ASSEMBLY DEMOCRATS: A-500: Fact vs. Fiction

A-500: FACT VS. FICTION

Fiction: A-500 will increase a town's affordable housing obligations.

FACT: COAH's revised third-round regulations are entirely separate from A-500 and were not voted on by the Legislature. COAH's latest rules increased the affordable housing ratios from one affordable unit for every eight market-rate units to one affordable unit for every four market-rate units for residential construction and from one affordable unit for every 25 jobs created to one affordable unit for every 16 jobs created for nonresidential construction. These ratios were adopted by COAH in early June 2008 and are unrelated to A-500.

Fiction: A-500 will make it more expensive to do business in New Jersey. 

FACT: A-500 will make development costs more manageable and predictable than the current COAH framework.  Currently, developer fees are negotiated on a town-by-town basis, and can add as much as 10 percent  to the cost of a project. Such fees threaten to impede economic development across the state. That is why A-500 implements a flat, statewide 2.5 percent fee. According to the Office of Legislative Services, this fee is expected to generate approximately $164 million annually.

Fiction: The new 2.5 percent  nonresidential development fee will not cover the cost of producing the affordable housing generated from nonresidential construction.

FACT: Municipalities have a multitude of options at their disposal to meet their affordable housing obligations, many of which cost a town little or no money. By offering density bonuses and increased set asides, towns can make it possible for private developers to completely subsidize the cost of constructing significant numbers of affordable housing units. Municipalities also can extend expiring affordability controls on already existing affordable housing, at little or no cost. Moreover, COAH offers a package of bonus credits to towns for a variety of housing units, including previously constructed projects.

It is estimated that roughly $150 million derived from developer fees sits idle in municipal affordable housing trust funds statewide. Towns can use this money to "buy down" for-sale, market rate units - a process that can cost as little as $20,000 per unit, substantially less than the cost of constructing an entirely new home. Accessory apartments - such as those over a garage or in the ground-floor of a house - also count toward a town's COAH obligation and can cost as little as $20,000 per unit, too.

Fiction: A-500 will promote sprawl.

FACT: A-500 recognizes that certain regions of the state may not be right for high-density development.  Under A-500, municipalities located in the Highlands, Pinelands, Meadowlands,  and Fort Monmouth and Atlantic City areas will be able to coordinate to provide affordable housing based upon regional concerns. This will allow the proper balance to be struck with regard to environmental considerations and accessibility to public transportation.

Fiction:  A-500 will force towns that don't have sufficient developable land to meet their affordable housing obligations anyway.

FACT: A-500 will codify COAH's vacant land adjustment, which allows towns with a lack of available, developable land to have their affordable housing obligations lowered. COAH regulations currently allow towns to apply for a vacant land adjustment. Memorializing the vacant land adjustment in state law will ensure this tool will continue to assist towns in complying with their obligations.  COAH also offers towns the option of applying for durational adjustments, which temporarily absolve towns of affordable housing obligations based on insufficient water and sewer until such infrastructure becomes available.

Fiction: A-500 had no broad base of support.

FACT: A-500 was actively supported by a diverse coalition of mayors, realtors and developers, building and construction trade unions, faith-based organizations, housing advocates, environmentalists, planners, and the business community. All of these groups realized the importance of policy that reinforces the constitutional responsibility of towns to comply with their affordable housing obligations. Equally as important, these stakeholders realized the benefit sound housing policy could have for growing the state's economy and creating good jobs.

Fiction: A-500 will make it more difficult for towns to become COAH-compliant.

FACT: A-500 recognizes that many municipalities have been assigned unrealistic affordable housing obligations under COAH's revised third round rules.  That is why the codification of the vacant land adjustment is essential to giving COAH and municipalities the tools they need to manage the impact of the revised third-round rules.

Fiction: COAH's revised regulations ignore the State Plan.

FACT: DCA Commissioner Doria has launched an important effort to revise the State Plan.  One of the primary goals of the State Plan is to reconcile differences and conflicts in DCA and DEP regulations, particularly as they relate to the construction of housing and waste-water rules.  A draft plan is expected to be unveiled in September, with six public hearings to be held throughout October and November, and final adoption by the State Planning Commission this December.

Fiction: A-500 is the final word on affordable housing reform by the Legislature.

FACT: The administration and Assembly and Senate leadership will hold a series of meetings over the coming months with key stakeholders to receive input on round-three concerns.  Together, we will address concerns without comprising the constitutional obligation that every town has to provide affordable housing.

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