The article is posted here in its entirety.

NEW JERSEY AFTER COAH

By Lori Grifa, Commissioner, N.J. Department of Community Affairs

On June 29, 2011, Governor Christie issued Reorganization Plan No. 001-2011 which, among other things, abolished the Council on Affordable Housing (COAH).  The Reorganization Plan also was designed to reduce the “unnecessary complexity of affordable housing administration in New Jersey, lower the administrative cost associated with the current regulatory process and streamline the development of new housing projects.”  Recognizing that the N.J. Department of Community Affairs (DCA) was already responsible for providing assistance to municipalities, and operating numerous affordable housing programs, the Plan also acknowledged that the performance of these obligations can be significantly improved and streamlined by consolidating the statutory functions, powers and duties previously conferred upon COAH with those of DCA. 

The Plan became effective on August 29, 2011, in accordance with the provisions of the Executive Reorganization Act of 1969, P.L. 1969, c. 203 (C. 52:14C-1 et seq.).  As a result, the Governor’s Reorganization Plan transferred all functions, powers and duties assigned to COAH in the Fair Housing Act to the Office of the Commissioner of the DCA. 

Upon the effective date, the DCA immediately began to reduce the unnecessary bureaucracy that was COAH’s hallmark by implementing interim procedures designed to create predictability and consistency for municipalities, developers and housing advocates.  These interim procedures, as set forth below, will curb inefficiencies which resulted in unreasonable delays and costs to municipalities and the private sector while promoting the availability of affordable housing throughout the State.  In keeping with the Reorganization Plan, DCA will provide local planning and housing support services to assist municipalities with local planning issues and in the administration and implementation of the Fair Housing Act.  As the DCA continues to take action to increase flexibility and efficiency to foster compliance with the Fair Housing Act, it will move towards greater transparency by posting notices of these actions on the DCA webpage at www.nj.gov/dca/services/lps.

So far, the DCA has implemented interim streamlined protocols regarding the following: review of requests for agency action, waivers and motion requests (including public noticing procedures); review and approval of municipal spending plans; review and approval of municipal development fee ordinances; approval of administrative agents and municipal housing liaisons; and approval of affordable housing operating manuals.

Waiver Requests

Municipalities may submit any requests for waivers of regulations in order to expedite the production of housing affordable to low- and moderate-income households.  The new waiver process will permit waiver requests as well as requests for determinations on issues other than a waiver of regulations (motions) to be made electronically, by letter.  Noticing requirements are streamlined via postings on DCA and municipal websites.  Comments on the request will be accepted for two weeks (ten business days) of the posting.  The request and any comments received will then be reviewed and the parties notified of any relief granted.

Review and Approval of Development Fee Ordinances and Amendments

To expedite the review and approval of development fee ordinances and amendments, municipal resolutions requesting review and approval of development fee ordinances or amendments will no longer be required.  To streamline the process, a model development fee ordinance is available on the DCA website.  Ordinances submitted to DCA will be reviewed and the municipality will be notified whether the development fee ordinance or amendment has been approved.

Administrative Agents and Municipal Housing Liaisons

Municipalities will now be permitted to designate or appoint Administrative Agents (AA), Municipal Housing Liaisons (MHL) and RCA Administrators without State approval.  Municipalities need only notify DCA of any new appointments or designations.  DCA will continue to provide ongoing support, education and training to designated appointees. 

Affordable Housing Operating Manuals

Municipalities will no longer be required to receive approval of affordable housing operating manuals.  Revisable model operating manuals are available for download on the DCA webpage at www.nj.gov/dca/services/lps and need only be submitted to DCA.  The Department will assist in the creation of operating manuals if requested. 

Spending Plans and Amendments

A municipal resolution requesting review and approval of Spending Plans or Spending Plan amendments will no longer be required.  Municipalities may now simply submit a letter (in hard copy or in an electronic format) making such a request.  The submitted plan will be reviewed expeditiously and the municipality will be notified whether the spending plan or amendment has been approved.  A spending plan model is posted on the agency website to assist municipalities in drafting their spending plans.

Going Forward

The DCA will also offer planning services in order to foster cost-effective strategies and solutions for the land use and administrative goals of local governments.  As part of a comprehensive strategy, this planning assistance will include incorporating the goals of the Fair Housing Act into the pursuit of economic development and strategic planning initiatives while focusing on flexibility and efficiency. 

The local planning services to be offered by DCA will include both general planning and housing support.  The general planning services are available to communities to develop cost-effective strategies and solutions for the successful achievement of local land use and strategic planning goals.  The Department will make multi-disciplinary, professional staff available at no cost to local government entities. Housing support services to be offered will assist municipalities with implementing the Municipal Land Use Law, Fair Housing Act and applicable laws.

This new beginning will present new challenges and opportunities.  As State and local governments move forward, municipalities that previously submitted Housing Elements and housing plans for substantive certification should continue to comply with the requirements of the Fair Housing Act and applicable laws in order to continue to be protected from builder’s remedy litigation.

