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Meeting
a Town's Affordable Housing Obligation While Protecting Natural
Resources
Background
In
New Jersey, municipalities have a constitutional obligation to
provide for "suitable and affordable" housing for citizens
of low and moderate income. Two NJ Supreme Court decisions, known
as Mount Laurel I and II (1975 and 1983), confirmed this obligation.
The Supreme Court and the Legislature (in the NJ
Fair Housing Act of 1985, N.J.S.A. 52:27D-301 et seq.) made
it clear that D-municipalities must facilitate a range of housing
within their borders to create balanced communities in which a
continuum of residents from young to old, affluent to blue collar,
independent to disabled, have a reasonable opportunity to live
and work.
The
Fair Housing Act created the Council on Affordable Housing (COAH),
to set "fair share" numbers (units of low and moderate
income, price-controlled housing) for each municipality, and administer
a program to certify municipalities as having met their obligation
to plan and provide for that number of fair share units.
The
Court also established an enforcement mechanism, known as the
Builders' Remedy, to ensure that municipalities could not shirk
their affordable housing obligation. Simply stated, developers
can sue a municipalities that do not have a COAH-certified plan
and force them to accept construction of at least five times the
number of affordable units required by COAH. In other words, 20%
of the units in a particular project must be affordable to low
and moderate income households; 80% are market-priced. The general
theory was that a portion of the profits from the market-rate
units would pay for the construction of the affordable units.
In
its Mt. Laurel decision, the N.J. Supreme Court hoped that the
threat of large, unwanted developments would motivate municipalities
to get right to the task of planning to meet their fair share
obligations and petitioning COAH for certification of their plans.
Surprisingly, this has not always been the case. The courts have
approved only eight Builders' Remedy projects since 1985. Nevertheless,
developers have threatened suit and forced a number of municipalities
without certified plans to approve enormous, often environmentally
unwise and poorly sited housing developments of 500 units or more
- often with 10% or less of the units affordable.
Largely
as a result of these massive developments, generally built against
the will of the municipality, many people think that affordable
housing is anti-environmental. Rather, municipalities that do
not take the necessary steps to create affordable housing and
to obtain COAH certification leave themselves vulnerable to unwanted
large-scale projects. Many towns have spent far more in court
trying unsuccessfully to prevent these developments than they
would have spent to meet their obligation, had they planned proactively.
Approaches to Meeting Municipal COAH Obligations
Since
its creation 16 years ago, COAH has been learning as it goes.
The agency has refined the formula it uses to assess municipalities'
fair share obligations, and has tried to make the program more
flexible. As a result communities can now satisfy their COAH obligations
by combining new construction with a combination of the techniques.
Since
the goal of the Fair Housing Act is to have more housing for low
and moderate income families, new construction is an essential
element of all plans. No municipality wants to have massive amounts
of new residential construction forced upon it as a result of
the threat of a Builders' Remedy lawsuit. In those situations,
decisions about the location and extent of the construction are
out of a municipality's hands, and may have significant negative
environmental and quality-of-life impacts on the community (the
"condos in the cornfield" scenario).
Not
all new construction is undesirable. Low and moderate income housing
that is suitable and attractive, located where there is adequate
infrastructure (including transportation), and not compromising
environmentally sensitive lands can be an asset to a community.
A number of NJ towns have decided that municipally sponsored construction
of new single and multiple housing units is the best way to fulfill
their affordable housing obligations. They decide how much, what
kind, and where the housing will be, acquire COAH certification
for their plans, arrange financing, acquire land and engage a
contractor to carry out the construction. In many cases, towns
use a combination of techniques to meet their obligation. For
example affordable family rental units are eligible for COAH rental
bonuses; a 50-unit development may satisfy 100 units of a municipality's
affordable housing obligation. And each bedroom in a group home
counts as one affordable unit.
As
part of its Master Plan's the Housing Element, a town can also
choose to satisfy part of its COAH obligation through inclusionary
zoning. This type of zone requires new construction projects to
include a minimum number or percentage of low and moderate-income
units, including rentals that are integrated with market-rate
units. The inclusionary zoning should only be allowed in areas
suitable for higher density growth, i.e., adjacent to compatible
land uses, with adequate infrastructure and no environmental constraints.
