|NJ court to decide fate of unspent affordable housing funds|
Published July 9, 2012
By David Levinsky
TRENTON — The fate of millions of dollars in unspent affordable housing funds could be decided by a state appeals court this week.
Gov. Chris Christie’s administration intends to seize as much as $200 million from municipalities’ affordable housing trust funds on July 17, claiming that state law gives towns until that date to “commit to expenditure” all funds or forfeit the leftovers to the state.
Affordable housing advocates and the New Jersey League of Municipalities have sued to stop the seizure. They say the state has never properly defined “commit to expenditure” or provided other guidance on how towns could protect the funds.
“They’re playing a shell game, where they come in and take the money and tell you after what you were supposed to do with it,” said Adam Gordon, a lawyer with the Fair Share Housing Center in Cherry Hill, which filed the suit to stop the state seizure.
“It’s analogous to being told the charges after you’re found guilty,” Gordon said.
Officials from the New Jersey Department of Community Affairs previously said the state would respect “contractual obligations” such as those reached by towns with developers or nonprofit groups. But towns have complained that not enough guidance has been given, and that the constant upheaval involving the state’s affordable housing regulations and oversight has made spending the accounts next to impossible.
“Towns have asked the state time and again what they need to do to protect these funds that are dedicated to affordable housing. The state has consistently refused to tell them,” said Bill Dressel, director of the New Jersey League of Municipalities.
Oral arguments in the case are scheduled for Friday morning in Newark. The court could announce a decision later that day.
As of June 5, about $13.3 million in unspent housing money remained in 27 Burlington County towns’ accounts, according to DCA figures.
The remaining balances range from a high of $5.41 million in Mount Laurel to a low of $48 in Maple Shade. Thirteen towns had zero balances.
The issue of the affordable housing funds first was raised in February, when Christie unveiled his budget proposal listing $175 million in unspent affordable housing money as revenue for the state’s general fund.
The municipal accounts are made up of money collected from developers’ fees, payments in lieu of taxes, and other related funds.
The July deadline was established under a 2008 amendment to the state’s Fair Housing Act signed by Gov. Jon S. Corzine. It specified that towns had to commit to spend the money within four years or forfeit it to the state to use for affordable housing programs.
The Christie administration has indicated it would use the money for activities to assist homeless veterans, disabled residents and renters.
Advocates such as Gordon contend that the budget specifies the funds only as revenue for the general fund, and that there are no guarantees they will be used for affordable housing programs.
“The legal language speaks louder than words,” Gordon said.
State lawmakers tried to help towns through language inserted into the state budget that would have allowed them to keep their accounts intact by passing resolutions, and with separate legislation that sought to give towns a two-year extension to spend their trust fund money.
Christie vetoed both the budget language and the extension bill. He also vetoed legislation that would have permitted municipalities to turn over trust fund money to a new state commission to buy foreclosed homes for use as affordable housing.
The conservative group Americans for Prosperity New Jersey had lobbied against the foreclosure bill, claiming that it would result in an increase in crime in some neighborhoods and that state government should not interfere in the housing market.
Staci Berger, director of policy and advocacy for the Housing and Community Development Network of New Jersey, said the governor vetoed measures that would have helped the state’s economy and communities.
“Investing in communities that need to create homes and address vacant, foreclosed properties would help achieve the governor’s plan for an economic comeback,” Berger said. “Instead, he let down New Jersey’s families and communities by vetoing legislation that would have provided the critical resources and tools necessary to move our state forward.”
Not all Burlington County towns will be sweating Friday’s hearing.
Florence, which had just over $2.1 million in trust fund money as of June 5, has agreements for all its remaining funds, Mayor Craig Wilkie said.
“The money is all committed,” Wilkie said. “We’ve got agreements in place with a number of different programs that will meet the requirements the state has.”
Willingboro also has received approval from the DCA to use all its remaining funds for a zero-interest loan program for low- and moderate-income families to use for home repairs.