Council on Affordable Housing Draws Fire From All Sides

Rick Remington | May 17, 2010
Is COAH the latest casualty in a political war between housing and home rule that has dragged on for 35 years, starting with the state Supreme Court's first ruling against exclusionary housing?

COAH is charged with developing affordable housing, like these units in Old Tappan, for New Jersey's 566 municipalities.
To paraphrase a famous political saw, the Council on Affordable Housing (COAH) may soon be out shopping for a dog—that may be the only way it could find a friend these days in Trenton.

Under assault by Gov. Chris Christie, legislators from both parties, mayors, housing advocates, builders and environmentalists, the agency assigned the task of facilitating the production of affordable housing in the state’s 566 municipalities has been portrayed as New Jersey’s poster child for failed government.

Governor Chris Christie fired the latest salvo yesterday, urging the legislature to act on bills that would abolish COAH and turn over the job to municipalities “with strictly limited State involvement in the process.…”

COAH may become just the latest casualty in a New Jersey political war between housing and home rule that began 35 years ago when the state Supreme Court issued its first Mt. Laurel ruling barring exclusionary zoning—a political tussle that endures with no end in sight.

“It’s not dissimilar to Roe [v Wade] in that the court stepped in and decided the abortion issue without a political consensus, and the country has been divided on that issue ever since, with apparently no capacity to find a middle ground,” said Patrick O’Keefe, a former chief executive officer of the New Jersey Builders Association.

“To some extent we have a similar polarization and freezing of positions in New Jersey. From the time the Mt. Laurel doctrine [was] first enunciated, that made it a political issue and it didn’t provide the political tools to resolve it.”

Exclusionary Zoning

The seeds were sown in 1975 when the state Supreme Court began issuing a series of landmark decisions barring municipalities from blocking the construction of housing affordable to lower middle class families through exclusionary zoning. In Southern Burlington County NAACP v. Township of Mt. Laurel, the court found that developing municipalities had an obligation under the state constitution to provide realistic opportunities for affordable housing development.

In 1983, the court went a step further, finding all municipalities shared in the constitutional obligation. Giving the decision heft was the “builders remedy,” in which developers who successfully sued a municipality over exclusionary zoning practices could build four market rate homes for every one affordable unit.

The decision touched off a political storm over sprawl development, home rule prerogatives and judicial fiat that then Gov. Thomas Kean and the legislature sought to quell through the 1985 Fair Housing Act. The centerpiece of the act was COAH, an administrative agency that would periodically establish “fair share” affordable housing quotas for each municipality. It would also certify their efforts to provide the housing through zoning, agreements reached with private and nonprofit developers and the rehabilitation of existing rundown housing units.

The state Supreme Court gave COAH its blessing in its third Mt. Laurel decision, and the agency was able to keep its head above the political waters for the next 15 years. It issued two sets of municipal quotas and facilitated the construction and rehabilitation of thousands of affordable homes. (According to the agency’s website, 59,338 new units have been built and 13,536 substandard units rehabilitated.) Both builders and affordable housing advocates agree that New Jersey during the 1980s and 1990s was among the nation’s leaders in producing affordable housing. Then the roof caved in.

Challenged in the Courts

COAH’s third set of affordable housing quotas, originally due in 1999, were issued five years late, due to the use of new methodologies to calculate each town’s need and a desire to await slow-arriving 2000 U.S. Census data. The quotas were rejected by the courts, reissued in 2008, and once again challenged in the courts. Nearly two dozen appeals filed by municipalities, residential builders, commercial builders and housing advocates remain in litigation.

By the time Chris Christie was sworn in as Governor in January, the ongoing litigation and municipal frustration with ever-changing regulations had essentially paralyzed the council’s work. Meanwhile, the severe economic recession had collapsed new housing activity to a third of 2005 levels, demand for affordable housing continued unabated, and builders said the incentives they need to meet that demand had disappeared.

