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.