Ten towns protest COAH rules

Reprinted from The Hunterdon County Democrat
By Gene Robbins
Thursday, February 07, 2008

In unity, there is strength.

That’s the concept being recycled by municipalities who are banding together to fight the state’s new affordable housing demands and the burden it would place on their taxpayers.

The rules appear to force a larger obligation on municipalities, while limiting the ways to comply without a major impact on property taxpayers, says Clinton Township Mayor Nick Corcodilos.

The group of 10 municipalities, including one in Warren County and one in Somerset, presented a letter of their grievances to a state Council of Affordable Housing public hearing in Raritan Township on Tuesday afternoon.

The state published the COAH rules on Jan. 22 and is in the midst of a 60-day comment period. COAH projects adopting final regulations no later than June 2.

The concept of a unified approach to a common problem was first used by county municipalities along the routes 22-78 highway corridor to object to the State Plan’s designation of central Hunterdon as an area of potential growth development. Clinton, Lebanon, High Bridge and the townships of Franklin, Clinton, Union and Readington used common and regional arguments in discussions with state planners to justify their arguments to change much of the State Plan’s designation for the area.

The group has stayed together, gained regional respect, worked on regional transportation issues and there are now more than seven municipalities involved, said Mr. Corcodilos.

“You might say we’ve developed a good reputation as a Hunterdon advocacy group,” said Mr. Corcodilos. “Working together on COAH matters is a natural for us.”

Since then, Hampton and the townships of Tewksbury, Bridgewater in Somerset and Washington (Warren) have joined the group, Mr. Corcodilos said.

The group operates informally, even without a chairperson, he said.

One of the group’s main gripes, he said, is that the COAH rules are illegal. He said they violate the Fair Housing Act’s provisions that say the state cannot impose a financial burden on taxpayers to fulfill the housing obligation.

The new rules establish new, larger affordable housing quotas in addition to those already met by many municipalities.

There’s no way municipalities can impose retroactive fees on development built in that period, and the only recourse would be for tax dollars to pay for building affordable housing as municipal projects or regional contribution agreements (RCAs) by which a municipality will send money elsewhere to fund affordable housing there.

Mr. Corcodilos and Readington Township Committeewoman Julia Allen made those arguments at Tuesday’s hearing, bringing responses from Joseph Doria, commissioner of the Department of Community Affairs.

Ms. Allen testified that “it doesn’t appear possible to implement this plan without seriously impacting taxpayers.” She said the growth share rules apply to about 100 houses approved in the last four years, as well as to smaller, approved subdivisions that will be built over the next few years. But the township never collected the higher development fee or an in-lieu payment from a builder of fewer than eight houses, she said, meaning the taxpayers will have to make up the difference.

Readington will have to borrow money to meet the obligation, she said.

At that point, Mr. Doria interrupted to say the township had other options, like finding tax-credit programs and working with entrepreneurial builders. He said they were “all over the place they come in every day.”

“We don’t expect the property taxpayer to bear the burden,” Mr. Doria said. “No property tax money should be used. We do not encourage it. We do not support it.”

The newest set of proposed COAH rules keep the “growth share” concept to tie the number of future affordable housing units to how much a community grows, but changes the definition of growth to increase the number of units that must be built. Mr. Corcodilos said the rules will have a “chilling effect on new development.” For instance, he’s been told about a $100 million office complex in Branchburg that would face perhaps $10 million in fees to finance affordable housing.

“Do you think that is going to be built?” he asked rhetorically.

He said there was no rationale for the price of a RCA almost doubling, and municipalities would face costs to plan for or even build units.

The 2007 income guidelines say that, in Hunterdon’s region, “low income” is $37,120 for a couple, and “moderate” means an income of $59,392 for two.

In mid-January, attorney Stuart Koenig wrote Union Township a memo saying the proposed regulations limit the ways in which the municipality can comply with the obligation, and increases the cost of compliance.

It’s likely that a housing development will struggle just to include the affordable units to satisfy the obligation it’s creating, he said. Even that stretch would make them economically unviable.

“This leaves RCA or municipal construction as the only viable means to satisfy a sizeable obligation,” he said. However, the cost of an RCA unit will increase to $67,000, and a developer’s payment to avoid building an affordable unit will be capped at $145,903. Fees on developers fees may be increased to 1.5% of equalized assessed value for residential and 3% for commercial.

© 2008  The Hunterdon Democrat

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