NJ Court Determines How Many Affordable-Housing Units Needed By 2025

Ruling sets statewide housing quota for new affordable units at close to 155,000, according to Mercer County Superior Court Assignment Judge Mary Jacobson.

A Superior Court judge's ruling on two Mercer County communities' affordable-housing obligations has finally answered the question of how many homes for low- and moderate-income residents New Jersey towns should provide for by 2025.

In her ruling that set a statewide housing quota for new affordable units at close to 155,000, Mercer County Superior Court Assignment Judge Mary Jacobson struck a compromise between the higher number that housing advocates say is needed and the smaller amount that municipalities had sought. Jacobson recognized the importance of the 217-page ruling she issued last Thursday.

"The court hopes … the transparency of the judicial process leading to the adoption of the court's methodology will assist other courts grappling with similar issues and - eventually - will assist with a reconstituted COAH in ensuring continuing compliance with the Mount Laurel doctrine," Jacobson wrote in concluding her decision.

She was referring to the former state Council on Affordable Housing that had overseen municipal efforts to comply with the New Jersey's Fair Housing Act that was signed into law to implement the state Supreme Court's Mount Laurel doctrine, which says all communities must provide their fair share of homes for those of limited means. The Supreme Court replaced COAH with court approvals after COAH was unable to pass new affordable-housing rules for 16 years.

The case on which Jacobson ruled began more than 2 ½ years ago as an attempt to evaluate the affordable-housing plans of Mercer County communities. Most of the Mercer municipalities wound up reaching agreements with the Fair Share Housing Center, the public-interest organization that has been leading the effort on the issue, to zone for or build affordable units. Princeton and West Windsor, both wealthy communities, did not.

Manual for affordable housing

With an eye to the more than 100 communities that have yet to strike Mount Laurel obligations and the lack of COAH to write rules for calculating those needs or any wide-ranging court decision to govern the process, Jacobson's decision reads like a manual for determining a community's affordable-housing obligation. Municipalities are required to zone for affordable housing, but not necessarily build it.

In order to calculate the obligations for Princeton and West Windsor, Jacobson calculated numbers for the state because each municipality in responsible for providing an opportunity for the construction of just a portion of the affordable units needed within its region

The process for calculating how many affordable homes each municipality should zone for has been, as Jacobson noted more than once, "time-consuming and difficult." With an order from the state's highest court to follow the process COAH used to file as closely as possible, Jacobson's ruling painstakingly explains how she - and the special master she brought in to help sort out the issues - calculated the four numbers that make up a community's total obligation.

Using estimates of households and wealth, projections of job and population growth and calculations of acreage available for development, Jacobson's long-awaited decision creates a methodology for determining the need for new development. It comprises a present need that accounts for substandard, overly expensive, and overcrowded housing, the amount of unmet need that accrued during the "gap period" from 1999 through 2015 when no valid COAH rules were in place, and the prospective need expected to arise from 2016 through 2025. A municipality must also continue to meet any prior need - established by COAH through 1999 - that remains unmet. While two other judges had made prior rulings, neither had spelled out a calculation of housing obligations on a statewide basis. In the case of the two Mercer communities, Jacobson ruled that Princeton must provide for 1,474 total units - 753 of which would cover the housing need for the gap period and prospective need, or from 1999 through 2025, with the rest representing past and current obligations. West Windsor must zone for 2,531 homes, 1,500 of which are for that new time period.

Jacobson calculated the total number of low- and moderate-income units needed for the gap period and into 2025 at 154,581. Additionally, the past and present needs total 150,998, bringing the grand total rehabilitation and new construction affordable housing requirement to more than 305,000.

Different arguments

The judge noted that she was faced with two very different arguments in the case. Fair Share Housing Center contended that housing calculations should be made using the prior COAH's methodologies, while the municipalities had argued that any obligations set had to be "reasonably likely to occur." According to the court decision, Fair Share's expert had calculated the gap and prospective need requirement for affordable housing at almost 340,000, while the municipalities has put it at 63,070.

"The strong advocacy of the experts to support either higher (FSHC) or lower (municipalities) obligations caused the court to approach all party recommendations with healthy skepticism and some dismay when their models resulted in vastly divergent calculations of need," Jacobson wrote. The special master recommended one side or the other's approach, then Jacobson "evaluated his positions against the record and occasionally selected a different option that the court found more convincing."

More often than not, the master sided with the municipalities' expert and the resulting total is between what Fair Share and the municipalities' had sought.

Still, Fair Share director Kevin Walsh was pleased.

"Judge Jacobson's decision recognizes the very substantial need for homes for working families and people with disabilities in New Jersey," he said in a statement. "This ruling sends a strong message to any town still seeking to exclude working families that they won't succeed. While we are still examining the impact of this decision and disagree with some of the ruling, this decision is the latest development in a process that is laying the groundwork for tens of thousands of new homes to address New Jersey's housing affordability crisis."

To appeal or not to appeal

Walsh said the center is considering whether to appeal those parts of the decision with which it disagrees. Michael Cerra, assistant executive director of the New Jersey State League of Municipalities, said he would be surprised if Fair Share did not appeal.

"I don't think anybody got what they wanted … she kind of played it down the middle," he said. "We are pleased she rejected some of what she called an inflated assessment" by the Fair Share expert, Cerra continued, adding, "but this is still a challenging number for towns."

But Jacobson also had words for the municipalities' expert who had painted a dim portrait of the likelihood of the state adding just more than 40,000 new affordable units through 2025. Jacobson said the Fair Share expert's analysis "supports the reasonableness and achievability" of the affordable-housing quotas she set for the state.

Fair Share says that among the settlements it has negotiated with communities is one in Woodbridge that will result in 50 affordable units being built in a mixed-use development in a former manufacturing plant and a 100-unit fully affordable development in Plainsboro on land donated by the township.

"Over 190 towns have taken the initiative to create opportunities for affordable homes in their communities without waiting for legal intervention," said Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey. "New Jersey needs more homes people can afford. We're hopeful this decision motivates more towns to do the right thing and create more affordable home opportunities for all residents."

In a statement posted on the Facebook page of Princeton Mayor Liz Lempert, she and Council President Jenny Crumiller indicated their willingness to work with the obligation the judge ordered.

"We are glad that a decision has been reached so that we can focus our time and dollars into creating opportunities for more affordable housing," according to the statement. "The obligation number set by Judge Jacobsen is well within the range of what we were expecting, and we feel confident we will be able to present a plan to the court that meets that obligation, adds needed diversity, and energizes our local economy through smart growth planning."

Representatives for Fair Share have been happy with the result, pointing to the 190 settlements that have achieved with towns and stating that some of construction of affordable homes has already begun. The league, though, continues to call - as the Supreme Court did three years ago - for a legislative solution.

"The 154,000 number can't all be met through inclusionary zoning," Cerra said referring to the practice in which developments include both market-rate housing and some units set aside for the low- and moderate-income people. "Tthe local affordable-housing trust funds don't have enough money to do all that's needed, there has to be some involvement by the Legislature and the administration."

While Cerra said he expects lawmakers will soon take some actions on foreclosures and other measures that should help, those would just be "piecemeal" and not enough. "We obviously want comprehensive reform."

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