October 2003

Zoning News

Copyright by American Planning Association

Changes to New Jersey Affordable Housing Law

By Rebecca Retzlaff, AICP

The New Jersey Council on Affordable Housing (COAH) — the state agency charged with administering New Jersey's fair-share housing program — has announced a plan to overhaul the system that has governed affordable housing planning in the state since 1985.

The proposed changes will eliminate the fair-share formula in favor of a new "growth-share" approach. The new approach is a significant change from the previous method of calculating affordable housing goals. It seeks to link the production of affordable housing with municipal development and growth, whereas the previous approach assigned housing goals based on population growth projections and other data. Although many housing advocates have argued for the growth-share methodology, COAH's approach has generated substantial opposition in the housing community, who see it as watering down its principles. The new "growth-share" approach seeks to link the production of affordable housing with municipal development and growth.

Under the fair-share approach, municipalities that chose to adopt the fair-share goals established by COAH and plan for their allocated amount of affordable housing would receive protection from lawsuits brought by builders under the Mount Laurel State Supreme Court decisions. The proposed rules will change the way those goals are calculated.

The 1975 and 1983 Mount Laurel decisions ruled that developing municipalities have a constitutional obligation to provide a realistic opportunity for the construction of low- and moderate-income housing. A zoning decision or ordinance that denies the opportunity for the construction of affordable housing fails to meet this constitutional requirement and makes the municipality vulnerable to lawsuits. Municipalities that have addressed their fair-share housing goals and have been certified by COAH are protected from Mount Laurel lawsuits. However, participation in the COAH process is voluntary, and municipalities that elect not to participate risk lawsuits from developers.

As of 2001, 48 percent of the cities and towns in New Jersey were participating in the COAH process. Between 1980 and 2000, towns across New Jersey created opportunities for 60,731 low- and moderate-income housing units through zoning and other techniques. Almost 29,000 units were constructed. Under the proposed growth-share approach, municipalities shall provide one affordable housing unit for every ten residential units built. Also, for every 30 new jobs created, the municipality shall provide one unit of affordable housing. Therefore, communities that choose not to grow will not be required to plan for affordable housing to satisfy COAH requirements. Existing affordable housing units that are in need of rehabilitation, and unmet obligations for affordable housing from the previous rounds, are also included in the growth-share approach.

The Coalition for Affordable Housing and the Environment, a New Jersey-based advocacy organization, disagrees with the ratios that have been proposed in the new rules. Executive director Paul Chrystie says, "the growth-share ratios that we recommend were one in five for residential units and one residential unit for every five jobs."

According to a Department of Community Affairs press release, the proposed rules will result in better planning for affordable housing based on New Jersey's smart growth agenda. It states, "under the proposed methodology, affordable housing will not drive planning decisions; instead, sound planning decisions will drive the location of, and type of, affordable housing to be provided."

Susan Bass Levin, commissioner of the Department of Community Affairs, and chair of COAH, says "Governor McGreevey and I feel strongly that, by working with towns, giving them the power to control their own growth, and increasing the options for towns to meet their obligation, we have fundamentally changed the way we approach affordable housing in the state of New Jersey."

COAH's growth-share approach allows for a greater degree of freedom for individual jurisdictions, which worries some affordable housing advocates. Alan Mallach, FAICP, research director of the National Housing Institute, says, "the whole thing is part of the strategy to come as close as you can to nullify Mount Laurel." He says, "It is not the growth-share approach that most advocates object to, but the way COAH is doing it."

According to Mallach, included in the proposed rules is a plan to give municipalities credit toward future affordable housing obligations for the units that have already been built or planned for. Affordable housing advocates disagree with this part of the new methodology because it gives credits for units that have not yet been built. In essence, Mallach says, "they have minimized production."

The plan also allows for up to 50 percent of a municipality's obligation to be fulfilled through the development of senior housing, and another 50 percent to be transferred to other municipalities in the same housing region or a statewide affordable housing bank.

A preliminary analysis by Mallach concluded that the proposed rules would dramatically reduce the amount of affordable housing that is likely to be built. The analysis also found that the new rules are hostile to families with children, will reinforce the concentration of non-elderly, minority, and low-income families in central cities, and will do nothing to address sprawl and unsustainable development. Chrystie agrees, saying, "the new rules will produce far less affordable housing...and undermine smart growth by skewing the planning process."

According to Mallach, the bottom line "is that New Jersey suburbs could find themselves completely in compliance with Mount Laurel, without ever building a unit of affordable housing for families for children."