The Garden State would revamp the way it handles affordable housing if a bill that has passed both houses of New Jersey legislature is signed into law by Gov. Jon Corzine.
Corzine spokesman Jim Gardner told BUILDER that the governor and his staff have been busy preparing the state’s budget, but now that document has been signed, the governor plans to turn his attention to another 60 or so bills that have been passed by the state senate. These bills require Corzine's signature to become law.
The bill, A.500, aims to increase access to affordable housing throughout the state and will use fees on commercial development projects to help pay for it. According to Gardner, Gov. Corzine supports the measure. “The governor does believe that the bill includes some important reforms, and it will help us achieve the goal of building more affordable housing,” Gardner said. “But, every bill that passes legislature is subject to a thorough review.”
The New Jersey Builders Association, while generally supportive of increasing affordable housing, isn’t sure the bill in its current form is the right one, or the one that will ultimately become law. “There are still concerns as it relates to the Council on Affordable Housing itself, and its own infrastructure on how it’s done to be able to deal with the new requirements of the legislation,” said Tim Touhey, executive vice president of the New Jersey Builders Association.
Reaction has been mixed from the N.J. Builders Association membership, which contains home builders and developers of mixed use and some commercial projects. Among the concerns are the fees being suggested. “Whether that is the answer is still to be seen,” Touhey says. “You can put a fee structure on something that doesn’t move development forward. So the jury will be out on that.”
Currently, New Jersey municipalities can pay other New Jersey cities to take their affordable housing requirements, which critics say has pushed the bulk of affordable housing to a handful of poorer cities, while limiting affordable housing options in the suburbs. The bill, as proposed, would remove that option, called the Mount Laurel doctrine.
The bill would create a 2.5 percent fee for all commercial developments in the state. The fees would be assessed on the value of improvements made and could be challenged by a developer. The money would go into New Jersey's State Affordable Housing Trust Fund, which would oversee the creation of more affordable housing.
The bill also requires housing developments which receive state funding to set aside 20 percent of the community for affordable housing. The new rules also would mandate that state housing programs reserve 25 percent of all affordable housing units created for very low-income households, which are those who earn less than 30 percent of the area’s median income.
Touhey says this could be a sticking point due to the gap in creating such housing and the amount for which it can be sold. “Some of the challenges of it may be related to the low, low-income units, and how you can cover those costs,” he said. “Clearly they talk to the density issue, which is important, however when you begin to look at the low-income spectrum of units, density is one way around it, but there is going to have to be some subsidy sources.”
The bill also requires all affordable housing units that are removed through redevelopment to be replaced on a one-for-one basis if they have been occupied within 18 months. The displaced are to be given first priority for those homes.
Any residential development needing a zoning change to move forward would also have to include a minimum number of housing units for low- or moderate-income households. The percentage would be determined by the New Jersey Council on Affordable Housing, based on economic feasibility and the proposed density of the project.
Finally, any transit-oriented development created around a public transportation hubs would be required to build 20 percent of its units as affordable housing.
Ethan Butterfield is senior editor, business, for BUILDER magazine.