TRENTON, N.J. The number of affordable housing units that local municipalities are required to deliver would drop by more than half under a new bill that is drawing opposition from both sides.
The controversy involves the latest efforts to abolish the much-criticized Council on Affordable Housing (COAH) and reform the state's affordable housing laws.
In mid-December, the state Assembly approved a bill to overhaul the affordable housing rules and scrap COAH, the state agency responsible for establishing and monitoring municipal affordable housing obligations.
The agency's remaining duties would be transferred to the Department of Community Affairs. The legislation also calls for eliminating a 2.5 percent fee on commercial development and reduce some municipalities' obligations to provide low- and moderateincome housing.
However, the efforts soon stalled when the measure was pulled from the Senate. Gov. Chris Christie had indicated that he would veto the bill for not going far enough to reduce local housing obligations. As a result, the issue remained unresolved heading into 2011.
Officials at the Fair Share Housing Center in Cherry Hill, N.J., oppose the Assembly bill, saying it will drastically slash the number of affordable housing units created in the state.
The number of affordable units that local municipalities are required to provide would drop from roughly 115,000 to 56,000 during the next 10 years, says Kevin Walsh, associate director of the Center.
His group believes that estimate may even be high, and that the legislation would reduce local obligations by about 71 percent.
On the positive side, the bill targets units for very low-income families and individuals, he says. However, it fails to ensure that enough affordable housing units will be built to meet the state's needs, according to Walsh.
As examples of the reductions, the Center points to an analysis that reveals that Bridgewater Township's obligations would decline by 81 percent, from 1,604 to 306 units. Cranbury Township's requirements would fall 94 percent, from 486 to 31 units.
New York's LIHTC performance
Since 1987, the state of New York has allocated more than $6 billion in lowincome housing tax credits (LIHTCs) to nearly 1,200 developments. Only eight developments have been foreclosed upon, representing less than 0.7 percent of the portfolio, according to a new study released by New York State Homes & Community Renewal (HCR).
The tax credit program has assisted in more than 53,000 units of affordable rental housing.
“Performance Report of New York State's Low Income Housing Tax Credit Portfolio 1987-2009” attributes the low foreclosure rate to:
- ”ºHCR's prudent selection criteria in its qualified allocation plan;
- ”ºThe fact that nearly 90 percent of the developments that have received a LIHTC allocation have subordinate fi- nancing from a public entity as part of their permanent financing;
- ”ºHCR's requirements for establishing and monitoring project reserves (HCR requires LIHTC developments to create an operating reserve with 1 percent of total development cost. Replacement reserve requirements are $250 per unit annual for senior and new construction projects and $300 for family and substantial rehabilitation developments.);
- ”ºThe active monitoring of the physical and financial status of projects; and
- ”ºThe experience and capacity of the state's affordable housing industry.