The COAH Bluff, the Midas Touch, and New Jersey’s Fight for Affordable Housing

Everything was going along great for the New Jersey Legislature in its now jittery, ambling pursuit of affordable housing across the state. June was looking promising as the state legislature was approached passage of the $32.9-billion state budget, and despite two-pronged concerns from an increasing number of localities — first over state guidelines, and second over commercial development fees to fund urban affordable housing — it looked like the Garden State was about to harvest a host of uniform housing mandates.

That is, until towns called the bluff. That’s right folks, you heard it here first: the COAH Bluff. Back in May, we saw a trend that had long been in motion really get under way. COAH, short for Council on Affordable Housing, an arm of the state’s Department of Community Affairs, was back, this time with a bona fide plan for municipal affordable-housing obligations.

Not five years ago, towns were racing to comply with COAH, but towns with very little developable land were scratching their heads, particularly in light of the fact that regional contribution agreements, where a town could pay off its affordable-housing obligation to another locality — typically a nearby urban locality — were likely going to become a thing of the past.

Well, not so fast. COAH, in 2007, was taken to task by the courts for using a faulty formula and had to revise its plan, unveiled late in 2007. But by that point, it was too late. Towns were emboldened. The formula, they said, were too uniform. After all, in the Garden State, it’s not just dense urban and semi-urban areas; we do have swaths of open space, farms, sprawl — everything! One generic plan, the towns said, was not a statewide cure-all.

So COAH went on tour. Lucy Voorhoeve, COAH’s executive director, with deputy in tow, appeared before any governing body that listened, and was basically told where DCA could put its affordable housing. Let me quote myself here from May:

To be sure, the state government wasn’t draconian in its legislation: Towns got to feel good about affordable housing by maybe providing some units in some remote corner of their municipality, or, if it couldn’t provide there, it could send an RCA to some nearby poor community.

For a while, COAH was a force to be reckoned with. You stuck with COAH, and if you didnt, your town could face dreaded builders remedy and exclusionary-zoning lawsuits.

Well, with the economy what it is and developers not jumping willingly into the affordable and senior housing market, it turns out that some towns are feeling pretty empowered, calling the COAH Bluff.

And it’s not just COAH. Just last week, the state Senate passed a bill that would use $20 million of monies raised from a 2.5-percent levy on the value of commercial development for urban affordable housing, thus getting rid of RCAs, or even the need for them, and allowing wealthier towns to set up their own affordable-housing plans.

This legislation, a hallmark of the incumbency of state Assembly Speaker Joseph Roberts, a Democrat of Camden, was touted as a leap forward. But not so fast.

The New Jersey State League of Municipalities immediately pounced on the bill, saying that in a time of municipal tax caps (a four-percent increase for municipalities is the state-mandated limit), towns would have no choice but to use the property tax ATM to finance affordable-housing obligations. Roberts has reportedly said that these details would be worked out in the fall, but those opposed are skeptical.

So why wait for the fall for drama when we’ve got today? More than 100 towns have signed on to a legal challenge of the series of affordable-housing rules. The Star-Ledger reported Sunday that the new measures would cost towns throughout the state a combined estimated $6 billion to $7 billion over the next 10 years.

Bill sponsors are promising that the Legislature will establish an affordable housing trust fund in the fall — a move that Sen. Ray Lesniak, a Union Township Democrat, called a “one-stop shopping approach for affordable-housing dollars.”

But towns are right to be skeptical. After decades of stalled housing remedies, there is room for skepticism. However, in a state of home rule, where spending runs rampant with individual school districts from town to town, each with its own police, fire, and public works departments, perhaps a little uniformity, by way of affordable housing, is a good thing. But it’s clear that this is not going to fly. The state of the COAH Bluff is strong.

