Housing and Community Development Network of New Jersey
March 2010
Dear Senators,
We are writing to urge you to vote no on S.1 when it comes to the floor for a vote on Monday, March 22. Our elected leaders need to be developing ways to encourage economic development that can help move our state towards a prosperous future for all residents. Unfortunately, S.1 does not achieve that important goal. Instead of moving us forward, by encouraging the creation of homes people need near employment and transit centers, it will set New Jersey’s housing policy back nearly 35 years.
Our analysis concludes that the bill will harm New Jersey in the following ways:
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Little, if any housing will be built. Under S.1, most, if not all of New Jersey’s communities may not have to create or rehabilitate the homes that New Jerseyans need. “Inclusionary” communities would be exempt from having a housing need if: 7.5% of their homes are deed-restricted, OR 33% of their housing stock is considered affordable simply by being multi-family, OR they have no reasonable access to sewer hook-ups, OR they have already received substantive certification from COAH. None of these towns would have to create any additional housing, unless they choose to grow in the future.
Little, if any housing will be built. Under S.1, most, if not all of New Jersey’s communities may not have to create or rehabilitate the homes that New Jerseyans need. “Inclusionary” communities would be exempt from having a housing need if: 7.5% of their homes are deed-restricted, OR 33% of their housing stock is considered affordable simply by being multi-family, OR they have no reasonable access to sewer hook-ups, OR they have already received substantive certification from COAH. None of these towns would have to create any additional housing, unless they choose to grow in the future.•Housing for people with special needs will be harmed. S.1 threatens community developers who produce 100% affordable homes, including special needs housing providers. These developers help address the housing needs of our most vulnerable residents– people with disabilities, the homeless, low wage workers, and seniors living on social security. The legislation focuses exclusively on inclusionary developments, which are almost always developed by for-profit companies. While some may partner with non-profits, there is no guarantee they will do so. Further, since many towns will not have a housing obligation, there will be little or no incentive for these towns to build special needs housing, despite the enormous need in our state
Housing for people with special needs will be harmed. S.1 threatens community developers who produce 100% affordable homes, including special needs housing providers. These developers help address the housing needs of our most vulnerable residents– people with disabilities, the homeless, low wage workers, and seniors living on social security. The legislation focuses exclusively on inclusionary developments, which are almost always developed by for-profit companies. While some may partner with non-profits, there is no guarantee they will do so. Further, since many towns will not have a housing obligation, there will be little or no incentive for these towns to build special needs housing, despite the enormous need in our state•Requirements for very-low-income housing are repealed. New Jersey families earning less than $25,000 per year would have less access to homes they need under S.1 than they do now.
Requirements for very-low-income housing are repealed. New Jersey families earning less than $25,000 per year would have less access to homes they need under S.1 than they do now.•There is no mechanism to help fund efforts to make housing more affordable. Going forward, all residential and non-residential development fees are repealed. For-profit commercial and residential developers have been contributing to the creation of homes for over 25 years, through good economic times and bad ones. Especially in tough economic times, everyone with a stake in our economy has to contribute to our future. By eliminating these fees, New Jersey will give up an important source of revenue, more than $100 million annually in 2008 and 2009.
There is no mechanism to help fund efforts to make housing more affordable. Going forward, all residential and non-residential development fees are repealed. For-profit commercial and residential developers have been contributing to the creation of homes for over 25 years, through good economic times and bad ones. Especially in tough economic times, everyone with a stake in our economy has to contribute to our future. By eliminating these fees, New Jersey will give up an important source of revenue, more than $100 million annually in 2008 and 2009. •In the communities that do not meet the standards above, for-profit developers would have do 10% set asides on developments of 20 units or more and 5% set-aside on developments of 5-20 units. This set-aside could be met in a number of ways: on-site, off-site, through rehabilitation and/or contribution to a municipal trust fund. First, this is a minimal set-aside when contrasted to the current level of 20%. Second, this would incentivize developers to reduce larger projects, which would trigger the 10% requirement, down to smaller ones of 5-20 units, which would produce only one affordable unit. Developers may opt to contribute to a trust fund instead, which does not guarantee the creation of any homes. (Currently, towns are holding on to more than $269 million in trust funds). The Planning Commission would be required to set guidelines for the contribution limits, as they are not included in the legislation. In addition, rehabilitation is currently a separate requirement. New Jersey would produce fewer homes people need under these provisions in the future.
