Senate Passes Bill to Eliminate COAH and Revamp Affordable Housing Rules
By: Henry T. Chou, Esq.
On June 10, 2010, the Senate passed S1, a bill that proposes to eliminate the New Jersey Council on Affordable Housing ("COAH") and implement a new, statewide affordable housing scheme. The bill, sponsored by Senator Raymond Lesniak, was previously approved by the Senate Economic Growth Committee with amendments on June 3, 2010 without any public testimony, much to the displeasure of numerous public interest groups opposed to the legislation. The bill now heads to the Assembly, where it will likely be posted for a full vote by the end of June.
Under S1, any new residential housing comprised of five dwelling units or more - be it new construction, redevelopment, rehabilitation, infill, or adaptive reuse - will be subject to a 10% set-aside for affordable housing. Developments of less than 5 housing units will be subject to a 5% set-aside, with fractional units being subject to a development fee to be formulated by the Department of Community Affairs.
Under S1, developers will no longer receive density bonuses or compensatory benefits in connection with building affordable housing. Towns must merely make a "reasonable effort" to facilitate the economic viability of developments. Additionally, towns would be able to restrcit 50% of the affordable units to persons who already reside or work in town.
Towns that previously petitioned for or received third round substantive certification from COAH would be exempt from some provisions of the new law until 2018, but have the option to opt in at any time. Regional Contribution Agreements are reinstated by the new law, allowing towns to pay other towns to relieve them of their affordable housing obligations.
The new law also exempts towns from affordable housing requirements if they can demonstrate that 7.5% of their existing housing stock is already price-restricted or 33% of the existing housing stock comprises non-luxury multifamily units. Such towns would be deemed "inclusionary" by the DCA, and any such determinations or non-determinations by the DCA would be appealable to the Appellate Division.
Towns that are not deemed "inclusionary" would have to revise their master plans and zoning ordinances to establish methods for providing a variety and choice of housing, and shall reserve 20% of vacant, developable property for development of "workforce housing," which will be reserved for households making equal or less than 120% of the median income. In these towns, developers could apply to the planning board for a use variance to build an inclusionary development, with proposed project being deemed an "inherently beneficial use" for purposes of the use variance application. In towns that are deemed "inclusionary," applications for inclusionary housing would not be viewed as one seeking to provide an "inherently beneficial use," making such applications difficult, if not impossible, to be approved.
The bill would also eliminate the much-maligned 2.5% non-residential development fee, with the exception of any commitments made by non-residential developers to municipalities as part of a preliminary or final site plan approval prior to July 8, 2008.
Upon passage, S1 would release municipalities from an prior unmet housing need assigned by COAH. It calls for the complete elimination of COAH within 6 months, with all remaining and new responsibilities under the Fair Housing Act being transferred to the DCA. The bill would also eliminate the regional approach to planning established under the Mount Laurel doctrine and years of COAH administration.
Finally, S1 defines developable land as properties that have not designated as open space, have reasonable access to sewer, have slopes of less than 15% and are not wetlands. The land also must not be located in special planning areas like the Pinelands, the CAFRA area, the Highlands, the Meadowlands and areas within Federal Clean Water Act jurisdiction.