Public Advocate’s Testimony on A-500 before the Assembly Committee on Housing and Local Government

May 22, 2008

Thank you Mr. Chairman and members of the Committee for this opportunity to testify.

As you know, the Department shares your goal of ensuring that low and moderate income families have real access to affordable housing in New Jersey.  We were pleased to discover that several of the provisions you propose would help to accomplish the objectives we recommended in our report, Affordable Housing in New Jersey: Reviving the Promise. 

Although we are still reviewing the recent amendments, the Department supports the goals of the bill and many of its provisions.

First, the bill creates an important set-aside for housing affordable to very low income families, those earning 30% of the median income or less.  The bill charges the Council on Affordable Housing (COAH) with ensuring that 25% of all affordable housing units, distributed equitably among housing regions, be “reserved for occupancy by very low income households.” 

This provision is among the most significant achievements of the bill.  As we noted in our report, in the absence of a set-aside for the lowest income families, affordable housing tends to cluster around the moderate income range and not to reach those who most need help.  The bill’s set-aside promises real housing opportunities for households with the lowest incomes.  We hope that COAH, in implementing this provision, would ensure that each municipality within a housing region bears its fair share of the obligation to meet the housing needs of these very low income families. 

Second, the bill would inaugurate a new Housing Rehabilitation Program, abolish regional contribution agreements (RCAs), and replace the money that now flows to the cities by creating a Housing Rehabilitation Assistance Fund. 

This emphasis on the rehabilitation of substandard housing in urban centers is critical.  The constitutional obligation articulated in the Mount Laurel cases arose in part to give city-dwellers the privileged housing opportunities – and attendant benefits – that had traditionally been available only in the suburbs.  RCAs flout that constitutional principle by allowing wealthier municipalities to buy their way out of providing affordable housing.  The bill would end that questionable practice while also ensuring that our cities do not lose the resources they need to help their residents rehabilitate and maintain their homes. 

The bill permits rehabilitation assistance to households with incomes up to 120% of the median.  While assistance to the middle income families at the top of this range may be warranted, we urge the equitable distribution of rehabilitation assistance funds to eligible families at all income levels, including very low, low, and moderate income households.  The Committee could ensure such equitable distribution by further amendment to the bill or the Commissioner of the Department of Community Affairs could achieve it through the regulations the bill directs him to promulgate.

Third, the bill would require municipalities to provide incentives through zoning to developers who propose inclusionary developments.  These incentives must include increased densities and reduced costs. 

This is a positive development and a critical way to reach deeper levels of affordability.  COAH should be permitted to approve different floor plans, smaller floor space, parking adjustments, and other means to lower costs for developers so that they can offer options to very low income households.  In fact, Mount Laurel II requires that municipalities take affirmative measures, including granting incentives, to spur developers to meet the need for affordable housing.

Fourth, the bill would promote affordable housing options for people with disabilities and senior citizens.  The Annual Strategic Housing Plan must describe how the State will meet the needs of “[l]ow income senior citizens” and “[l]ow-income persons with disabilities, including but not limited to physical disability, developmental disability, [and] mental illness . . . .”  

Meeting the housing needs of these populations is vital to the core constituencies of the Department of the Public Advocate.  People with disabilities and senior citizens have especially urgent needs for affordable housing because without it, they are likely to end up trapped in nursing homes, developmental centers, psychiatric hospitals, and other institutions.  They enter such facilities, or remain in them, not because they need full-time medical care, but because they have no other affordable options with adequate support systems.  Indeed, New Jersey lags far behind most states in complying with the federal constitutional mandate to respect the desire of people with disabilities or mental illness to live in the community.  This lag results in part from the dearth of affordable, accessible, supportive housing options for them.  We are grateful that the bill recognizes this problem and includes provisions to begin to address it.

Fifth, the bill demands intelligent, coordinated, strategic planning on affordable housing.  To enable this process, the bill would consolidate related streams of State funding into a dedicated Affordable Housing Trust Fund. 

