League of Municipalities: Lay off affordable housing funds

New Jersey League of Municipalities President Janice Mironov called on the state to stop trying to take away affordable housing trust funds from the municipalities.

The Christie Administration has been trying to take control of some $160 million from municipalities who have not used the funds for several years, with one administration official saying they have been “sitting” on them.

But affordable housing advocates have said they were given little direction, given that the Council on Affordable Housing had been inert for many years.

Mironov, who also serves as mayor of East Windsor, wrote the following piece:

“Even before the “Mount Laurel” decisions by the State Supreme Court and the Fair Housing Act in 1985, affordable housing had been a controversial, “third rail” issue. This doctrine remains controversial today but there are some areas of agreement. Whether you concur with this State mandate or not, few would disagree there is a societal need to address housing affordability in our communities and that regardless of how this is addressed, the burden should not fall on local property taxpayers.

“That is what makes the state’s recent efforts to seize local affordable housing trust funds so concerning and why our property taxpayers should demand that the dollars remain local and object, loudly, to the efforts to seize this funding.

“On May 1, the New Jersey Council on Affordable Housing (COAH) met for the first time in over two years to begin State efforts to seize an estimated $160 million of municipal affordable housing trust funds. Then, on Monday, May 13 the Appellate Division issued an injunction, welcomed by local governments and housing advocates, which stayed the State’s efforts, and scheduled a court date on June 5 to consider the matter.

“This round of litigation results from a provision in a 2008 law requiring that municipalities expend or ‘commit to expend’ trust fund dollars four years from the date of collection. The conflict arose when COAH, choosing to ignore the requirements of that law, failed to adopt regulations and to define ‘commit to expend.’ There is no question that the State agency had this responsibility, as it publicly acknowledged in 2008 and as recently as 2012.

“The result has left hundreds of municipalities in a catch-22, at risk of being penalized for failing to comply with regulations that were never adopted. Municipalities were without the statutorily mandated guidance, without a definition of ‘committed to expend,’ and without a viable plan in place detailing what obligations the State would impose on municipalities and no approved means of compliance.

“It was not only the lack of guidance from COAH that led to the current situation. The historic downturn in the real estate markets, to which the construction of affordable housing is linked, stalled many worthwhile projects. This has been recognized and addressed by the Legislature as demonstrated by the Permit Extension Act of 2008, which has been further extended twice, as well as the suspension of the 2.5 percent fee on commercial. Indeed, relief has been provided to developers on multiple occasions but when a bill was approved by the Legislature in June 2012 to give municipalities similar relief, that is two additional years to commit their trust fund dollars, the governor regretfully vetoed the bill.

“This ongoing conflict is not an inside Trenton battle between special interests. It is, instead, a significant public policy issue that taxpayers should care about. The affordable housing trust funds are collected by municipalities from developer fees to subsidize the provision of affordable housing. They are meant to assist municipalities in meeting their state mandated housing obligations and to provide a revenue source that is not dependent on the property tax. If the state is successful in taking this funding, it does not remove the state imposed obligations to provide affordable housing. The loss of this funding will mean that municipalities may have no choice but to rely upon the property tax to subsidize affordable housing programs.

“Taxpayers should also care that these dollars be spent as intended by the Legislature. Municipal affordable housing trusts are precisely that, trust funds dedicated to the provision of affordable housing and assisting municipalities to meet their State imposed obligations. If the State is successful in seizing these trust funds, it would not be under the same obligation to use the funding for housing. Since this funding is anticipated as general revenue in the current budget, the state could instead use this funding to offset any budget shortfalls or spend on completely unrelated programs.

“It is our hope that this injunction allows for reconsideration of misguided state actions. Municipalities were promised relief from the COAH bureaucracy and its staggering obligations that had no connection to on-the-ground reality. Instead we now have a State agency that meets for the first time in over two years only so it can implement a plan to seize local trust funds, push that financial obligation onto property taxpayers and to place further mandates on local governments.

“It is time to stop the state efforts to seize this funding and, instead, partner with local leaders to develop and implement a statewide affordable housing policy that is rational, achievable and does not perpetuate a financial obligation to our taxpayers.”

League of Municipalities: Lay off affordable housing funds