NJ’s COAH: Finding Common (and Vacant) Ground

A version of this post first ran on Rooflines -- the blog of the National Housing Institute -- BΩS

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As New Jersey’s Council on Affordable Housing, or COAH, continues to defend its plan to use a growth-share model to encourage towns to build working class and affordable housing, we’re reminded of one thing that became clear a long, long time ago.

Full consensus is going to be hard to reach, but common ground is attainable.

Since everyone appears, at least in public, to share the same philosophy that communities should have socioeconomic diversity, there needs to be some common ground between the builders and affordable housing advocates who argue the new rules will allow suburbs to not live up to their intended housing goals, and those towns—about half of the state’s 566 municipalities—who argue they will be burdened—both financially and spatially—in being required to build far too much affordable housing based on current models.

Most of the remaining municipalities are currently participating in the COAH process, with the Council granting credit for approximately 70,000 affordable units, 36,000 of which have been completed, 14,000 of which were rehabilitated, and 10,000 that were transferred through Regional Contribution Agreements—a since-legislatively revoked method of fulfilling a town’s growth-share requirement where a municipality can transfer funds intended for affordable housing to another town.

It’s been 30 years since the original court decision that put the wheels in motion for the state to establish some sort of affordable housing guidelines, and they’ve been remodeled several times since. The most recent, established in 2004, outlines a growth-share model that encourages 4:1 ratio for market rate and affordable units, as well as one affordable unit for every 16 jobs created.

COAH has said repeatedly that it’s model is a guideline and that it would work with individual towns as they submit their 10-year COAH proposals, but the balking continues, the posturing mounts. Tough economic times only adds superficial logic (often outlined in the breathtakingly uninformed reader comments in various New Jersey newspaper Web sites) to the case that towns can’t afford to build and that the state should not be mandating them to do so.

So the latest, where The New Jersey League of Municipalities, a voluntary organization of towns throughout the state, has accused state officials of withholding materials that include a state-wide vacant land assessment, is just another step in forestalling goals that we should all work for: inclusive communities, workforce housing, not being priced out of your town.

COAH, according to an article in The Star-Ledger, responded in kind with a 130-page response to the challenges, that makes the case for the new rules, arguing that the agency had been reasonable in fielding municipal concerns.

Back in July 2008, when the state refined its latest COAH model, I argued that the Department of Community Affairs, the agency that oversees COAH, and its commissioner, Joe Doria, should go on a state-wide tour, selling the plan at public meetings, much like Gov. Jon Corzine did on his pitch to raise tolls on some key state roadways. Not everyone agreed with him, but there was an element of respect for the outreach tour—an element that he would be happy to re-tap this year as he seeks reelection. But beyond that, I thought that the state should take a real look at rethinking affordable housing:

• We need to move away from the property-tax-based funding for social mandates that benefit everyone (yes, even you there, living on the horse farm in bucolic northwest New Jersey). The implementation of an affordable housing policy that works and is reasonable can be funded by more than just property owners.

• The developer’s fee—the aforementioned 2.5 percent fee—and the municipal mandate system of funding affordable housing is ludicrous. This is important because it could very well thwart all economic growth in New Jersey with ratable-generating enterprise moving over to places like Pennsylvania.

Hopefully because they were reading Bowie of Suburbia, the state Legislature last month voted on a moratorium for this developer’s fee that exempts projects through July 2010, calling it an impediment to economic recovery, but housing advocates have rallied against the moratorium, saying that a freeze would pose a missed opportunity to generate revenue. The fee, they said, would help to promote that roadmap to more inclusive communities.

Diane Sterner, executive director of the Housing and Community Development Network of New Jersey wrote in a February 2009 op-ed in The Trenton Times that:

[W]e are all responsible in some way for creating the homes we need so our state can grow and prosper. Residential developers pay fees to build. When private individuals build or purchase a home, they pay a real estate transfer fee. A portion of this goes into the state’s housing trust fund to finance housing development.

Agreed, but in a time when major institutions, particularly nonprofits like hospitals and universities, are also struggling with dwindling endowments, but looking to simultaneously expand and remain competitive in the country, a developer’s fee is ever-problematic. The housing advocate’s argument for a developer’s fee goes back to the fundamental case that fees are needed to encourage development. Yes, but let’s do it by way of:

• Creating a value-added tax, like a gas tax that would be used strictly for infrastructure. This can be criticized as a regressive tax, but think of the open space tax that New Jersey voters consistently approve.

We need to get on the stick, and we need to do it now. This economic downturn is scaring a lot of people and it’s only a matter of time before voters are fooled by the shell-game mentality that providing affordable housing is a costly burden for our towns.