If the site is in a PA4 or PA5 designated by the State Plan, the
town must have received or applied for a center designation for
the area.
Inclusionary
zoning and projects that result from Builders' Remedy suits or
threats generally result in large numbers of new residential units.
All too often simply as a result of their size, these projects
result in significant environmental damage and long term increases
in local costs for schools, police, and roads. To avoid these
negative impacts, a number of towns are putting plans in place
where they fulfill their COAH obligation directly, using a combination
of techniques including the following.
- Rehabilitation
of existing substandard housing stock;
- Creation
of accessory apartments, shared senior housing or elder cottage
housing;
- Special
needs/group homes;
- "Buy
downs" of existing housing;
- Bonus
credits for family rental units;
- Conversion
of unneeded schools or other buildings into residential units;
and
- Regional
Contribution Agreements (RCAs);
- Creation
of assisted living residences.
Regional
Contribution Agreements
Through a COAH-approved RCA, a "sending" municipality
may satisfy up to 50 percent of its obligation by contributing
$25,000 per unit to a COAH-designated "receiving"
municipality in its region. The receiving municipality uses
the contribution to rehabilitate or create low or moderate-income
housing. |
Brick
Township's Accessory Apartment Program
Under Brick Township's (Ocean.) accessory apartment program
the Township will contribute up to $15,000 toward the creation
of a new, self-contained residential dwelling unit within
or attached to an existing home. The unit must have its own
kitchen, sanitary facilities, sleeping quarters and a private
entrance, and be restricted for a period of 10 years for qualified
low or moderate-income households or individuals.
After
10 years, the $15,000 contribution is forgiven. If the house
and accessory unit are sold in less than 10-years, the new
owner may continue to make the apartment available as affordable
housing, or may repay the $15,000 and terminate the agreement.
COAH limits each town to 10 accessory apartment credits.
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Group
Homes
Group homes for the mentally and physically disabled have
been eligible for generous affordable housing credits since
1990. Rocky Hill and Watchung are among the municipalities
that have group homes that earn one COAH credit for each bedroom.
In addition, the bedrooms also qualify for rental bonus credits,
so that a four-bedroom group home with a disabled resident
living in each room may qualify for up to eight COAH credits.
According to the Municipal Land Use Law, community residences
for the developmentally and physically disabled (group homes)
are a permitted use in all residential districts of a municipality.
(N.J.A.C. 40:55D-66.1). |
Write
Down-Buy Down Program
The Township of Roxbury (Morris) is offering $20,000 to each
of up to ten income-eligible households toward the purchase
of a market-priced, single family home in the Township. The
applicants must be within COAH income limits for affordable
housing, and must be creditworthy and pre-approved for a mortgage
at one of 20 participating banks. The price of the house after
the $20,000 deduction must be no higher than the maximum allowed
by COAH for the low or moderate-income level for which the
applicant qualifies.
Each
unit purchased through the "write down-buy down"
program counts as one credit toward the Township's fair
share number of affordable units. The houses in the program
are deed-restricted for 30 years, which means that during
this period they can be re-sold only as affordable housing,
at a restricted price, to income eligible applicants.
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Each
municipality must craft its own realistic solution based on the
town's particular needs and resources. New Jersey law also permits
municipalities that have applied for COAH certification to collect
development fees on new construction, and to use the funds to
carry out their affordable housing program (N.J.A.C.
5:93-5 and 8). As of June 2001, 142 NJ municipalities had
COAH-approved development fee ordinances, with a total of $126
million collected.
Development
Fees
To help towns finance low and moderate-income housing, COAH's
regulations (N.J.A.C.
5:93-8 et seq.) allow towns with certified plans to collect
fees on new market-rate development, to offset some or all
of the costs of a COAH-certified housing program. A municipality
may adopt an ordinance requiring developers to pay a fee of
up to one half of one percent (.05%) of the assessed value
of new residential construction, and 1% on commercial development.
