Clock ticking on spending affordable housing funds
By: David Levinsky
Online : phillyBurbs.com
Trenton - Towns across New Jersey are scrambling to devise ways to use $175 million in unspent affordable housing funds before the state seizes it July 1, but crafting plans alone may not be enough to keep the money in local hands.
Gov. Chris Christie's administration appears to be taking a hard line on the "use it or lose it" clause in the affordable housing law, which specifies that towns must spend or "commit for expenditure" all money in their municipal housing accounts by July 1 or forfeit the leftovers.
The municipal accounts are made up of money collected from developers' fees, payments in lieu of taxes, and other related funds.
About $175 million is still unspent statewide, and Christie's proposed budget lists that sum as revenue.
About $19 million of the money is in Burlington County towns' accounts, according to state Department of Community Affairs figures.
The Christie administration's plan for the seized funds is largely undefined, and Democratic legislators, who hold majorities in the Assembly and Senate, have expressed strong misgivings about the planned forfeitures, claiming they will leave communities with no way to fund additional affordable housing projects.
"There’s not going to be any funding mechanism at all," Assemblyman Vincent Prieto, D-32nd of Secaucus, said last week during an Assembly Budget Committee hearing with Community Affairs officials. "How will those towns be able to create affordable housing?"
Acting DCA Commissioner Richard Constable responded that municipalities have had plenty of time to spend the money in trust fund accounts, but have largely chosen to ignore the directive.
Burlington County's 40 towns have collectively spent about $29 million of the $48 million that accrued in their trust funds, according to DCA figures.
"It was a choice that these municipalities made during the four-year period not to make use of those funds," Constable said. "The administration does not feel these funds should languish."
He said the administration would comply with the housing law's mandate that forfeited funds be used for affordable housing activities in the regions where they came from.
Municipal officials complain that the affordable housing regulations have largely been in flux for several years because of ongoing litigation, and that they have received little to no direction on permitted projects for trust fund money.
Christie tried to eliminate the state Council on Affordable Housing - the agency that governs compliance with affordable housing laws - and assign its duties to the DCA. But a state appeals court recently overturned his action, stating the governor did not have the power to order the reorganization. The Christie administration plans to appeal the decision.
"I tell you, COAH is an enigma. It's been very difficult to figure out what to do,"North Hanover Mayor Mike Moscatiello said last week.
His township has spent about $64,000 of its trust fund money on affordable housing rehabilitation projects in the last four years, leaving about $178,000 in unspent funds in danger of state seizure.
Moscatiello said the township is working with the Burlington County Bridge Commission's planning firm, Community Grants, Planning and Housing, to craft a plan for the remaining money, which they hope to be able to continue to apply toward rehabilitating housing.
Bridge Commission spokeswoman Liz Verna said the firm is providing planning help to North Hanover and other county towns at no cost to them. Cinnaminson and Mansfield have also expressed an interest in working with the planner, Verna said.
The commission has a contract with Community Grants, Planning and Housing to assist towns with grant applications and other planning initiatives. So far, the firm has billed the commission $2,952 for the affordable housing assistance, Verna said.
But plans alone may not be enough to keep the money. Although language in the affordable housing law specifies that only uncommitted funds may be seized, municipal officials and affordable housing advocates have complained that the state has not said how it will define "committed."
"The Christie administration has been very cagey about that," said Adam Gordon, an attorney for the Fair Share Housing Center in Cherry Hill.
DCA spokeswoman Lisa Ryan said the state would respect "contractual obligations" such as those reached by towns with developers.
"Other than that, we would expect the funds would be turned over to the state," Ryan said.
Gordon said the plan appears to be a simple money grab by the administration.
"(Christie) seems to be using it to replace money that would otherwise come out of the general fund," he said. "We're very concerned he'll use it to plug a hole in the budget while cutting taxes for millionaires."
The center supports legislation introduced by Democrats to either extend the deadline or give towns the option to use the unspent money to purchase foreclosed homes for affordable housing, Gordon said.
"There's a lot of good ideas out there. The worst one is for the governor to use it as a one-shot gimmick," he said.
Assemblyman Declan O'Scanlon, R-13th of Little Silver, said Democrats have themselves to blame for the forfeiture since they crafted the 2008 amendment to the Fair Housing Act that set the July deadline. He said the law specifies how the towns or state should use the funding.
"If folks wanted to use it for something else, they ought to go back to the law's original authors," O'Scanlon said.
Some municipal officials in the county said they would not rely on the Legislature to extend the deadline for using the money.
"We're going to spend every dollar we have left, if we can," Evesham Mayor Randy Brown said.
The township has already used all but about $300,000 of its $6.3 million trust fund account, largely on the development of affordable homes.
"We've been very successful. A lot of residents who have spent most of their lives in Evesham have been able to stay in town thanks to our efforts," Brown said.
Burlington Township has spent $1.2 million of its $2.8 million, mostly on extensions of deed restrictions on existing affordable housing stock.
April 8, 2012