NEWARK, NJ-The saga continues: Towns do not have to give back $164 million in affordable housing funds to the state to balance its budget. At least not yet.
New arguments about the long-running issue will be heard June 5 in Newark before a state appeals court panel.
Earlier this week, Judge Jose L. Fuentes issued a temporary injunction against New Jersey taking the money which towns have held in trust for projects that would fulfill their affordable housing responsibilities.
The state's Council on Affordable Housing had voted May 1 to seize the funds, since the money had gone unspent for more than four years. The council had not met for two years before the vote, having lapsed into quiescence after Gov. Chris Christie's attempt to abolish it with a reorganization plan.
Last week, The Fair Share Housing Center, an affordable housing advocacy organization, went to court to try and stop the seizure of the funds.
The exact amount of funds hanging in the balance is not certain. The state estimated it to be $142 million during previous court arguments last summer. Now, the state League of Municipalities estimates the amount has grown to $164 million.
The trust funds are collected as fees from developers, who must ante up before any market-rate project is approved.
“We welcome and appreciate the Court's prompt action,” said Janice S. Mironov, president of the league and mayor of East Windsor in a statement after the stay was granted. “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.”
Mironov said the state was making a “brazen raid” on town funds to cover its own budget needs. However, council members cited a 2008 law that required towns to spend the funds and move forward with projects within a reasonable amount of time.
The commercial real estate industry group NAIOP's executive director Michael McGuinness tells GlobeSt.com he sees the municipalities as being a bit “disingenuous.” They could have pursued their projects whether or not the COAH board met, he says, but many dragged their feet on approving affordable housing plans..
One recently funded project involved making 148 modest-priced apartments available in Middle Township for those displaced by superstorm Sandy.
Lisa Ryan, a COAH spokesperson said that “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.
Meanwhile, the overall question of how to meet the voracious demand for lower-cost housing is still hanging. Democratic lawmakers have called on Christie administration officials to focus on that issue and consider their proposals if the COAH board is no longer going to actively function.
First, the matter of the council's status and authority to order return of the funds to the state will have to be put to rest.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
