State used outdated housing projections, suit says
They ignored good data

Hunterdon Review
By CLAIRE KNAPP, Contributing Writer
Published: Feb 19th, 6:45 AM

CLINTON TWP. - The Council on Affordable Housing (COAH) used flawed build-out analysis and outdated growth projections to determine the statewide affordable housing need over the next several years.

That is one of the claims in a brief that was filed on Tuesday, Feb. 3, with the Appellate Division of the Superior Court on behalf of Clinton Township and 19 other municipalities from six different counties that are challenging Third Round rules and affordable housing obligations set by COAH.

Clinton Township Mayor Kevin Cimei said on Feb. 12 that he had read the brief and was surprised at what he said was the apparent disregard for facts that COAH employed in developing their affordable housing need. COAH has called for about 115,000 new affordable housing units to be built in the state by the year 2015.

“It seems they ignored good data in an effort to stay to a ‘political’ target of 115,000 units. I certainly hope the court sees these fact-based points as clearly as we do,” said Cimei.

Cimei said that former township mayor Nick Corcodilos was a leader in assembling the 20- town group and that he continues to support the efforts as a volunteer appointee to the township’s COAH Committee.

“He (Corcodilos) and attorney Stuart Koenig have done an outstanding job in marshalling support and gathering facts in compiling this lawsuit,” said Cimei.

Hunterdon Towns

The lawsuit against COAH was filed last July. Among the Hunterdon County towns that are participating in the lawsuit are Clinton Township, Clinton, Readington Township, Bethlehem Township and Union Township.

Most towns agree it was necessary to provide affordable housing to their residents but few, if any, have agreed with the mandate of how many affordable units they were required to provide as set by COAH in several “rounds” of six years each. Nonetheless most towns did their best to comply. When COAH issued new rules for the third round, town officials had apparently had enough.

Referring to the 20 towns in an executive summary, Koenig said, “These municipalities have participated in the COAH process, and joined this legal challenge because they have found the most recent adopted regulations to be onerous and unworkable.”

Many other towns might have joined the lawsuit but to do so, had to have filed their third round housing plan with COAH to be considered litigants “in good standing.” At the time the lawsuit began last year, most towns were still working on their housing plans.

Koenig’s brief addresses several points, including errors in COAH’s vacant land analysis, errors in projecting growth and allocation of growth for municipalities, and COAH’s alleged overstatement of housing needs. The brief alleges COAH failed to follow the direction of the court, which said that actual jobs should be counted instead of job generator calculations. It also raises concerns about unauthorized retroactive obligations, the financial impacts on local property owners, and some “unreasonable amendments” to COAH rules.

“When the court threw out the COAH rules in 2008, they turned the whole project over to a subcontracting firm from Philadelphia that had previously been used by Rutgers,” said Corcodilos when the brief was filed. “A series of consultants had worked for COAH over the years. The consultant misused data from the New Jersey Department of Labor (NJDL) to determine how many new jobs might be created.”

Corcodilos said despite a court ruling that COAH could not establish local obligations based on a lot of assumptions, that is exactly what the state agency what they did.

“What they came up with was a mess,” said Corcodilos. “This whole thing is systemic evidence of corruption in public policy making.”

Corcodilos said when Gov. Jon Corzine took office, he pledged 100,000 affordable homes for low and moderate income families would be built in the coming decade, which led COAH to devise a plan that would meet that goal instead of creating a more realistic plan.

COAH’s first step was to identify how much vacant land remained on which affordable homes could be built. The lawsuit points out several errors in COAH’s analysis.

“We included in our submission to the Court 100 images taking COAH’s vacant land, and overlaying it as a transparency on top of the underlying aerial imagery,” Koenig said. “As many municipalities have complained, we found airports, cemeteries, sewer plants, municipal buildings, county facilities, a detention facility, an incinerator, roadway medians and intersections, rear yards of homes, yard areas of commercial development, open space in condominium and cluster developments, all shown as vacant land in the COAH study.”

Koenig added that “we estimate the total error to be approximately 60 percent, using a study conducted by Montgomery Township that was submitted to COAH during the comment period, and by comparing COAH’s build-out in the 88 Highlands communities with the Highlands regional build out.”

Koenig said COAH has admitted the error, indicating they had never intended affordable housing to be built in cemeteries and roadway medians and they will work individually with municipalities to adjust housing obligations.

However, Koenig said such adjustments are, “insufficient to address the systemic errors in the methodology.”

Statewide Need

“We point out that the computation of statewide need of 115,666 affordable units is not a fixed number,” said Koenig. “It depends upon projected growth in housing units. If the housing units are over-projected, then the statewide need is over-projected.”

Koenig said COAH used NJDL projections in jobs and population released in 2006, but have ignored the June 2008 NJDL data that substantially reduces the projections made two years earlier even though it was brought to COAH’s attention during the comment period before establishing new rules. The 2008 data would have reduced the statewide projection of needed affordable housing by about 30,000 units between 2004 and 2018. Employment projections also declined between the 2006 and 2008 reports.

“COAH’s actions had the effect of artificially inflating the statewide affordable housing need,” said Koenig. “COAH used what they knew to be a flawed vacant land and build-out analysis to estimate growth potential. COAH also used projections of growth that were outdated and overstated for both housing and employment in order to assign projections of growth to municipalities and ignored more current data.”

Another serious point made in Koenig’s brief is the few mechanisms left under which municipalities can meet their affordable housing obligations. In most cases, towns will have to use taxpayer money to provide the affordable homes.

“The regulatory scheme establishes that an average subsidy of $161,095 is required to develop an affordable housing unit, and that 115,666 such units are required,” said Koenig. “The potential program cost is over $18 billion.”

Koenig said one study of available funding mechanisms concluded there would be a shortfall of as much as $2 billion per year, or $20 billion over the next 10 years. That shortfall would have to borne by already tax-stressed property owners.

“The whole COAH structure needs to be revised,” said Cimei. “We need affordable housing, however not at an estimated $18 billion price, almost all on the backs of our already overtaxed residents and businesses. Seeing that the need was overstated, and hence the cost was overstated, in a systemic way, I hope the courts or legislature see the need for overall COAH reform.”

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