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May 4, 2012

Re: Affordable Housing Trust Funds, July Deadline

Dear Mayor:

The Department of Community has again updated its spreadsheet regarding the status of municipal trust fund dollars. The DCA spreadsheet now indicates approximately $167 million in trust fund dollars are subject to State seizure in July.  The updated spreadsheet is available at: http://www.nj.gov/dca/services/lps/hss/transinfo/reports/ahtf_2008_unspent.pdf

We would like to call your attention to comments made by DCA Acting Commissioner Richard Constable before the Senate Budget and Appropriations committee recently.    In the April 17 hearing, the Commissioner testified on the DCA budget before the Committee, and offered comments in response to questions raised by Senators that may be of interest and assistance to municipalities.   The hearing in its entirety is archived on the Legislature’s website located at: http://www.njleg.state.nj.us/media/archive_audio2.asp?KEY=SBAB&SESSION=2012

Click on the April 17, 11:30 am hearing for the Commissioner’s testimony.

In response to Senator Joseph Pennacchio, Commissioner Constable indicated that the Department interprets “committed for expenditure” to mean, “…an actual executed contract in place…related to the building of housing, not just a concept paper…”    This exchange occurred approximately at the 1 hour, 12 minute point in the hearing.

If you recall, the 2008 Act (PL 2008, c. 46) established a four-year window from the effective date of the Act (July 17, 2008) or four years after the date of collection (whichever is later) for trust fund dollars to be “committed for expenditure.”     The Governor’s proposed budget anticipates $200 million in revenues transferred from the local trust funds.   In addition, the DCA previously testified that up to an additional $53 million could also lapse during fiscal year 2013, which runs from July 1, 2012 through June 30, 2013. 

Additionally, Senator Steven Oroho’s questioned whether towns that forfeit any of its trust fund dollars would receive credits toward their prospective housing obligation.    In response, the Acting Commissioner responded that the Department was “exploring” that option and “…looking into whether that is something that is permissible under the law.”  This exchange occurred approximately at the 2 hour, 6 minutes point in the hearing.  We will encourage the Administration and the Legislature to fully explore this option.

The League supports A-2717, sponsored by Assemblymen Bucco and DiMaio, which would extend for four years the requirement that a municipality commit to expend its trust fund dollars.    This bill is assigned to the Assembly Housing and Local Government Committee. Yesterday, Senator Anthony Bucco introduced the Senate companion to this legislation, S-1894.   This is a simple extension for municipalities and will safeguard these dollars to be used for their intended purposes of providing for affordable housing.   This bill is assigned to the Assembly Housing and Local Government Committee.   

Additionally, Senator Bucco also introduced S-1893, which would permits municipal affordable housing trust funds and payments-in-lieu fees transferred to the New Jersey Affordable Housing Trust Fund to be returned to the originating county for affordable housing purposes.   The League is currently reviewing S-1893.

The League has prepared a draft resolution supporting A-2717 for your consideration, which is posted in PDF format at: http://www.njslom.org/resolutions/resolution-support-A-2717-trust-fund-dollars.pdf and in Word format at: http://www.njslom.org/resolutions/resolution-support-A-2717-trust-fund-dollars.doc

In the meanwhile, if you have a housing trust fund balance we would urge you to speak to your planning professionals and attorneys on how to protect these trust fund dollars. For more on this issue, please see our April 2 Dear Mayor letterMarch 20 Dear Mayor letter or contact Mike Cerra at mcerra@njslom.com or at 609-695-3481 x120.

Very truly yours,

 

William G. Dressel, Jr.
Executive Director

 

 

 

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