For a link to the article at the League website, click here.

Senator Lesniak has not provided any specifics on the new legislation, but, according to a press release from the Senate Democrats, Senator Lesniak stated that the new bill “will inject rationality into New Jersey’s affordable housing laws.”

“It’s not just about compromise for the sake of compromise,” said Senator Lesniak, D-Union. “It’s about forging a compromise that creates good public policy. That’s what the people of the State of New Jersey want us to do, so we should just do it.”

Senator Lesniak explained that all three versions of affordable housing reform have positive and negative aspects. With the new legislation introduced he hopes to find common ground between all parties interested in rational affordable housing reform in New Jersey.

“Rather than continue to beat our heads against a wall and beat our chests proclaiming our way is the only way, this new bill will meet everyone’s goals except those who want to keep COAH in place,” said Senator Lesniak. “It’s become apparent that COAH has failed, but there are still some who will try to sabotage any attempt to change its convoluted, top-down, micromanagement of housing policy that has produced insufficient affordable housing and stifled job creation and economic growth. It’s time to move beyond the policy relics of the past, and focus on creating affordable housing, jobs and economic opportunities for New Jersey’s future.”

The bill will likely be referred to the Senate Economic Growth Committee for consideration, which Senator Lesniak chairs.

Thanks to Conor Fennessy, VP for Government Affairs at the New Jersey Apartment Association, for pointing out this release.

For a link to the press release, click here.

For a link to the version of S-1 that passed both houses of the Legislature, click here.

For a link to Governor Christie’s conditional veto, click here.

It is time for the Assembly to finish the job of eliminating the Council on Affordable Housing, reforming New Jersey’s outdated and ineffective affordable housing rules and permanently repealing the 2.5 percent commercial development fee.  The Senate overwhelmingly passed bipartisan legislation that accomplishes these goals. We urge the Assembly to pass legislation that meets these same objectives, lifting arbitrary mandates on municipalities, rehabilitating substandard housing and eliminating the Council on Affordable Housing.  Any legislation that falls short of these goals falls short entirely.

I think it’s fair to say it sounds like its “all or nothing” on affordable housing reform for now.

Stay tuned….

Furthermore, given Governor Christie’s strong stance on eliminating the Council on Affordable Housing and instituting a major overhaul of affordable housing policy in New Jersey, even if the moratorium got to his desk, there is no guarantee he would sign it as a further delay in the development fee would only take the pressure off the Assembly to move on comprehensive affordable housing reform now.

We will be monitoring this issue throughout the week and for as long as the Legislature stays in session this summer as affordable housing reform is a critical issue to our readers, be they developers, municipal officials, affordable housing activists or professionals who practice in this field.

In anticipation of the delay of comprehensive affordable housing reform by the Assembly, A-3055, a bill to extend the current legislative moratorium on the 2.5% non-residential development fee to October 30, 2010, was introduced in the Assembly on June 24.  A companion Senate bill is expected to be introduced and both bills will be fast-tracked.  The moratorium will continue the exemption for commercial development from payment of an affordable housing development fee equal to 2.5% of the equalized assessed value of the proposed development, provided that the developer has secured preliminary site plan approval by the October 30, 2010 deadline.

creates a standards-based, municipally controlled system with minimal involvement from the State.  New Jersey is facing dramatically different economic, demographic and social circumstances since the original Fair Housing Act was passed 25 years ago, which is why the current affordable housing system must be retired and replaced.  Under the new system, the Council on Affordable Housing (COAH) and State-imposed housing obligations will be abolished and fair, affirmative, locally directed obligations to build low and moderate-income housing will be created.   

As a result of the proposed changes, the rehabilitation of existing housing stock with be encouraged, a process largely neglected in the current system, and the affordable housing system will be moved away from state-controlled mandates and towards a locally-based system that focuses on future development.  The Governor’s proposal calls for a 10 percent affordable housing unit requirement in development projects greater than 10 units (i.e. 2 affordable units for a 20 unit development), and requires a payment to a municipal affordable housing trust fund for projects between 2 and 10 units.  The Governor recommends provisions to give priority housing trust funding for projects that provide special needs housing. 

“These new measures will help to fix a broken system by promoting sensible, predictable and achievable planning to implement change,” said Governor Christie.  “Affordable housing is a responsibility that must be naturally considered as part of normal development and local decision making.  With strictly limited State involvement in the process, we are finally allowing for flexibility and customization that acknowledges our state’s unique economic, community and housing needs.”

In February, Governor Christie created a five-member Housing Opportunity Task Force chaired by former Senator Marcia Karrow to examine the State’s existing approach to affordable housing and present recommendations to fulfill New Jersey’s constitutional obligations in a manner consistent with sound planning and economic growth.  In addition, the Legislature is actively considering reforms to affordable housing through legislation sponsored in the Senate by Senators Raymond Lesniak (D-20), Christopher “Kip” Bateman (R-16) and Jeff Van Drew (D-1) and in the Assembly by Assemblymen Vincent Prieto (D-32) and David Rible (R-11).

