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January 11, 2011

Re:   S-1 (COAH Reform Bill) Goes to Governor
Goes to Governor

Yesterday in Trenton, both the State Senate (on a vote of 21 in favor and 16 opposed) and the General Assembly (45-32) passed S-1, which would abolish the Council on Affordable Housing (COAH) and transfer its duties to the Department of Community Affairs (DCA).  The bill includes further substantive and procedural reforms relating to the provision of sufficient safe and affordable housing.

We wish to express our gratitude to the prime sponsor (and prime mover) of this bill, Senator Ray Lesniak, for recognizing the need for affordable housing reform. Advancing this COAH reform legislation has been a laborious process, requiring long hours of analysis, negotiations and discussions with various individuals and groups involved in this issue. Throughout the process, Senator Lesniak has allowed us to be involved in this effort.

However, we are unable to support this bill, in its current form, due to the obligations it would impose on municipalities. The bill increases the obligation for affordable housing from COAH’s gross obligation of approximately 190,000 units to 230,000.  In the first ten-year housing cycle contemplated by S-1, the number of units required is estimated at 48,491.  In the second ten-year housing cycle, in the bill as it existed on January 7, 2011, that number would have doubled to 97,375.  Your League made known this dramatic increase in obligation to all Senators on Monday morning, January 10, 2011.  As a result, sometime late on that same day, a technical amendment was made to the bill allowing part of that second housing cycle obligation to be carried over to the third ten-year housing cycle.  We were not made aware of the change until the evening of January 10, after the vote in both houses.  We recalculated the numbers based upon the technical amendment.  The second ten-year housing cycle obligation, in the bill adopted by the Senate and Assembly, will rise from the first cycle of 48,491 to approximately 62,647 affordable units, with 37,300 carried over into the third housing cycle.  The computation of these numbers is based upon housing stock existing as of 2010, and does not take into account the additional obligation that would be required by future housing growth.

You can access our analysis of your affordable housing obligations, under the terms of S-1, at www.njslom.org/lettersAF-Obligations Under S1 Revised 1-11-11.pdf. And to understand the methodology we used to arrive at those figures, we have posted an explanatory letter, which we had provided to State Senators yesterday. (Please note. That explanation did not account for the final technical amendment.) The letter can be accessed at http://www.njslom.org/letters/Affordable-Housing-calculation-011011.pdf.

As currently drafted, S-1 fails to recognize the ongoing compliance efforts of municipalities, and denies credits granted by COAH and courts to those municipalities.  Also, the bill provides inadequate funding for municipalities to meet the obligations being imposed. The bill would require municipalities to comply with 25% of their obligation through inclusionary development.  It mandates densities of between 6 and 50 units per acre in inclusionary projects (as opposed to COAH’s presumptive densities of between 4 and 8 units per acre).  Additionally, it awards to a developer, who decides to do a rental project, an additional density bonus equal to 20% above the mandated higher densities, with only a 15% set-aside for affordable housing.

Regional planning entities would be permitted to alter the obligations of municipalities within their regions by up to 50%, but could not reduce the overall obligation in the region.  Such a provision will permit reductions in certain municipalities, but will require an increased obligation of up to 50% higher in other municipalities.

The certification process specified in the bill requires municipalities to pay for a second planner, chosen from a State list, to review and certify a municipal plan.  The discretion placed in this reviewer, to alter or exclude compliance mechanisms chosen by the municipality, is very broad.  There is also inadequate funding in the bill for this process.

Lastly, there is no real safe harbor afforded by the bill.  A challenge to the municipal plan of compliance will take the form of a trial in the Law Division of the Superior Court, much in the same way that municipalities are now subject to builder’s remedy litigation if they do not participate in the COAH process or seek a declaratory judgment of compliance.  The process exposes every municipality, where there is a landowner or developer excluded from the plan, to expensive and prolonged litigation.

We urge you to immediately contact the Governor’s Office to express your concerns with this legislation.

If you have any questions or require further information, please do not hesitate to contact me.

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

 

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