More Money for ‘Energized’ Agenda on Housing, Community Programs

Colleen O'Dea | May 3, 2019 | Housing
Lt. Gov. Sheila Oliver promises big year for Department of Community Affairs after a decade of ‘atrophy’

Lt. Gov. Sheila Oliver
After years of being drained of resources, the New Jersey Department of Community Affairs is envisioning a busy year, thanks to a proposed 4.5-percent increase in the department’s budget. That will include working on several new programs.

“Over the past decade, the department’s resources were depleted, leaving a respected institution sapped of the human and financial capital necessary to conceive and adequately fund the very activities for which the department was previously venerated,” Lt. Gov. Sheila Oliver, who also serves as DCA commissioner, told the Senate Budget and Appropriations Committee on Thursday. “Staff was challenged … when virtually every unit in the department had been allowed to atrophy.”

The extra funding is provided in Gov. Phil Murphy’s proposed fiscal year 2020 budget. His plan also provides additional funding to build low-cost housing. In addition, the department is reviving popular sources of modest funding for communities that had lapsed during the past administration. The department would also get 25 new staffers, an increase of almost 3 percent over the 2018 fiscal year.

Oliver said DCA will be assisting municipalities to save money by sharing services, improving their main streets and neighborhoods, and building affordable home developments.

She went on to describe what she called an “aggressive agenda” of assistance to municipalities and the allocation of $59 million to the state’s Affordable Housing Trust Fund. In response to a question from the nonpartisan Office of Legislative Services, the department estimates it will be able to fund, through the trust money and state Housing and Mortgage Finance Agency dollars, the construction of between 6,700 and 7,000 affordable homes and apartments to make a dent in the state’s critical need for housing. (One Superior Court judge put the need for low-cost homes in one of the most expensive states in the nation at 155,000 through 2025).

Full funding for Affordable Housing Trust Fund

Murphy’s budget proposal marks the first time in more than a decade that a governor is proposing to fully fund the housing trust fund, which by statute is supposed to get most of the money raised by realty transfer fees.

Oliver said that last year she was “pained” to have to tell the budget committee that the state could not afford to deposit all the money into the trust fund. She called the $59 million Murphy is proposing for affordable housing construction next year a “significant commitment.” DCA’s answer to OLS indicates the state expects to fund between 250 and 500 housing units in FY2020 with that money, depending on the funding structure for individual development projects.

Oliver also touted as important the new Office of Homelessness Prevention, which Murphy signed into law earlier this week. The governor gave the office $3 million to establish a comprehensive approach to dealing with the problem of homelessness.

The department is moving cautiously in developing plans for spending the money for both programs, meeting with advocates and experts to determine how to get the greatest benefit.

“Determining where and how to use the funds available to produce new and rehabilitated homes and selecting the most effective strategies to prevent homelessness and help those for whom homelessness has not been averted will be the most important work we do this year,” Oliver said. “Because there is so much riding on getting the underlying policies that will drive program and funding right, we must be very intentional about moving forward.”

In response to a question from one committee member, Oliver said she expects the state to put a greater emphasis on rental properties in disbursing funds for affordable homes because both millennials and older empty nesters prefer living in rental properties in walkable communities.

Oliver also heralded some of the department’s smaller new initiatives.

Other initiatives

The Division of Local Government Services, which works with municipal officials and keeps track of their budgets and finances, “is building staff capacity to restore its technical assistance programs for shared services and consolidations,” Oliver said. The division has created a new Local Assistance Bureau, which is working on 14 potential shared-services agreements and has another 30 waiting for assistance. Sharing such services as courts, public works and public safety are ways local officials are hoping to reduce costs and cut property taxes or at least blunt the amount by which they increase each year. A year ago, Murphy named two “shared services czars”, one Democrat and one Republican, to promote ways municipalities can operate more efficiently by sharing services.

Similarly, Murphy’s budget alludes to a new initiative, which is still somewhat shrouded in secrecy, to establish pilot projects to have counties assume some services now done by municipalities. The OLS document states Murphy wants to spend as much as $15 million on a voluntary county demonstration project. DCA has suggested 911 dispatching, public-health services and road maintenance could be done on a countywide basis more efficiently. The department told OLS that a full report on its recommendations and a proposed pilot project are in the works.

Oliver said the department has revitalized two small programs that help municipalities improve their streets and neighborhoods without having to spend property-tax dollars.

The $2.5 million Neighborhood Preservation Program gives towns money and technical assistance to improve threatened but viable neighborhoods; several dozen municipalities have neighborhoods that are eligible for help. Oliver said the program was last funded in 2008 and she expects to be able to fund as many as 19 projects next year.

Additionally, the Main Street New Jersey program has been resurrected. Through this modest program — it has just $500,000 available — the state will give small grants to municipalities to enhance businesses and storefronts in business or shopping districts.

The budget hearing was cordial, but Sen. Sam Thompson (R-Middlesex) questioned why the department has spent almost none of the money it has been allocated in both the neighborhood and Main Street programs in the current fiscal year, which ends June 30.

“It’s a cumbersome process,” Oliver said. “We are still transitioning from years of passive administration of our statutory obligations to an agenda that is refreshed and energized.”

DCA has spent a lot of time promulgating new rules for the Main Street program and plans to propose them in the New Jersey Register next month. That will make some communities that were part of the program in the past eligible for funds immediately. Oliver promised that the money will be spent before the end of the 2019 fiscal year.