Three weeks after being sworn into office, Christie issued an Executive Order that would have shut down COAH for 90 days while a newly formed Housing Opportunity Task Force could identify a more efficient, permanent way to produce affordable units. Concurrently, Sen. Raymond Lesniak (D-Union), expressing similar frustration with COAH’s performance, moved legislation that would replace the agency with a process he claimed would both simplify and multiply the production of affordable housing.

History soon repeated itself.

Christie’s Executive Order was promptly stayed on appeal by the courts, then abruptly retracted by the Governor on March 20 upon receipt of the Task Force final report, assembled in just five weeks and laden with typos. Two days later, the Senate bill stalled in the face of opposition when called for a floor vote and was amended for later consideration.

All sides agree that the tide continues to move against COAH in its current form, a point underscored by the Governor’s press conference yesterday and by the renewed calls from proponents of reform rallying the legislature to take action. But the forecast continues to call for turbulence and the prospect of further litigation; the Fair Share Housing Center greeted yesterday’s announcement by comparing Christie’s plan to one promulgated by former Gov. James McGreevey that was struck down by the courts in 2007.

Much of the Governor’s plan incorporated recommendations issued by his task force, which was chaired by former Sen. Marcia Karrow (R-Hunterdon.) In its final report, the task force pronounced COAH “irrevocably broken” and dismissed current affordable housing doctrine as “the product of a different time.” The “greatest mistake” in the creation of COAH was the Legislature’s abdication in 1985 of policy-making authority to a regulatory body, the task force concluded.

Trailers and Dorms

The task force recommended that the state’s current affordable housing need be addressed exclusively through rehabilitation of existing deficient housing units. Future need would be addressed by setting aside 10 percent of all new units for affordable housing—down from the traditional 20 percent. In one of its more controversial recommendations, the task force urged flexibility in the counting of new units, suggesting that trailers, modular housing and dormitory space in group homes be eligible.

“If Enron, Lehman and Bear Sterns have taught us anything, it’s that accounting gimmicks are a poor substitute for sound management,” said O’Keefe. “If we, for example, give credit for dorm space, how have we addressed the net need for housing?”

Lesniak said he did not see his bill (S-1) as the legislative vehicle for implementing the task force recommendations. “My initial reaction is that [the task force report] doesn’t produce enough affordable housing,” he said. “My proposal is going to eclipse any affordable housing built by COAH over the last 35 years and it’s going to do it in a more efficient manner.”

Lesniak’s bill is supported in principle by the New Jersey State League of Municipalities, whose expressions of frustrations with COAH, relayed through executive director, Bill Dressel, were prominently quoted in the task force report.

Gutting Affordable Housing

Housing advocates, however, claim the bill would gut affordable housing and effectively exempt half the state’s municipalities from any obligation, citing a provision that any town defined as “inclusionary” in the bill “shall be deemed to have provided for its portion of the region’s opportunity for low and moderate-income housing.” To qualify, one-third of a town’s housing stock must consist of multiple dwellings (such as apartment buildings), single-family attached housing or mobile homes.

However, Lesniak said his bill would require any new development anywhere with five or more units to set aside 20 percent as affordable and “those municipalities that currently don’t have a reasonable mix of affordable housing in their community” would have to zone at least 20 percent of their vacant developable land for market rate and affordable housing.

An analysis of the bill by the Fair Share Housing Center, according to staff attorney Adam Gordon, found the Lesniak proposal would produce only 15,000 homes over the next 10 years. Abiding by COAH’s latest revised quota, he said, would generate 40,000 units through new construction and another 17,000 through rehabilitation.

“We think that the most important thing to do is to make sure that there is a real obligation for municipalities that are close to jobs and transit to actually build homes,” he said. “We are less concerned whether it’s a particular agency, whether it’s COAH or the HMFA (Housing and Mortgage Finance Agency) that does it.”

The key missing element in the Mt. Laurel struggles of the past 35 years has been any credible effort by the courts or the Legislature to force the various parties to come together and arrive at a consensus, O’Keefe said.

“That’s exactly what I’m trying to do is build a consensus around the issue,” said Lesniak. He then launched into an attack on opponents of his bill as intransigent.