Sunday, December 9, 2007

Affordable Housing in Aberdeen

Note: The numbers below have been provided by the Council on Affordable Housing and it's review of Aberdeen's Housing Element and Fair Share Plan.

Update: On December 17th, COAH voted to increase the affordable housing ratio to 20%, double the cost of RCAs, and reduce the age-restricted share to 25%.

Democratic leaders in the New Jersey State Assembly have begun pushing through the housing committee a bill that would end regional contribution agreements (RCAs). The practice allows municipalities to satisfy up to half of their affordable housing requirements by “purchasing” units in other communities. If the bill passes, the lost opportunity to use RCAs will be just one more mistake Aberdeen has made in managing affordable housing.

In 1971, the NAACP sued the town of Mount Laurel for discriminating against low- and moderate-income people through exclusionary zoning. The state supreme court decreed that all communities had a constitutional obligation to zone for their fair share of affordable housing. In 1975, the courts ruled that communities could not exclude low-income housing from certain neighborhoods. In 1983, following a second suit by the NAACP against Mount Laurel, the court established guidelines and procedures for communities to comply with the “Mount Laurel” decisions.

To force compliance, the courts instituted the “builder’s remedy” whereby a developer could sue the township for failing to fulfill its fair share obligation of affordable housing. If the developer won, the courts would allow him to construct a development of higher density than allowed by zoning so long as 20% of the units were dedicated to affordable housing.

In 1985, the state legislature passed the Fair Housing Act which established the Council on Affordable Housing (COAH). The purpose of the act was to provide specific affordable housing guidelines for each community. Although the guidelines are voluntary, any community whose plans are certified by COAH is shielded from developer lawsuits.

In 1990, Aberdeen lost two developer lawsuits involving Aberdeen Forge and Applewood (both in the Freneau section) and fell under court oversight. In 1993, the court required Aberdeen to submit its affordable housing plans to COAH to ensure compliance. In December, 2005, Aberdeen submitted revised plans to COAH for third round certification.

Under COAH guidelines, a community’s fair share is equal to an eighth of its projected growth in residential housing and a twenty-fifth of projected new jobs. In 2004, Aberdeen’s ten-year projections were 1,089 new residences and 457 new jobs for a total obligation of 154 COAH units. However, much of the new construction is discounted because it includes affordable housing, so the actual obligation is 87 units. Added to our prior obligation (for the years up to 2004, including credits) of 208 units, and we’re liable for the creation of 295 units.

Generally speaking, a town could allocate half of its COAH obligation to age-restricted units and discharge the other half through RCAs. Each RCA costs about $35,000 and the money typically goes to poorer communities that need the money to refurbish dilapidated apartments. Developers would gladly pay the fee as part of a PILOT program since the difference in value between market rate units and COAH units far exceeds $35,000.

However, in our instance, the math works differently because I’ve summed different rounds of COAH obligations and already discounted credits. But, using the numbers provided by the Council on Affordable Housing, Aberdeen made three big mistakes.

RCAs – Aberdeen had the opportunity to purchase 157 RCAs thereby reducing our COAH obligation by 157 units. The vast majority of the cost would have been picked up by developers who strongly prefer market rate units to COAH units. Instead, Aberdeen only plans to purchase 36 RCAs, just 23% of our legal allotment.

Freneau – The entire 68-unit Aberdeen Summit development on Wilson Avenue will be entirely COAH units. Though restricted to two bedrooms, none of them will be age-restricted. For those concerned that such a cluster of affordable housing units could create an undesirable area, the township has chosen to double-down.

COAH rents (including utilities) are limited to 30% of income (28% for buyers). The units are for those of moderate income, defined as earning up to 80% of the median income. In Monmouth County the limit is $65,637 for a family of four. However, if you restrict the COAH units to those of very low income, you get two credits for each COAH unit. Very low is 30% of the median or $24,614 for a family of four in Monmouth County.

Of the 68 COAH units on Wilson Avenue, 57 will be restricted to families of very low income.

Bookkeeping – Aberdeen is responsible for creating 295 affordable housing units. The math is simple – 36 RCAs + 92 COAH units at the senior center (South River Metals site) + 68 units on Wilson Ave. + 57 bonus points for very low income housing, + 44 units at Anchor Glass equals 297 units. That’s two more than we need.

If two units don’t sound like much, it’s the equivalent of $70,000 in RCAs. It’s a mistake to assume we could use those credits in the future since we’re building the COAH units at the senior center on Church St. in anticipation of development at Aberdeen Forge and Anchor Glass. If those developments don’t happen, we could be working off our surplus COAH units for years to come.

So, we’re welcoming the poorest of the working poor, using only 23% of our allotment of RCAs, and building more COAH units than required. Who says we’re not a charitable community?
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