Municipalities have won yet another reprieve from having to give more than $164 million in affordable-housing funds to New Jersey.
A state appeals court panel late Monday issued a temporary injunction to stop the state from taking the money to help balance its budget.
The Appellate Division of Superior Court issued a stay of the state Council on Affordable Housing’s attempt to seize municipal affordable housing trust fund money that has gone unspent for more than four years.
Judge Jose L. Fuentes, who signed the order, set oral arguments for June 5 in Newark.
Fair Share Housing Center sought the injunction last Friday, after COAH met on May 1 for the first time in more than two years and authorized its staff to begin the process of taking the money from municipalities.
COAH was supposed to have sent the funds to the state by May 22. When the state initially sought the money last summer, it had estimated the amount at $142 million. Now, because COAH is seeking all the money unspent through March 31, Fair Share and the New Jersey State League of Municipalities estimate the amount is about $164 million.
“We welcome and appreciate the Court’s prompt action,” said Janice S. Mironov, president of the league and mayor of East Windsor. “The state’s attempted efforts to take municipal trust funds lacks any fairness or logic, coming after the lack of state regulations to guide municipal spending and COAH’s failure to meet for well over two years.”
In letters to mayors dated May 1 seeking certification of the amount of unspent housing funds and a check for that amount, COAH Acting Executive Director Sean Thompson wrote that municipalities have to ensure “that all prior expenditures have been authorized via a Spending Plan that has been approved by COAH.”
One of the complaints from municipal and affordable-housing officials is that COAH had not met for more than two years, roughly since Gov. Chris Christie tried to abolish the body through a reorganization plan, and has not been approving those spending plans.
Two weeks ago, the housing council voted a blanket resolution approving dozens of plans, but municipal officials say others are still awaiting its endorsement.
Kevin Walsh, associate director of FSHC, said municipalities have proposed using the funds to create more than 3,000 homes for low- and moderate-income residents. The funds, which are collected from developer fees and to be used to help municipalities meet their mandated housing obligations, are most often used by municipalities to support developments by organizations such as Habitat for Humanity and other community groups that help build homes for New Jersey families and people with special needs. Examples include 148 affordable apartments for Superstorm Sandy victims in Middle Township, 120 residences for people with special needs in Edison and 50 new Habitat for Humanity homes throughout Morris County.
“Blocking homes for people with special needs, Sandy victims, and hard-working families is wrong,” Walsh said. “It’s especially wrong when the administration has ignored the law in an attempt to grab as much money as possible.”
“The State is not illegally seizing money,” said Lisa Ryan, a COAH spokeswoman.
She said the council voted 4-1 to implement a 2008 law that seeks to ensure the funds are spent on housing, rather than being held in a bank account.
“New Jersey municipalities that have failed to comply with the Fair Housing Act should not be permitted to retain municipal housing trust fund dollars indefinitely while doing nothing to create housing needed by low- and moderate-income households,” she said. “Unfortunately, the temporary injunction issued yesterday enables municipalities to refuse to comply with the statute and to avoid providing affordable housing for their residents. We are confident the Court will ultimately rule that COAH’s May 1 actions were appropriate.”
Thompson’s letter told mayors to send their funds by check payable to the “New Jersey Affordable Housing Trust Fund.” But, according to the state budget, the municipal funds would be used to replace state money in the state trust fund, freeing up that money to be used to help balance the budget.
“This amounts to nothing more than a brazen raid on municipal dollars to plug holes in the State budget and a real slap at local property taxpayers,” Mironov said. ”At the end of the day, if the Administration is successful in seizing these municipal dollars, then local property taxpayers are going be on the hook to pay for State mandated costs.”
Monday’s injunction was the second time the court has stopped a state raid on the funds. Last August, the court stopped the state’s first attempt at taking the money, saying only the COAH board could do that. According to Thompson’s letter, the council’s action May 1 fulfills that court mandate.
While Democrats in the Legislature oppose the taking of the municipal funds, many are no fans of COAH.
Assemblyman Jerry Green, D-Union and chair of the Assembly Housing and Local Government Committee, said Christie needs to work with the Legislature to craft a new mechanism to ensure the creation of affordable housing in the state.
“We have both been in agreement for the last three years that COAH is not the answer,” Green said. “Here’s an agency that hasn’t met in years and everybody agrees it’s no longer in a position to make the right decisions, so let’s work together now in a bipartisan manner to come up with a policy that works best for the people of New Jersey. In the aftermath of Hurricane Sandy, these funds are more crucial than ever for our rebuilding process and the low and moderate income families desperately in need of housing.”