Remember when Gov. Jon Corzine went on a 21-county, high school auditorium tour to sell his multibillion dollar package to restructure the state finances, AKA, his plan to hike highway tolls? That was a good way to get people to understand something they were otherwise vehemently opposed to. Perhaps Roberts and Lesniak should go on the road and tell people why their towns should invest in affordable housing, discuss the social benefits, and the long-term financial benefits.

Something’s got to give after all this time, and if it doesn’t, New Jersey’s suburbs, replete with the Midas touch, will be forever turned into Golden Ghettos.

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Matthew Brian Hersh served as senior editor at Shelterforce from March 2008 to October 2012. He studied English at Rutgers University and has spent his professional career in journalism, policy, and politics.

16 COMMENTS

  1. I must say that the League of Municipalities and others who are bemoaning the new rules are being spoiled brats. the fundamental point is to keep growth share, and the only people really crying about it are wealthy suburbs who should have figured out years ago that the people who work at Starbucks have to live somewhere.

    Nice article Hersh.

  2. Mike, you have to understand that NJ is lost in a quagmire of greed and corruption that can never be remedied. Aside from out of control government spending and obscene property taxers, COAH is the most vulgar display of socialism I have ever seen. The fact that it is still around is quite shocking to me. NJ Is forcing people to pay for things they have no responsibility to pay for. The reason you spit out that liberal garbage is because you don’t have to write a check for $7,000 to GOD knows who, for a house you just built. Wise up.

  3. Unless this is the real Ronald Reagan, I can’t take those comments seriously. COAH was born, Ron, out of a lawsuit that required towns to zone affirmatively for a wider range of housing options. The courts decided that towns did have a social responsibility to include housing for not just people in upper tax brackets.

    You’re mad because you paid a lot of money to your town to build a house?

  4. You should take the comments seriously. NJ IS corrupt. Listen to yourself and you too will see.. “social responsibility “????? What makes you think that the only people effected by COAH are upper tax brackets? When I was a kid, we couldn’t afford a house. So we rented an apartment! Owning a home is not a right.

  5. Certainly homeownership is not a right, and I don’t think anyone is saying it is, but towns do have a responsibility to provide housing for a larger demographic, so teachers, police, lower-income residents, can afford to live where they work. COAH provides for rentals as well — did you know that?

  6. Yes, I knew that. We can go back and forth all day, The fact is that most towns don’t have the need for it. With that and along with everything else in NJ, it falls on the back of the hard working guy. The bottom line is that more programs that need funding(more tax payer dollar) controlled by the state is a terrible idea to say the least. Look at NJ track record. That is why the tax payer is get clobbered coming and going in NJ. NJ: highest property tax in the nation, yet bankrupt. Ranked 48th in the most hostile state for business. 61% of all moves in NJ were out bound only according to a survey by United Van Lines since 2007. Coincidence? COAH money in the hands of the state?? get my picture? BTW, have you seen what some teachers and cops get paid?? You need to rethink the way you view people and the way the state does business. The taxpayer is not a robot that produces tax dollar revenue for every whim of the state. Its too much! What NJ needs now more than ever is a Republican in Office. Too many Democrats here and it shows.

  7. COAH is ill-conceived in its implementation, but its goals are admirable and necessary in places like New Jersey. We can talk off the record if you want. Citing a United Van Lines survey does not help prove your point — and I’m not sure what your point is. You are angry and arguing all over the place, as displayed in your equating high property taxes with affordable housing policy.

  8. You should have simply said from the outset that you believed in no housing policy from state and local governments and that you encourage the development of any type of housing, anywhere, that caters to only markets that best serve the developer and not the town. That would be your point, Ronald Reagan, stated succinctly.

  9. You really know how to keep it coming don’t you. I don’t believe NJ, especially NJ should have any say in anything in the private sector. I think COAH is socialism. Also, with the state government’s track record like NJ to continuously overspend and screw things up, should not be handling programs like this. No more I’m too tired.. I’m not a blogger, or maybe I should?