(Residential developments with an affordable housing element
are exempt from these development fees.) The funds are deposited
into a low and moderate income housing trust fund and disbursed
according to a spending plan approved by COAH. Twenty percent
may be used for the expenses of preparing the affordable housing
plan and administering the affordable housing program. The
rest must go toward the costs of creating units through rehabilitation,
conversion or construction, in accordance with the town's
affordable housing plan. |
COAH's
Environmental Policies
COAH
has also made some progress in terms of its environmental policies.
The Council has a Memorandum of Understanding with the State Planning
Commission that recognizes the importance of focusing affordable
housing development where infrastructure exists, consistent with
the State
Development and Redevelopment Plan. COAH requires that towns
in Planning Areas 4 and 5 (rural and environmentally-sensitive
areas) plan any new affordable housing sites in designated centers
to protect the surrounding environs from sprawl development, and
encourages the same for Planning Areas 1, 2 and 3 (developed and
fringe areas). COAH gives priority to sites with existing sewers
and water service over those without existing infrastructure.
COAH
calculates a town's fair share number based, in part, on the amount
of land that is developable in the municipality. A municipality
with limited vacant, developable land can request a "vacant
land adjustment" from COAH, and this adjustment may reduce
a municipality's fair share number. A municipality can reduce
the number of acres available for development by showing how much
land it has in each of the following categories.
- Restrictive
covenants that run with the land (such as conservation easements);
- Steep
slopes over 15 percent if regulated by a local steep slope ordinance;
- Wetlands
(as delineated by the State);
- Floodplains
(as delineated by the State);
- Sites
listed on the NJ Register of Historic Places, plus a "reasonable"
buffer area;
- Land
that the town plans to purchase within one year for active or
passive recreational purposes.
COAH
does not, however, exclude land protected by other "critical
area" ordinances, such as stream corridor or wellhead protection
ordinances. Towns can keep unwanted Builder's Remedy developments
from those areas only by proactively finding and designating other
appropriate areas for affordable housing.
The Importance of Planning
The
bottom line on affordable housing and the environment in New Jersey
is that municipalities must be willing to meet their fair share
and do their homework, or risk some unpleasant consequences. They
must understand COAH regulations and comply with its certification
requirements. Every six years, COAH re-assesses regional housing
needs and other factors, and assigns a new fair share number to
each municipality. The agency plans to issue the next (third)
round of fair share numbers sometime in 2002, and municipalities
will need to readjust their affordable housing plans to meet their
new obligations.
To
make any major changes to a certified plan, the planning board
must first adopt the amendment(s), and then the town must endorse
the amendment (by resolution) and petition COAH for approval of
the amendment. A certified plan is good until the "next round"
numbers come out.
Proactive,
comprehensive land use planning and a housing plan with COAH certification
is the only way to protect a community from massive Builders'
Remedy projects that may degrade the environment and reduce quality
of life
Questions for Environmental Commissions to
Explore
-
Find
out if the Council on Affordable Housing certified the Housing
Element of your community's Master Plan. Nearly 300 NJ municipalities
are currently vulnerable because COAH has not certified their
plans. A number of builders repeatedly use this lack of local
action to force massive projects on a community. Contact COAH
(609-292-3000) and speak to the COAH planner responsible for
your region to find out the status of your municipality. In
fact, one law firm lists all the uncertified towns, encourages
builders to use their unfulfilled COAH obligations to force
high-density projects on these communities.
(See www.nj-landuselaw.com,
Offensive Strategies section)
If
COAH has not approved your town's housing plan, petitioning
for certification is the only way to keep matters in the hands
of the local governing body. A municipality can obtain temporary
protection from lawsuits for two years by simply filing its
housing element and fair share plan with COAH. To maintain the
protection, a town must complete the plan and petition for certification
within two years of that filing.
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Contact
COAH (609-292-3000) and speak to the COAH planner responsible
for your region. Ask what your town's record is on affordable
housing, and if housing units or approvals are in place. Find
out what your town can do to develop a plan that suits its
needs and meets its COAH obligation.
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Read the COAH
Handbook and Fair Housing Act regulations. Become informed
about what must be included in the affordable housing element
of the Master Plan. Learn about the options available to meet
your town's obligation without massive new construction (rehabilitation,
buy-downs, regional contribution agreements, group homes,
senior housing, etc.). Understand the methods of minimizing
negative impacts while maximizing the number of credits and
units of affordable housing provided.
