The Senate Economic Growth Committee, which is chaired by Senator Ray Lesniak (D-Union), is expected to consider a bill today (S2485) which would suspend the 2.5% non-residential development fee dedicated to construction of affordable housing. Many builders, tradespeople, municipal officials and legislators have condemned the fee as an unnecessary tax on development in a time of economic crisis.

According to the Star Ledger, there are policy leaders on both sides of the issue:

James Hughes, dean of Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, said suspending the development fee in today’s economic climate makes sense despite the need for affordable housing.

“The overall condition trumps anything else,” he said. “This is an extremely perilous economic time.”

Housing advocates, however, worry that the actions could water down a law that was enacted after a long grass-roots lobbying effort.

“We should be giving the changes in the bill passed six months ago — that Senator Lesniak himself sponsored — a chance to work instead of trying to undo those significant positive changes in the law,” said Adam Gordon, a staff attorney for the Cherry Hill-based Fair Share Housing Center.

For the full Star Ledger story on the issue, click here.

For a link to the “as-introduced” version of S2485, click here. Disclaimer: There are no guarantees that what you see here is what the committee will actually be voting on today. According to sources in Trenton, there has been a lot of activity relating to this bill in the last 72 hours.

There are other key provisions of the bill that undoubtedly will be of interest to land use professionals, including an attempt to define “inherently beneficial use” in the MLUL. Currently, there is no such definition in the MLUL. Inherently beneficial uses are defined through case law. An inherently beneficial use under the definition proposed would go beyond existing court decisions and include wind, solar and photovoltaic developments.

Monday’s Daily Journal contained an article on the growing momentum for suspension of the affordable housing developer’s fee as to non-residential development (as well as the concerns of affordable housing advocates about the slippery-slope effect).

According to the Daily Journal:

Michael McGuinness, CEO of the state’s chapter of the National Association of Industrial and Office Properties, called suspending the fee merely a good start.

“New Jersey needs an affordable housing funding solution that works in any economy,” said McGuinness. “The way it was being done isn’t really the best way to do it.”

Some local officials say a bigger problem than the fee is that another new rule that towns are required to have more affordable housing whenever offices, stores or industrial developments are built. As long as that’s the case, towns may be reluctant to allow new commercial development.

“There will be no building of affordable housing, there will be no building of commercial properties,” said Randy Brown, the Democratic mayor of Evesham Township who said he killed a proposed shopping center last year because of the affordable housing burden it would have caused.

The plan to suspend the development fee for a year, he said, is “like putting a Band Aid on a whole 20-inch gash.”

For the full article, click here.

One of the arguments against the imposition of the statewide 2.5% non-residential development fee is that it will not raise enough revenue to pay for the affordable housing generated by it under the new Third Round COAH regulations. Now it seems elected officials in Trenton are in accord to to delay or abolish the fee due to the negative impact this additional “tax” is having on commercial development and job creation. One issue the Governor did not address in his State of the State comments was whether municipalities would continue to accrue the obligation of providing affordable housing while the moratorium on the fee is in place.

The article linked below from the Asbury Park Press discusses the issue in more detail. Below is an excerpt from the article:

Gov. Jon S. Corzine Tuesday endorsed a proposal to delay a 2.5 percent developer’s fee intended to help pay for affordable housing.

Money from the fee, levied on the value of commercial projects, is meant to help cover the cost of constructing housing for people with low and moderate incomes.

. . . .

But by not collecting the fee from builders but still requiring the housing, taxpayers would end up getting stuck with the tab, said William Dressel Jr., executive director of the New Jersey State League of Municipalities.

“It just doesn’t make sense to eliminate the source of funding,” Dressel said. “We don’t want the taxpayer to be taxed to do this.”

Along with delaying the fee, state Sen. Sean Kean, R-Monmouth, said municipalities should also get a reprieve from the state’s affordable housing mandates.

“While a moratorium may temporarily stop the damage (Corzine) is doing to our business community, taking away the only source of funding set aside to help municipalities meet their COAH obligations will make matters worse,” Kean said.

For the full article, click here.

Today, Governor Corzine gave his State of the State Address. While the focus was on the economy and his administration’s accomplishments, he did touch upon affordable housing, briefly commenting upon the recent filing deadline for municipalities under COAH’s jurisdiction and calling for a moratorium on the 2.5% non-residential development fee.

The following is from the prepared text of the Governor’s speech:

I will also direct the COAH board to allow for maximum flexibility and ample time for collaborative review of all the 240-plus affordable housing plans submitted by the 80% of the required municipalities who did the right thing and filed plans by December 31st.

Finally, recognizing the economic realities and pressures of the current economic environment, I am calling today for a one-year moratorium on the 2.5% developer’s COAH fee while additionally exempting projects that were in the pipeline before the fee was instituted.

I look forward to working with Speaker Roberts, and Senators Codey and Lesniak, who all support this initiative.

For the Star Ledger on-line article, click here.

“I come here not to praise COAH, but to bury it.”
- Sen. Raymond Lesniak (D-Union)

Senator Lesniak, who chairs the Senate Economic Growth Committee, has become one of the most vociferous critics of the state’s affordable housing regulations on the Democratic side of the aisle over the last several months, joining a cacophony of voices from the Republicans, who are in the minority. However, it is a bit unusual for a committee chair to release his planned opening statement several weeks in advance of the hearing on a bill which excoriates a part of the executive branch, and, by implication, the Governor himself, since he is the head of the executive branch, so I thought this would be an interesting read for those following the debate.

The bill, S-2485, is not yet available on the NJ Legislature’s web page but sources in Trenton say that the legislation will likely call for significant changes to the July 17, 2008 law commonly referred to as A-500 — particularly on the issue of the statewide 2.5% non-residential development fee. Here is a portion of Senator Lesniak’s blog entry with a link to the full article below:

COAH Reform: Life or Death For Our Economy

The following is Senator Lesniak’s statement opening a Senate hearing to be held later this month on reforming the policies of the Council On Affordable Housing (COAH).

I come here today not to praise COAH, but to bury it. In my 31 years of working with government’s bureaucracy, I have never experienced an agency that has so totally failed its mission as COAH has. If the legislature fails to act, and act quickly, COAH’s policies will continue to not produce necessary affordable housing and will stifle job production and the state’s recovery from the worldwide recession.

. . . .

For the sake of the future viability of our state as a prosperous and healthy entity that provides for the general welfare of all of our residents, we must reform COAH. Make no mistake about this effort. We will not tolerate any exclusionary zoning or any efforts to keep low income residents from living in a municipality. But attempts at social engineering that are contrary to the laws of economics, the laws of environmental protection and the laws of common sense are doomed to failure. And failure has been the signature of COAH throughout its existence. Low income residents of our state have been, and will continue to be, the most damaged by that failure.

Today we will be considering legislation sponsored by Democratic and Republican Senators which will bring much needed common sense and effectiveness into our government’s obligation to provide for affordable housing and the general welfare of our residents. We must succeed. Failure is not an option.

Those who support the status quo remind me of a line referring to President Lyndon Johnson in a Vietnam War protest song, “We’re knee deep in the big muddy and the big fool says to push on.” Let’s get out of the big muddy and then push on.

Here is a link to the full blog entry by the Senator on the NJ Voices blog at www.nj.com.