Dear Mayor:

This past Thursday, A-3857, which would eliminate the use of regional contribution agreements (RCAs) as a means of complying with a municipal affordable housing obligation was introduced.  We thought since your community has utilized RCA funds, it would be appropriate to bring this to your attention immediately.

In place of Regional Contribution Agreements, A-3857 would transfer money from the Neighborhood Preservation Non-lapsing Revolving Fund in an amount of not less than $15,000,000 per year into a Housing Rehabilitation Assistance Fund.  The bill provides, however, that if the Neighborhood Preservation Non-lapsing Revolving Fund is less than $70,000,000 in any one year, then the amounts to be transferred would be reduced, and the Legislature is directed to make up the difference.    In other words, the bill contemplates a transfer of existing funds from existing programs to replace RCA funds.

The bill would set up a regulatory framework which would decide the municipalities that would receive the funds.  Instead of simple agreements between municipalities, where suburban and rural municipalities partner with more urban communities to provide affordable housing, the bill would create an expensive bureaucracy, uncertain regulations, and a questionable source of revenues. 

If the State has excess money available that can be used for affordable housing, we would recommend it used for affordable housing in addition to the monies generated by Regional Contribution Agreements.  Unfortunately, history has shown that well intentioned State programs often dry up, and there is no guarantee monies will be available to assist low and moderate income families in need of decent affordable housing if the present proposal were to supplant Regional Contribution Agreements.

For these reasons, the League opposes A-3857.   We suggest contacting your Assembly representatives and ask them to oppose A-3857. While there is no companion legislation in the Senate (yet), we would also suggest asking your State Senator to oppose any efforts to eliminate RCAs.  

The League has a draft resolution (Word, rft, PDF) for your consideration.   If you would like a copy sent via email in Word or faxed to you, or have any questions on this issue, please contact Mike Cerra at mcerra@njslom.com or 609-695-3481 x20.