“I look forward to working with members of the legislature to adopt a reform plan that empowers municipalities with the flexibility to meet their affordable housing obligations based on the unique situations, circumstances and needs of their respective communities,” added Governor Christie.

Under Governor Christie’s plan, municipalities will have an increased role in determining their affordable housing needs. 

• Municipalities will be required to conduct an inventory of existing affordable housing to determine what housing must be rehabilitated.
• The municipality must then formulate a plan to accomplish the rehabilitation.

New affordable housing construction will be tied to future housing development. 

• Depending on the size of the residential development, affordable housing must be provided either on-site, off-site, or through a payment to the municipality’s affordable housing trust fund in lieu of actual construction.
• Municipalities would be able to use funds in their affordable housing trust funds to support housing rehabilitation within their own municipality or in other municipalities which have significant rehabilitation needs but limited resources.
• Special needs housing will be given priority for both development and funding. 

Also under the proposed plan, the current 2.5% commercial development fee would be repealed, which will help encourage economic growth. 

With regard to zoning, municipalities seeking to comply must demonstrate that undeveloped residentially-zoned land and redevelopment will accommodate the affordable housing requirement.  A municipality seeking protection from legal challenges and court-imposed remedies must develop and adopt a housing element as part of their municipal master plan.

 State involvement in the new process will be substantially reduced. 

• State affordable housing quotas will be abolished
• The Department of Community Affairs’ (DCA) will file municipally approved housing plans and make them publicly available.
• If challenged, the Department of Community Affairs will conduct a review of municipal plans, which is limited to a determination that the plan is factually accurate and consistent with the law.
• The DCA will continue to administer the State Affordable Housing Trust Fund.

Six months after the enactment of proposed legislation, the Fair Housing Act will be repealed and COAH will be abolished. Affordable housing plan certifications granted by COAH will remain in effect and are afforded the continued legal protections until the certifications expire. Municipalities with pending certification requests are permitted to pursue those certifications or may withdraw and develop new plans consistent with the new proposed law.

“Governor Christie and I recognize the affordable housing needs that many people in the state have,” said DCA Acting Commissioner Lori Grifa.  “Unfortunately, the Council on Affordable Housing has often times been more burden than benefit to the point that New Jersey as a whole has fallen far short of its affordable housing goals,” “The Governor’s new affordable housing plan is a fresh approach that gives more control and flexibility to local governments while limiting state involvement. Ultimately, this plan will result in more affordable housing units being built in communities across the state.”

The New Jersey League of Municipalities has also commented on the Administration’s proposal: http://www.njslom.org/letters/ml051310-affordable-housing.html

The Fair Share Housing Center has denounced the Administration’s proposal as more “red tape”: http://fairsharehousing.org/pdf/FSHC_press_release_-_5_13_2010_-_red_tape.pdf

It can also be accessed on the Governor’s website here.

The full text of the Governor’s statement on the status of the Housing Opportunity Task Force created by Executive Order 12 is below:

My administration has received the report of the Housing Opportunity Task Force and will begin immediately reviewing its findings and recommendations.  I want to thank the Chairwoman of the task force, former Senator Marcia Karrow, and the other members for their hard work and service.  It is time for us to chart a new course and implement a sensible planning system that considers economic growth and development along with our affordable housing needs.  I look forward to working with Senators Lesniak and Bateman and Assemblymen Green and Rible in these reform efforts. 

The Task Force was created by Executive Order 12 and was charged with undertaking a review of the affordable housing mission in New Jersey, and examining the regulations and methodologies of COAH, the Fair Housing Act (FHA) and the State Planning Act in meeting the constitutional obligations of the Mt. Laurel court decisions in a manner that is consistent with sound planning and economic growth for the state.  Since the Task Force has now completed its work, the Governor today signed Executive Order 20 rescinding Executive Order 12.

The Task Force was chaired by Senator Karrow and included four other members:  Rutgers University Professor James Hughes, Perth Amboy Mayor Wilda Diaz, Morris Plains Mayor Frank Druetzler, and former Executive Director of the Housing and Mortgage Finance Agency Ira Oskowsky.

Paragraph 5 reads as follows:

For the next 90 days, COAH shall refrain from taking any further action to process applications for substantive certification or to take any other actions to implement the Third Round regulations. The provisions of this Paragraph shall not apply to any action if the applicant, for good cause shown, requests action on a particular item and the Acting Commissioner determines that such action is required within the 90 day period to prevent the loss of affordable housing opportunities.

The Appellate Division has fast-tracked this appeal.  The FSHC’s brief is due on February 26 and the State’s brief is due on March 4.  Any reply brief must be filed no later than March 10.  Oral argument is scheduled for 12:15pm on March 16.

Update: For a link to the Star Ledger’s coverage, click here.  For a link to the Fair Share Housing Center’s commentary on the Appellate Division’s order, click here.