  10. First,I would like to tell you about myself. I am a 9th grade dropout.
    I had no choice at the time.My family of 6 kids lived in a housing unit.3 boys,3 girls in each bedroom.We were taught to work for what you want.By the time I was 10,with my father working 2 or 3 jobs,brought oir first home.Housing back then,was not a way of life.It was a way to help families to better tem selfs.most of the people,of whom i still keep in touch with,are all doing well in life.
    Now at 51,I worked myself into building a building,woith 20 condo units.
    I have learned so much in the last year.the building is just about complete.
    Now the problem.we are required to give back 2.22 units to coah.
    I have speaking with my town as to this.
    First,How do i give back 2.22 units…all about the money….
    Then I ask,well how much do I have to sell these units for .
    They have no clue.they told me to hire at more of my money to a PP
    He would have to tell me.
    Then I ask,Well this fund that you have ,How do I go about using this,Just a tought,Maybe the money im putting in,i could use.
    Again they had no clue.they would find out & get back to me.
    As a builder,why would I use my hard earned money to build units & be forced to give some away to coah ??
    They did not invest in my project.
    I might understand ,if I use the funds from coah to build,then I should.
    As the building is near complete.I am finding myself on the phone & reading info like this,maybe to find some answers.
    Cause as always new jersey is all about the money.
    I STILL HAVE TO CLUE WHAT TO DO WITH 2.22 UNITS…
    ANYONE KNOW OF 2.22 FAMILIES….LOL

  11. William,
    Sorry to hear about your hard time. I too am a builder and have to pay. I’m getting hit twice, once at work and once for the house I build for myself. Unfortunately we live in NJ, so that means no matter how you slice it you will have to pay. You will loose. Socialism wins. Sorry and good luck.

  12. It would not be so bad,if the a..‘s knew what they were talking about & let me know how much kickback,& i was told kickback was a bad choice of words…lol,i had to contribute..
    Thanks & gl to u also
    archie

  13. To be honest, I have always had a soft spot for the needy. When I was growing up we had it hard as a family. We struggled but we made due. No one helped us get a house we just did on our own. The main problems I see with COAH is: Knowing NJ’s track record with corruption, the money is NOT in good hands. Even if the COAH fees are not in your budget weather you are a builder or a private homeowner you HAVE to pay up. The very essence of that is catastrophic and will escalate. The fact that others don’t see the urgency and fault in this is mind boggling to say he least.

  14. After years and months wrangling with Pinelands and Wetlands and $16,000 later ( surveys, engineering fees, more surveys, more engineering fees, environmental studies), my daughter was finally able to subdivide our 11 acres in half to build. Since she is a single mom with two children, this has been a long emotional and financial struggle. Because she was able to use the land we gave her for a down payment, she was at last able to build! Her only option was an inexpensive modular home with no bells, whistles or frills. (no fancy countertops, linoleum flooring, etc.) Included in her building fees was also a $1,000 recreation fee to be paid to our township. She was shocked when she went to get her building permit which she was told would be $1,600 plus 1/2 of the Coah fee. Throughout the process of subdivision, no one mentioned that there would be a COAH fee! Although the home cost $86,000, the home was assessed at $150,000. Here comes the worst part … New Jersey’s COAH is based on an evaluation plan which is reached by dividing .48% into the assessment. This raised the COAH assessment fee to $312,500. At 1.5%, this raises her COAH fee to $4, 687.50!!! Is this outrageous or what! That fee was put in place on December 15, 2008 and she received her subdivision on December 18th 2008!! Why should a single mother who is building a home to be occupied by herself and her two daughters be saddled with such a payment. If Pinelands hadn’t held her up since 2003, she would have been in the house, years ago!! There should be some differential between someone building a “not for profit” home and someone building a development for resale at a profit. The builders have a choice. They can pay the COAH or build a required number of units of affordable housing. As someone else mentioned, people who cannot afford to buy a home can always rent. My daughter has rented for 7 years! So unfair!!

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