S1 Affordable Housing Reform Bill Stalled. Or is it?
By: Henry T. Chou, Esq.
Given the uncertainty surrounding affordable housing in New Jersey, it is important to understand the proposed laws that will determine how such housing is provided in the future. While the Legislature has not passed any laws concerning affordable housing in 2010, there is pending legislation that could have a dramatic impact on the landscape of affordable housing for generations to come.
Throughout his campaign in 2009, Governor Chris Christie repeatedly vowed to “gut” the New Jersey Council on Affordable Housing (COAH), claiming that the agency was mired in bureaucracy, imposed unreasonable financial burdens on towns across the State, and produced little actual affordable housing. On Governor Christie’s first day in office on January 19, 2010, Senator Raymond Lesniak (D-Union) introduced S1, a bill that proposed to abolish COAH and establish a new scheme for administering affordable housing throughout the State.
Early in his administration, Governor Christie commissioned a task force to study the issue of affordable housing and to make recommendations on changes that should be made. In May 2010, the task force issued a report that recommended many of the same changes contained in S1. Subsequently, many of the proposals in the task force were incorporated into S1 as the bill underwent revisions in the legislative process.
Controversial Reforms Proposed in S1
Under the version of S1 currently pending in the legislature, COAH would be abolished within six months, and affordable housing compliance would largely be left to municipalities themselves, with the New Jersey Department of Community Affairs (DCA) providing nominal oversight. Moving forward, any new residential housing comprised of five dwelling units or more - be it new construction, redevelopment, rehabilitation, infill, or adaptive reuse – would be subject to a 10% set-aside for affordable housing. Developments of less than 5 housing units would be subject to a 5% set-aside, with fractional units being subject to a development fee.
Under S1, developers would not receive density bonuses or compensatory benefits in connection with providing a 10% or 5% set-aside of affordable housing. Towns would be required only to make a "reasonable effort" to facilitate the economic viability of those developments, whatever that may mean.
Municipalities that have a certain percentage of existing multifamily housing or price-restricted housing would be deemed “inclusionary” municipalities. Towns not deemed “inclusionary” would have to revise their master plans and zoning ordinances to establish methods for providing a variety and choice of housing, or otherwise preserve 20% of its vacant, developable property for development of "workforce housing,” which would be reserved for households making equal or less than 120% of the median income.
In towns not deemed “inclusionary,” developers would be able to apply to the planning board for a use variance to build an inclusionary development, with the proposed development being considered an "inherently beneficial use.” In towns that are deemed "inclusionary," an application for inclusionary housing would not be viewed as one seeking to provide an "inherently beneficial use," making it a difficult endeavor.
Status of S1 and Prospect of Passage
The Senate passed S1 on June 10, 2010, and it appeared imminent that the bill would be passed by the Assembly and signed into law by the Governor by June 30, 2010. However, many stakeholders in the process recognized that there were serious flaws in the bill that needed to be addressed, and worked to make sure the bill was not rushed through the Legislature. Towards the end of June 2010, the Assembly Housing and Local Government Committee chose not to release the bill for a full vote by the Assembly, citing the need for additional discussions in light of comments made by various affordable housing coalitions, planning organizations, religious groups, environmental advocates and the homebuilding community.
Assembly Speaker Sheila Oliver has indicated that S1 requires additional revisions and that the Housing and Local Government Committee will continue to work on it over the summer in hopes of revising the bill to a point where it can be voted upon by the Assembly.