The Pubic Advocate supports all elements of the coordinated effort the bill contemplates, including this Department’s anticipated role in the interdepartmental working group.  An annual strategic plan, together with annual auditing of and reporting on the activities of the trust fund, would yield a more careful allocation of public resources and more aggressive leveraging of private resources to ensure real housing opportunities for eligible families.  In addition, the fund would attract municipalities into the COAH fold by offering them financial support for their COAH-approved affordable housing programs.

Sixth, the bill has various provisions to increase the transparency of State efforts to promote affordable housing.  These include, among others, various auditing and reporting provisions, a new demand for impact statements on affordable housing and smart growth in the rule-making process, and requirements for more complete information on COAH’s public website. 

This increased transparency would inform and re-energize the public debate on affordable housing, thereby contributing to real solutions.  We applaud this effort to stimulate broader participation and greater accountability in affordable housing efforts.

All of these provisions promise important advances toward the goal of providing real housing opportunities for the growing number of families who are struggling to find and remain in decent homes in New Jersey’s challenging housing market.

Other provisions raise questions that we hope will trigger further consultation to achieve the best bill possible.

First, the bill would amend the Local Redevelopment and Housing Law to require planning for the replacement of certain affordable housing units lost to redevelopment.  In its present form, the bill contemplates the replacement only of units “subject to affordability controls.” 

We are not certain how this requirement is meant to intersect with the proposed COAH rules.  Under these rules, a municipality that participates in the COAH process is generally subject to the requirement that one in five new units meet affordability standards.  It is unclear to us whether the bill is meant to add to, subtract from, or otherwise alter this regulatory requirement for redevelopments. 

Whatever the intention of the provision, we would like to work with the Committee to ensure that the bill takes adequate account of the redevelopment context.  Under the New Jersey Constitution and laws, a municipality may declare an area “in need of redevelopment” only if it is “blighted.”  Redevelopment efforts, when they are aimed at residential neighborhoods, therefore target lower income communities which are most vulnerable to conditions of blight.  The housing in such communities may or may not be “subject to affordability controls,” but it is often affordable to lower income families simply because of market forces:  More affluent families choose to live elsewhere.  If we allow redevelopers to demolish and not replace such affordable market-rate units, we risk the continuing contraction of housing opportunities for needy families.  In the Pubic Advocate’s two-year study of redevelopment in New Jersey, we have repeatedly seen redevelopment projects that threaten low-income families with the loss of their market-rate homes, leaving them with no real prospect of successfully relocating in the community or even in the State. 

We therefore urge the Committee to consider an amendment to the bill to clarify and possibly increase the obligation to replace affordable housing lost to redevelopment.  This replacement obligation is especially pressing in areas with so little affordable housing that families face bleak prospects when they are forced to relocate.  We would be happy to work with the Committee on amendments to address this issue.  In this effort, we respectfully recommend collaboration with the sponsors of eminent domain reform bills pending in both the Senate and the Assembly (S757, A1492, S559) that also propose amendments to the Local Redevelopment and Housing Law to address the replacement of affordable housing lost to redevelopment.

Finally, in its current form, the bill has no provisions that would encourage lead abatement in the State’s affordable housing stock.  As you may know, the Department of the Public Advocate undertook an investigation that revealed a public health crisis in the continuing exposure of children to toxic levels of lead in their homes.  Most of the State’s affordable housing was built before 1978 when the sale of lead paint was banned nationwide.

This bill presents an opportunity to contribute to solving this problem.  In particular, the proposed Housing Rehabilitation Program might advance lead remediation in the older homes of low and moderate income families.  The rehabilitation of an affordable housing unit might, for example, be required to include steps to ensure that the dwelling is lead-safe.  We would be happy to work with the Committee on pertinent amendments to the bill, and we look forward as well to collaborating with the Commissioner of the Department of Community Affairs as he promulgates regulations to implement this program.  These regulations could make lead remediation an important component of reinvigorated rehabilitation efforts.

Thank you again for inviting us into this important affordable housing dialogue.  We hope to remain in contact with you as this process unfolds.