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N.J. affordable housing payment plan shifts — again

In COAH on January 19, 2009 at 9:02 pm

http://www.nj.com/news/index.ssf/2009/01/post_56.htm

Posted by afriedma January 18, 2009 13:09PM

Just six months after advocates for the poor heralded a new law to create more affordable housing in New Jersey, parts of it may be set aside because of the slumping economy.

Gov. Jon Corzine has called for a one-year moratorium on a fee charged to developers of commercial real estate. He said the moratorium on the fee, used to fund housing for low- and moderate-income people, would spur economic development.

It was expected the 2.5 percent fee, created last year, would generate $160 million per year. But in six months, it’s raised only about $5 million, according to state Sen. Raymond Lesniak, D-Elizabeth.

“It doesn’t work, it hasn’t worked and it’s not working,” Lesniak said. “Two-point-five percent, 10 percent, 20 percent of nothing is nothing.”

Lesniak is crafting a bill that would waive the fee, and a state requirement for each municipality to use money generated by the fee to create affordable housing, for one year. The concept has the support of key legislative leaders in addition to the governor.

For more than two decades, the state had let towns pay other towns to fulfill their affordable housing obligation. Last year, the Legislature ended that practice in a shift that affordable housing advocates saw as a major advance.

Instead, money for subsidized housing was to come largely from the 2.5 percent fee charged to developers of commercial property. Previously, towns had been allowed to set their own fees for developers. Some declined to do so; others charged more than 2.5 percent.

But there’s been a big problem: Since the fee was standardized, real estate development has fallen sharply.

Affordable housing advocates don’t like the idea of suspending the development fee. They say it’s confounding that the state would slow action on providing housing for low- and moderate-income people in a time when there is a growing need for housing.

“We are opposed to a moratorium and don’t understand why this is the first thing to be cut,” said Kevin Walsh, associate director of the Cherry Hill-based Fair Share Housing Center. “Holding steady is one thing, but cutting the resources available to help folks with shelter is bad.”

Affordable housing has been a contentious issue in the state since the state Supreme Court found in a 1975 ruling in Southern Burlington County NAACP v. Mount Laurel that towns could not use their zoning to exclude the poor. Since then, the court has gone further, finding that towns have an obligation to provide for homes for lower-income people.

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