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Contact the Housing
and Community Development and Housing Network (609-393-3752)
to find out if a non-profit community development corporation
is active in your area and might be able to help your town
develop affordable units.
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Learn how COAH requirements may influence your ability to
implement local zoning regulations. Review impacts on development
density, infrastructure, tax abatements, methods of funding
and phasing of development.
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Take what you learn to your town governing body and Planning
Board and talk to them about it. Explain how important it
is to petition for certification of the affordable housing
element and how concerned you are about keeping the plans
for affordable housing under local control.
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Read your Environmental Resource Inventory to find out if there are
any environmentally sensitive lands that should be excluded from the
vacant land inventory. Learn about ordinances that can help to limit
the damage to natural resources such as steep slopes. Check out ordinances
available through ANJEC's database.
-
Find
out how the New Jersey State Development and Redevelopment
Plan may impact your town and its COAH obligations. Check
out the State
Plan (609-292-7156)
Brief Outline of The COAH Process
A
general description of the municipal petition process.
Step
1: Municipality prepares Master Plan Housing Element and Fair
Share Plan
Master
Plan Housing Element includes:
- Inventory
of existing housing stock including number of units available
to low and moderate income households and number of substandard
housing with potential for rehabilitation;
- Projection
for housing construction including approved developments and
probable construction;
- Demographic
study on household size, income level, and age;
- Present
and future fair share needs and ability to meet the needs;
- Inventory
of lands and properties to meet obligation;
- Sewer
and water capacity of potential sites;
- Copy
of DEP approval and amendments to area wide water quality management
plans;
- Copy
of most recently adopted Master Plan;
- Copy
of the New Jersey Freshwater Wetlands and USGS Topographical
map for each potential site.
Fair
Share Plan is an action plan on how the municipal will meet its
affordable housing obligation. Options include
- Rehabilitation
of substandard housing;
- Regional
contribution agreements;
- Zoning
for inclusionary developments;
- Conversions
of schools, other buildings into residential units;
- Group
homes;
- Accessory
apartments, shared senior housing, elder cottage housing;
- Buy-downs
of existing housing;
- Regional
Contribution Agreements;
- Assisted
living residences.
Step
2: Municipality submits plans and petitions COAH for substantive
certification.
Municipalities
have two years to petition for substantive certification once
they have filed their Housing Element and Fair Share the state.
Filing the plans without actually petitioning COAH for substantive
certification protects the municipality from exclusionary lawsuits
if the municipality petitions for substantive certification within
2 years.
Step
3: 45-day public comment period on petition
If
no objections are filed on the petition, COAH either prepares
a compliance report or requests additional information that the
municipality must provide within 60 days. A municipality may be
asked to re-petition if substantial information is still required
by COAH.
Step
4: Mediate any objections raised during the public comment period
COAH
prepares a premediation report on the case to facilitate the mediation
process. Most disputes a town and an objector are resolved within
90 days. COAH completes a report that summarizes the results.
The municipality may be required to amend its petition.
Step
5: COAH certifies, certifies with conditions, or denies petition
Step
6: Municipality adopts an ordinance to support housing requirements
COAH
requires municipalities to adopt a fair share housing ordinance
including zoning ordinances within 45 days of substantive certification.
Step
7: Implement affordable housing plan
NB:
Municipalities may amend their plans any time after COAH grants
certification.
For Further Information
- Council
on Affordable Housing (COAH) for a copy of the COAH Handbook,
information on the Fair Housing Act, regulations governing municipal
obligations; 609-292-3000
- Coalition
for Affordable Housing and the Environment, 609-278-5656 for
information on state policies, contacts with environmental and
housing groups
- Housing
and Community Development Network for information on local
non-profits who can help with planning, construction and financing
affordable housing projects 609-393-3752
- State
Development and Redevelopment Plan for information on how
Planning Area designations relate to affordable housing obligations
- Association
of NJ Environmental Commissions (ANJEC) for specific questions
on environmentally sensitive approaches to meeting affordable
housing obligations, resourcecenter
@anjec.org, ordinances to protect
environmentally important areas like stream corridors, steep
slopes; 973-539-7547.
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