In the communities that do not meet the standards above, for-profit developers would have do 10% set asides on developments of 20 units or more and 5% set-aside on developments of 5-20 units. This set-aside could be met in a number of ways: on-site, off-site, through rehabilitation and/or contribution to a municipal trust fund. First, this is a minimal set-aside when contrasted to the current level of 20%. Second, this would incentivize developers to reduce larger projects, which would trigger the 10% requirement, down to smaller ones of 5-20 units, which would produce only one affordable unit. Developers may opt to contribute to a trust fund instead, which does not guarantee the creation of any homes. (Currently, towns are holding on to more than $269 million in trust funds). The Planning Commission would be required to set guidelines for the contribution limits, as they are not included in the legislation. In addition, rehabilitation is currently a separate requirement. New Jersey would produce fewer homes people need under these provisions in the future. •A home would be considered affordable simply because of its size or form (attached townhouses, multifamily and mobile homes would all be considered affordable under this proposal). This is a tremendous mistake. There are plenty of smaller apartments or attached townhouses in desirable areas that are very expensive. Former Governor Corzine’s condo in Hoboken, for example, would qualify as “affordable” under this definition.
A home would be considered affordable simply because of its size or form (attached townhouses, multifamily and mobile homes would all be considered affordable under this proposal). This is a tremendous mistake. There are plenty of smaller apartments or attached townhouses in desirable areas that are very expensive. Former Governor Corzine’s condo in Hoboken, for example, would qualify as “affordable” under this definition.•To address this concern, Sen. Lesniak claims that the State Planning Commission can identify luxury condominiums by aerial views on computers. There are developments all over the state that would need to be reviewed in this fashion, which would be a huge drain on the Commission’s already strained resources. It is odd that the proposal creates a new, micro-managing bureaucracy at the Planning Commission to review aerial photos, in the name of undoing another overly-bureaucratic process.
To address this concern, Sen. Lesniak claims that the State Planning Commission can identify luxury condominiums by aerial views on computers. There are developments all over the state that would need to be reviewed in this fashion, which would be a huge drain on the Commission’s already strained resources. It is odd that the proposal creates a new, micro-managing bureaucracy at the Planning Commission to review aerial photos, in the name of undoing another overly-bureaucratic process.•S.1 rushes through 5,000 RCAs by 2011; half the number of RCAs approved over a 20 year period would be approved in just 18 months. RCAs have, historically, not produced the homes they promised to and have concentrated poverty in New Jersey’s urban communities while letting affluent communities ‘pay-off’ their fair share. Legislators who ended this practice, calling it immoral, less than two years ago need to stand by their principles now.
S.1 rushes through 5,000 RCAs by 2011; half the number of RCAs approved over a 20 year period would be approved in just 18 months. RCAs have, historically, not produced the homes they promised to and have concentrated poverty in New Jersey’s urban communities while letting affluent communities ‘pay-off’ their fair share. Legislators who ended this practice, calling it immoral, less than two years ago need to stand by their principles now.We are happy to discuss this important issue with you before Monday. We hope you will work with us and others who believe a housing policy for the state should come before an overhaul of the bureaucracy. As we have testified, there are a number of mechanisms the state could adopt to develop a housing policy that creates homes where people need them, near transit and employment, while respecting the environment.
Please visit our website for a copy of our proposal:
And please let us know if you have any questions. We can be reached by email at sberger@hcdnnj.org or acohen@hcdnnj.org, or by phone at 609/393-3752.
We hope you will stand up for New Jersey’s future and vote NO on S1.
Sincerely,
Staci A. Berger, Director of Advocacy & Policy
Arnold Cohen, Policy Coordinator
Housing & Community Development Network of NJ
145 W. Hanover Street
Trenton, New Jersey 08618
P: 609/393-3752 x11
F: 609/393-9016
C: 732/406-7604
www.hcdnnj.org
