New Jersey has roughly $300 million in a housing trust fund that is currently unused, so on first glance, a state senator's proposal to create a “Foreclosure Relief Corp.” that would use those monies to convert REO to low- and moderate-income housing seems like a pretty good idea, particularly since the state's affordable housing mandate remains up in the air.
The new entity would use those socked-away trust fund dollars to buy foreclosed houses, which would then be converted to low- and moderate-income housing. Towns would get credit toward affordable housing obligations. Lenders who participate would get credit under the Community Reinvestment Act, which promotes investment in cash-starved communities. Lesniak predicts his plan could create as many as 30,000 new affordable homes in New Jersey.
Lesniak's office told Rooflines that this initiative could be characterized as a follow up to the unsuccessful effort to legislatively abolish the Council on Affordable Housing, the state's former affordable housing regulatory body. COAH was ultimately dismantled by executive order in 2011 by Gov. Chris Christie. The affordable housing mandate, however, remains.
Lesniak's bill has yet to be released, but we look forward to seeing the details as well as the kind of reception this gets with the state's housing advocates.
In the meantime, Staci Berger, director of policy and advocacy at the Housing and Community Development Network of New Jersey, the statewide CDC association, said in a statement that “We are looking forward to seeing the details of the legislation, and to working with Senator Lesniak and others on this effort.
“We're glad to see the Senator working on this issue, and applaud this effort to address New Jersey’s housing crisis. Senator Lesniak recognizes there's a glut of foreclosed homes in the state, and there are more on the horizon as the Court restart the foreclosure process. At the same time, we have a tremendous need for homes people can afford, in communities across our state. This proposal could be an opportunity to bridge that gap.
A related story here is that the Network, the Corporation for Supportive Housing, and the Mercer Alliance to End Homelessness have filed an amicus brief with the state Surpreme Court's Appellate Division seeking to invalidate Christie's executive order dissolving COAH and placing it under the aegis of the state's Department of Community Affairs.
Photo by Matthew Brian Hersh