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COAH Resolves to Take Unspent Affordable-Housing Funds from Municipalities

Colleen O'Dea | May 2, 2013

Money to go to balancing the general state budget rather than building houses for low- and middle-income residents.

Defying several attempts at killing it off, the New Jersey Council on Affordable Housing met for the first time in more than two years on Wednesday to begin the process of taking at least $142 million in funds dedicated to low- and moderate-income housing to help balance the state budget.

COAH, which has few friends in the Legislature, was reorganized out of existence in 2011 by Gov. Chris Christie.

The council voted 4-1 to ask municipalities to send proof of their plans to spend any money that had been dormant in their affordable housing trust funds for four years as of July 17, 2012 and transfer the remaining, unspent money to the council by May 22, according to the resolution.

The resolution also gave its acting director approval to inform municipalities how much of their unspent funds had been collected between July 18, 2008 and March 31, 2009 and to ask them to either prove they have concrete plans to spend the money or turn it over to the council.

Lisa Ryan, a COAH spokeswoman, said the state will not know exactly how much money has not been spent and is due to the state until the staff begins to get information from municipalities. Last July, the Department of Community Affairs estimated that amount at $142 million. The Cherry Hill-based Fair Share Housing Center, which was successful in stopping the DCA from seizing the funds last summer, estimates the amount today at more than $150 million.

“Today’s money grab shows where the governor’s real priorities are,” said Kevin Walsh, Fair Share’s associate director.

According to Walsh, those funds could build or renovate over 3,000 homes, which are particularly needed in Shore areas post-Sandy, including 148 new homes for lower-income people in Middle Township and rehabilitating public housing in Ocean City.

About $80 million of the money is from towns in the nine counties hardest hit by Sandy, said Staci Berger, executive director of the Housing and Community Development Network of New Jersey.

"The governor promised after that storm that he would help the families and businesses that were harmed,” Berger said. “He fought hard for Congress to approve funding to help our state recover and rebuild, and we all supported those efforts. It is wrong and absolutely mind-boggling that he would then turn around and take money away from those very communities.”

About 50 municipal leaders, housing advocates, environmentalists, and others attended the meeting, and many spoke out against the resolution.

“These towns want to act,” said Mike Cerra, senior legislative analyst with the New Jersey State League of Municipalities. “They are being held back because their spending plans have not been approved . . . We have repeatedly asked for guidance but not gotten any answer.”

The council gave its blanket endorsement to about 90 spending plans, amendments and other issues during the Wednesday meeting, but Cerra said there are others that still need approval that were not on the agenda. A municipality needs COAH’s approval before it can spend money from its trust fund, which comes from development fees.

“How can they take this money when they have not been approving plans?” asked Jeff Tittel, head of the New Jersey Sierra Club.

Tittel noted how unusual it is to have environmentalists, housing advocates, and municipal officials on the same side of any issue. He said not only will the taking of the funds delay the creation of more affordable housing but also it will lead to greater sprawl and cost local taxpayers more.

Under the state Supreme Court’s Mount Laurel decisions, municipalities must provide a fair share of housing for low- and moderate-income residents. Towns can use their affordable-housing trust funds to meet that requirement as they see fit, as long as COAH agrees.

Those that don’t can be sued by developers seeking to use the so-called builder’s remedy, meaning they can put up four market-rate houses for each affordable unit.

“It shows you just how dastardly this is,” he said.

Tim Doherty, the only COAH member to vote against the resolution, said he did so because while a 2008 law gives the state the right to take any funds not spent or committed to be spent after four years, COAH has not given adequate directions to the municipalities.

“COAH was to define what ‘committing the funds’ meant, which could be done any number of ways. However COAH never did establish those requirements, so some towns didn't know on what to spend the money, if those projects would conform to COAH requirements,” said Doherty, executive director of Project Freedom Inc., which provides housing and services for the disabled at four locations in New Jersey.

“Also, since about mid-2011, under the reorganization by Gov. Christie, COAH hasn't met to do any business, and so towns didn't know what they should be doing as to their affordable housing requirements,” he added.

Doherty noted that the law allows the state to take unspent funds and use them for affordable housing. The Christie administration plans to meet that mandate by transfering the municipal monies into the state’s housing fund to replace other state dollars, which it would then use to help balance the current budget.

“This is the first step by the Christie administration to steal those monies to balance the budget,” said Tittel. “These monies are supposed to be used by municipalities to help meet affordable housing obligations to build houses for seniors, handicapped, or people of modest means. Instead the governor wants to use this money for tax cuts for the wealthy and to close the budget gap.”

The Department of Community Affairs had originally alerted municipal officials of its intent to take the money last June, but the Appellate Division of Superior Court last August stopped the process, saying only COAH had the right to do so. The council hadn’t authorized taking the funds because Christie had abolished the council as part of a reorganization plan a year earlier in August 2011.

Just about every aspect of the state’s affordable housing regulations -- the trust funds, Christie’s disbanding of COAH, and the council’s housing quotas -- are before the state appellate or Supreme Court.

Cerra said it is likely that the question of the municipal funds will be back before the appellate division, and individual municipalities that feel cheated by COAH’s action are likely to go to court to appeal the taking of their funds, as well.

“Anyone who thinks this is the finale of this issue is mistaken,” he said. “It is to be continued.”

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