Assembly Takes Up Bill to ‘Blow Up’ COAH

Rick Remington | June 17, 2010
Committee chairman pledges radical overhaul of affordable housing program amid questions of constitutionality and the impact on South Jersey

The latest chapter in the overhaul of New Jersey’s affordable housing program unfolds today, as an Assembly committee takes up hearings on a bill that would eliminate the Council on Affordable Housing (COAH).

Enjoying the support of Gov. Chris Christie, the bill (S-1) sailed out of the Senate on a 28-3 vote last week — notwithstanding legal warnings on its constitutionality; unrest among South Jersey legislators; mounting opposition from dozens of advocacy groups; charges that it amounts to a “de facto Jim Crow law”; and condemnations from editorial pages. In a rare political feat, the bill has even managed to align the New Jersey Builders Association with the New Jersey Sierra Club in opposition.

On the eve of the hearings, Assemblyman Jerry Green (D-Union), chairman of the Assembly Housing and Local Government Committee, issued a statement declaring the panel’s commitment to “blowing up COAH,” while assuring “we will do this right, with input from everyone.”

Broad Support From Both Parties

S-1 has taken center stage in a bipartisan campaign to reform affordable housing, the latest battle in an ongoing political war that began in 1975 when the state Supreme Court began issuing its so-called Mt. Laurel rulings barring municipal zoning practices that exclude low- and moderate-income housing.

Sponsored by Green’s Union County Democratic colleague, Sen. Raymond Lesniak, the bill would undo the Legislature’s 1985 remedy to the Mt. Laurel rulings, the Fair Housing Act, by eliminating COAH and largely getting state government out of the business of ensuring municipal compliance with the Mt. Laurel doctrine. The bill enjoys broad support from legislators in both parties and has won a key endorsement in principle from the New Jersey State League of Municipalities.

Christie, whose attempt earlier this year to shut down COAH by executive order was stayed by the courts and later abandoned, said Senate passage of the bill “goes a long way toward fundamentally reforming the affordable housing system which New Jerseyans have long demanded and that I have promised to deliver. We will continue to work with members of both parties in the legislature to bring the COAH nightmare to an end and replace a broken system with a common sense, predictable and achievable process.”

Questions on Constitutionality

The current momentum behind the bill, however, belies a strong undertow, ranging from a legal opinion by the non-partisan Office of Legislative Services (OLS) that the proposal “may be susceptible to a constitutional challenge,” to a declaration from the state NAACP that the bill “would be a de facto Jim Crow law.”

Caught in the crossfire is Green, who is sponsoring A-2930, a companion bill that awaits introduction. Green, who failed to return numerous calls requesting a preview of today’s hearing or his bill, said in his statement issued late yesterday that the committee would not rush a bill to the Assembly floor.

“This is an issue that’s easy to demagogue, but my priority is advancing legislation that is understood by everyone, is constitutional and will truly, once and for all, fix our affordable housing laws for the benefit of everyone,” he said.

The Lesniak bill would abolish COAH, which is charged with establishing how much low- and moderate-income housing each municipality should be required to produce over successive periods of time. COAH succeeded during the 1980s and 1990s in producing two sets of quotas and certifying municipal compliance, but ran into trouble earlier in this decade when its third round of obligations was struck down by the courts, reissued and then subjected to a blizzard of further litigation (see “Council on Affordable Housing Draws Fire From All Sides,” NJ Spotlight).

Lesniak said his bill “will result in more housing with less bureaucracy.” COAH would be replaced with a uniform requirement imposing set-aside requirements for affordable housing on any new residential development built anywhere, 10 percent for developments with five or more units and 5 percent for smaller developments. The bill spells out how a municipality would be deemed “inclusionary” (meaning they provide a sufficient variety of housing to accommodate low- and moderate-income households) and therefore free of any obligation to produce any additional affordable housing.

OLS in an April 13 opinion warned that the bill could be subject to constitutional challenge because its proposed set-aside requirements fail to account for a municipality’s obligation under the Mt. Laurel doctrine to assume a share of the affordable housing need of the surrounding region, not just the need within its own borders.

“We believe that the percentage set-aside system proposed in the bill, by itself, would fail to provide for specific numeric goals necessary to assure that the regional need for low- and moderate-income housing is adequately being addressed,” OLS concluded. “…We believe that the absence of a nexus between the mandatory inclusionary zoning proposed by the bill and satisfaction of regional and Statewide and affordable housing needs would permit a challenge to the sufficiency of the bill under the Mt. Laurel doctrine.”

