Dan McGuire, director of Homeless Solutions Headquarters Development Corp. and advocacy and communication chairman for the Morris County Housing Alliance, said that while there are some concerns about the general outline of the plan, at least the subject had been raised in a manner that can foster discussion.
Paul Chrystie, executive director of the Coalition for Affordable Housing and the Environment, of which Homeless Solutions is a member, said, "We will finally talk about this, that is doing something."
It is key that Roberts, a powerful Trenton politician, announced the plan, he said. Roberts, as speaker, can schedule the necessary hearings and get bills filed with committees to move the plans along.
Plan outline
The Democrats' plan, briefly, calls for:
• Elimination of Regional Contribution Agreements, which under state rules set up under the Council of Affordable Housing, allow towns to pay other communities to create affordable-housing units.
• Require state development projects, such as transit villages, to include 20 percent affordable units.
• Create a state Affordable Housing Trust Fund, as many other states have done.
• Increase the maximum income for a resident to qualify for an affordable home from a state average of $63,000 to $87,000.
• Produce more housing for low-income families.
• Ensure a new school funding formula accounts for municipalities that accept low- and moderate-income families with school-age children.
• Require one-for-one replacement of affordable units lost through redevelopment.
• Require towns to spend municipal housing trust fund dollars on affordable housing within their own borders.
A report
The Democrats' plan followed by a few weeks a report by state public Advocate Ronald Chen that called for COAH to fully calculate the need for affordable housing and eliminate gimmicks that reduce that number without providing housing.
COAH was ordered by a state appeals court to produce by the end of the year new regulations and housing numbers for municipalities for its third-round of rules. The court determined that COAH's regulations failed to generate enough affordable housing and often made it harder to develop it.
McGuire said the change on the regional contribution agreement rules would be welcome, especially since they do not reflect the accurate cost of rehabilitation or construction of a new housing unit. While the credit per unit is now $40,000, the amount began at $20,000. Towns were given full credit for an affordable-housing unit, while not contributing the full price of such a unit, he said.
Morris to Essex
Twelve Morris towns have contributed $12 million to regional contribution agreements for 685 units of housing, mostly in Newark and East Orange.
He said one concern is the creation of a state affordable-housing trust fund. McGuire said he would not want local trust funds to be drained to fill the state fund.
The issue locally, he said, is that until COAH revises its rules, towns are sitting on millions of dollars that could be used to fund affordable-housing projects.
Twenty-four Morris towns have rules in place that allow them to collect developers fees, which are placed in a trust fund. Nineteen of those towns have about $20 million on hand.
The Democrat plan suggested that the state affordable-housing trust fund could use realty transfer fees, collected by county clerks, as a source of funding.
Morris County Clerk Joan Bramhall said that last year she collected $69 million in realty transfer fees, sent $53 million to the state and $13 million to the county freeholders. The state uses the fees to fund in part the grants used by counties and towns to modernize records storage.
Bramhall said she is allowed to keep $2 for each real estate transaction, funds that must be applied to the improvement of her office.
She said she would be concerned if the uses of the realty fees changed.
Private investment
Chrystie said that realty fees also help support the state's balanced housing program, and said he would be concerned if that funding was threatened.
Melody Federico, director of housing development for NewBridge Services, Inc., and co-director of the Housing Alliance, said that the Democrat proposal to allow private developers of inclusionary development projects to compete for federal low-income tax credits would potentially draw more private investment into the market. This is a primary method of funding affordable-housing construction in the state, the Democrats said.
She said NewBridge has used federal tax credits to develop housing. They are a funding mechanism that allows a private company to buy tax credits, and then working with a nonprofit like NewBridge, fund the construction of housing through a competitive process.
More private investment into the affordable-housing market could reduce the dependence for organizations like hers on government funding, Federico said.
Transit villages
Chrystie said the Democrats call for making 20 percent of housing in state development projects like transit villages offers a way to build such housing, and offers developers the opportunity to make money on the project.
Morristown and Netcong have approved transit village plans, and Dover is working on one.
Chrystie said he had a concern in the proposed increase in the maximum income that would qualify a family with an income of $87,000 for affordable housing because it could displace lower-income families from any housing that could be built. Chrystie said that the Democrats acknowledged this concern by stating that middle-income families' needs are important but must not supersede the needs of lower-income families.
High cost
McGuire and Federico said the potential income increase is a recognition of the high cost of housing in New Jersey. The average home price in Morris County is more than $500,000, McGuire said.
Families with incomes at the county median income of $89,000 can qualify for median priced housing under COAH rules.
Federico said that a rule of thumb is that a family can afford a home valued at roughly three to four times its annual income. At $63,000, a family could afford a home worth $252,000, of which there a few in the county.
Even at the median income of $89,000, she said, four times that amount is $356,000, still well below the county's average home price.
Driven from the market, she said, are many workers whose salaries are well below the county median, such as teachers, nurses, laborers and government employees.
