TRENTON – The Assembly Housing and Local Government Committee released a bill today to assist in the transition of foreclosed properties into affordable housing.
The panel released the bill 4-1, with Republican Michael Patrick Carroll voting no.
Republican Robert Clifton, (R-12), Matawan, voted yes. He said that while he is not in favor of creating another level of bureaucracy as this bill calls for, he said that he wished he had this kind of mechanism in place when he was a mayor.
The bill, A2168, the “New Jersey Residential Foreclosure Transformation Act,” would establish the “New Jersey Foreclosure Relief Corporation,” which will be dedicated to the purpose of purchasing foreclosed residential properties from institutional lenders and dedicating them for occupancy as affordable housing.
Timing is of the essence, according to one witness, because they fear that money dedicated to housing will be diverted by the administration into the general fund this upcoming fiscal year.
Staci Berger of the Housing and Community Development Network of New Jersey said that there is approximately $225 million in municipal housing trust funds, which is supposed to be spent specifically on improving the housing market, but which they fear will be used to bolster the general fund for fiscal year 2013.
In addition, she said there will be about $75 million available for New Jersey out of the Obama administration foreclosure settlement.
“The governor’s budget wants to recapture both of those sources of funding,’’ she told the committee.
Chair Jerry Green, (D-22), Plainfield, said he wants to make sure that by the time June rolls around, they have addressed this issue to ensure the money is spent the way it is intended.
The bill had large support, including the N.J. League of Municipalities, N.J. Builders Association, N.J. Mortgage Brokers Association, N.J. Sierra Club, and N.J. Association of Realtors, among others.
However, Rob Eichmann of the N.J. Conservative Republican Leadership Committee, called the bill “nothing more than a wealth distribution scheme.’’
In a state whose property taxes are the nation’s highest, this bill would add insult to injury, he said, by taking taxes paid by one homeowner to subsidize another.
“This will help to depress the value of adjacent homes in every neighborhood,’’ he said.
But according to some estimates, 100,000 foreclosed homes may hit the market this year, according to Berger, and she and other witnesses said this bill will help turn around vacant lots and actually assist in the process of rescuing neighborhoods.