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September 6, 2012

Re:  Affordable Housing Trust Funds Update

Dear Mayor:

Earlier today, the Fair Share Housing Center released, as part of a motion to the Appellate Division, a copy of draft regulations that were prepared by the Department of Community Affairs (DCA) and sent to Office of Administrative Law. These proposed regulations were to be published in the New Jersey Register, which would have commenced a public comment period. The regulations, however, were pulled back when the Appellate Division invalidated the Governor’s Administrative Order which abolished the Council on Affordable Housing.  Effectively, that Court decision reinstated COAH and rulemaking authority reverted back to COAH.    

The public release of the proposed regulations does not change current circumstances.   The August 10 Appellate Division, which prohibited COAH from seizing any trust funds dollars without the approval of the COAH board, remains in effect.  See the League’s August 13 letter for more on that order.  The State has not appealed this order.

The fact that these proposed regulations were submitted to the OAL demonstrates the League’s argument: the term “commit for expenditure” is vague and in need of clarification. The 2008 law provided a four year window from the effective date of the Act or the date of collection, whichever is later, for municipal housing trust fund dollars to be committed.   The law also required COAH to adopt regulations in order to effectuate any forfeiture of trust fund dollars, including defining the term “committed for expenditure.”  Municipalities have not been provided this regulatory guidance and now many housing developments are in jeopardy because local leaders do not know if earmarked funds will be seized by the State.   Loss of this funding will have a negative impact on taxpayers since municipalities may be compelled to secure future funding from taxpayers, instead of from the dedicated fees collected from builders and developers.

For more, please see the August 13 letter as well as the Dear Mayor letter of August 29.  Questions on this letter can be directed to Matthew Weng at mweng@njslom.com or at 609-695-3481 ext 137 or Mike Cerra at mcerra@njslom.com or 609-695-3481 x120.   

Very truly yours,

 

William G. Dressel, Jr.
Executive Director

 

 

 

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