United in Opposition

The builders association went a step further in a June 3 letter to legislators, claiming six other provisions in the bill already have been deemed unconstitutional by the courts and contending that the bill would make it easier for non-inclusionary towns to deny zoning approval for affordable housing projects. Municipalities could exclude eligible parcels for new residential development simply by designating them “open space” or not “adjacent with compatible land uses,” the builders concluded.

Opposing the bill from the opposite end of the political spectrum, though for different reasons, is the New Jersey Sierra Club, which greeted Senate passage of the bill with a press release entitled “S1: The Scary One Passes.”
“It turns planning and zoning on its head,” said Jeff Tittel, the state director. “The bill targets rural and environmentally sensitive areas for development while letting growing, suburban towns off the hook. This bill got rid of COAH only to give all the power to the developers.”

Disproportionate Impact on South Jersey?

Sen. Donald Norcross (D-Camden,) one of nine senators who abstained on last week’s Senate vote, said his action was driven by the constitutional concerns raised by OLS as well as the bill’s apparent disproportionate impact on towns in southern New Jersey where a higher percentage of towns would be deemed “non-inclusionary” under the bill.

Noting that the bill would allow towns to count existing multi-family dwellings towards their obligation, regardless of their cost to buy or rent, Norcross said, “You have more single family homes in South Jersey simply because of land. The fact that that primarily would be the driving force, and zero to do with affordability, is outrageous.

“In some of these towns, you have apartments that rent for $3,000 to $4,000 and somehow they get counted in the calculation?”

A town-by-town analysis by the Fair Share Housing Center determined that S-1 would exempt 43 percent of municipalities in northern New Jersey, including a majority of the towns in seven counties ringing New York City, from any further affordable housing obligation, vs. just 34.7 of the municipalities in Ocean, Burlington, Atlantic, Cape May, Cumberland, Salem, Gloucester and Camden counties. The analysis showed that 10 of 14 Cumberland County municipalities, and 12 of 15 in Salem County, would have to provide additional affordable housing, vs. none in all of Hudson County. (Mt. Laurel, the Burlington County township that was the target of the original exclusionary zoning lawsuit in the 1970s, remains, 35 years later, on the “non-inclusionary” list.)

According to 2006-2008 estimates developed by the U.S. Census Bureau’s American Community Survey, Cumberland County had the lowest median income, highest percentage of families living under the poverty line and lowest median housing prices of any county in the state, and six times the state average of mobile homes. Median housing prices in Cumberland were less than half the state average and barely a third of the median price in Bergen County.

The same data shows that Hudson County is the least affordable in the state for homeowners — more than half spend 30 percent or more of their income on housing costs.

Assemblyman John Burzichelli, a Democrat whose 3rd District represents most of Cumberland County, said S-1’s potential impact on the county is of “great concern. We have a lot of faith in Jerry Green to sort this out. My goal is for fairness and to make sure that my legislative district is not affected in a way that someplace else is.”

Burzichelli’s fellow district Democrat, Assemblywoman Celeste Riley, sits on Green’s committee. While sharing Burzichelli’s concerns for the bill’s impact on their district, she declined comment in advance of the hearing.

Advocacy Groups See Loopholes

Along with the Sierra Club, other groups that have joined in opposition to S-1 include Habitat for Humanity, the NAACP, the Catholic Bishops of New Jersey, the Coalition for Affordable Housing and the Environment, the Housing and Community Development Network of New Jersey, and the Fair Share Housing Center.

The opposition groups say they have identified loopholes in the bill that would enable municipalities to escape or reduce their obligations to provide affordable housing. In particular, they have focused on a provision that would enable residential builders to pay a contribution into a fund in lieu of offering set-aside units within their developments.

S-1 provides that a municipality can “impose” a 2.5 percent development fee on the “equalized assessed value for residential development projects,” but appears to modify that later in the bill by stipulating that the fees can “only be collected” for the equalized assessed value “attributable to the low- and moderate-income housing units.” Lesniak said the provision could generate up to $75,000 in fees for every unit builders choose to swap under the arrangement; affordable housing advocates say the figure would be closer to $10,000.

In addition, the bill would allow up to half of a town’s affordable housing inventory to include units that don’t have kitchens, bathrooms or separate entrances, such as dormitory space and military housing, they point out.