staff Writer
   A bill lessening the affordable housing obligation some towns face that’s been introduced at the state Senate wouldn’t impact Hillsborough’s affordable housing plan, according to Township Committeeman Carl Suraci.
   But the Township Committee endorsed the measure sponsored by Sen. Raymond Lesniak, D-20th, that would allow for an 18-month suspension on a 2.5 percent fee developers would have to pay to municipalities for non-residential and commercial development.
   ”This had served as an additional cost for businesses to establish themselves,” Mr. Suraci said. “It’s good it will be suspended.”
   Mr. Suraci said, in a separate interview, that the state’s League of Municipalities, and the township, did not support the 2.5 percent fee because it could discourage commercial development with this added cost to open a business.
   In addition, he said, there were also concerns about whether the 2.5 percent would even be sufficient to cover the costs of the affordable housing obligations from the commercial development.
   According to Michael Cerra, senior legislative analyst for the League of Municipalities, Gov. Jon Corzine initially called for a 12-month moratorium on the fee during his State of the State address.
   ”He said the fee has been insensitive for development,” Mr. Cerra said.
   On the other hand, Mr. Cerra said, this fee was to be used by municipalities to pay for the housing obligations that stem from commercial development.
   ”We said that if the 2.5 percent fee was for funding for residential development, how can that obligation accrue if the funding is gone,” he said.
   This new bill, Mr. Cerra said, covers that issue.
   Municipalities, he said, can seek an adjustment for their commercial and non-residential development that may already be spelled out in a submitted affordable housing plan.
   ”Whatever the projected growth is over the 18 months could be adjusted,” he said. “This bill exempts municipalities from any development that was subject to a fee.”
   For Hillsborough, this bill would only affect the third project discussed in its plan, which had been proposed by Hiller Group Premier Homes of Westfield, and will be on Route 206. The project, as part of the township’s COAH plan, was approved by the Township Committee in December.
   This project is an inclusionary development on 50 acres, with 352 market rate units and 138 affordable units. Also included in the development is 20,000 square feet of retail and a 130-room hotel, built at the front of the development. The housing will be situated on the back of the property away from Route 206.
   According to Mr. Suraci, this would probably be the only currently approved project affected by the bill because it is the only one, out of the three approved, which allows for retail building.
   ”The hotel generates some COAH obligations because of jobs generated,” he said. “This bill may reduce units there.”
   Still – according to Andrew Bayer, of GluckWalrath LLP, and the township’s COAH attorney – a municipality is permitted to change its plan three times by 2018.
   Other than the one project, Mr. Suraci said, the bill would be beneficial in Hillsborough for any future development during the 18 months of the fee suspension.
   ”If another development comes, the bill would eliminate COAH obligations,” he said. “It would help for the future.”
   Jennifer Beahm, of Birdsall Engineering Inc., and the township’s COAH consultant, said she does not know if the township will adjust its fair share obligation, and will not know until, and if, the bill is officially passed.
   ”I would assume they would, but I don’t know now,” she said. “For municipalities, I can understand wanting commercial development, but it will hurt them (if they have to shell out funds).”
   Mr. Suraci said the town has chosen to submit its affordable housing plan to the courts for review, but has not received any indication about a time frame for approval from the court magistrate. If the bill is approved, and the township chooses to change its plan, he said they can request to have an amendment added to the proposal.
   ”We will have to sit down with our consultant (if it passes),” he said. “And we can see about making an amendment.”
   According to Mr. Bayer, the township has not received any letters from the courts concerning problems with the plan. He said case law has stated that the courts should follow the COAH regulatory framework in approving plans – although this is not required – which gives 45 days for any initial concerns to be presented.
   With the entire process of registering concerns and allowing the township to respond, Mr. Bayer said, it could take at least nine months for the plan to be fully accepted.
   ”We would hope to have the approval by the end of the year,” he said.
   Still, for those municipalities allowing such commercial development, the bill – with an added amendment that extends this suspension from 12 months to 18 months – also redirects $15 million from the state’s long term debt reduction fund to be used by municipalities to fulfill the affordable housing obligations that come from commercial and non-residential construction.
   ”And a municipality would only have to build commercial development if the state can provide the funding,” Mr. Suraci said at the committee meeting.
   Mr. Cerra said this will ensure that the state is responsible for paying for housing obligations that come out of commercial or nonresidential development during that 18-month period.
   ”It will not fall on the taxpayers,” he said.
   Mr. Suraci said he is glad the burden will not be placed on the individual taxpayers.
   ”The (fee) would have created an obligation onto the taxpayers to pay for the building of residential properties,” he said.
   Despite this positive aspect of the new bill, Mr. Suraci said in a separate interview that the “devil’s in the details,” as the bill does not specify how much money will be provided to individual municipalities. If, for example, the state pays 50 percent of the housing obligation, he said, the municipality must still fund the rest.
   ”In that case, it would still be a burden on the taxpayers,” he said.
   Currently, Mr. Cerra said, the bill is with the Senate Budget Committee, which he anticipates will approve it. It will then be passed on to the floor for a general vote.
   Mr. Suraci said there should be some clarification about what the state will pay once the bill comes through the Budget Committee.
   ”There needs to be clarification of what the state will pay,” he said. “We are waiting to see what they say.”
   The League of Municipalities, Mr. Cerra said, is in support of this bill, and he encourages all municipalities to support it as well.
   Mr. Suraci, for one, said at the meeting that he is in favor of this current plan.
   ”There is finally some rational thought at the state level with regard to COAH,” he said.