Published December 16, 2013
By David Levinsky

TRENTON — New Jersey lawmakers are trying again to suspend a development fee on commercial and industrial construction that is intended to help finance affordable housing.

Assembly Bill 4457 and its companion, Senate Bill 3116, would reinstate a moratorium on the fee that expired in July and extend it until Dec. 31, 2014. It would also require any fees collected since July to be returned to developers.

The measure, which is sponsored by Democrats John Burzichelli, Troy Singleton and Pamela Lampitt, was ad-vanced Thursday by the Assembly Appropriations Committee.

Lawmakers said the state’s economy was still too fragile to assess a fee on development-creating jobs.

“We all support affordable housing, but we also must be cognizant that the state’s economy continues to strug-gle with high unemployment and paltry economic growth,” Burzichelli, D-3rd of Paulsboro, said in a statement after the committee voted. “This moratorium is the right thing to do until we’re confident the economy has re-bounded and we’ve created enough jobs to sustain the recovery.”

Arnold Cohen, senior policy coordinator for the Housing and Community Development Network of New Jer-sey, was the only person to testify Thursday against reinstating the moratorium. He said doing so would rob towns of one of their only funding sources for affordable housing.

The state Council on Affordable Housing has been ordered by the New Jersey Supreme Court to devise new affordable housing quotas for municipalities early next year.

“This fee is a critical aspect of towns being able to meet their (affordable housing) obligations, whatever that turns out to be,” Cohen said.

The fee was enacted in 2008 when Democrat Jon S. Corzine was governor. It required developers to set aside 2.5 percent of the cost of any nonresidential project to help towns meet their affordable housing obligations.

Lawmakers originally froze the fee with a two-year moratorium in July 2009 after the housing market collapsed and sparked a national recession. It was extended another two years in 2011 but expired July 1 after Gov. Chris Christie conditionally vetoed a bill approved by the Democratic-led Legislature that sought to extend the mora-torium until January 2018.

In addition to extending the moratorium, the bill included language directing the New Jersey Housing and Mortgage Finance Agency to create a program to purchase foreclosed properties for resale or rent as affordable housing, an idea Christie twice vetoed previously.

In his conditional veto, the Republican governor recommended that the Legislature extend the moratorium again, but he eliminated all language related to the proposed foreclosure program.

Rather than vote to concur with Christie’s recommendation, Burzichelli opted to introduce a new bill to extend the moratorium through 2014 and return money collected since July.

A spokeswoman for the state Department of Community Affairs confirmed earlier this month that the fee is supposed to be collected by towns. She said the department was unable to release an accurate total about how much had been collected since July.

Michael McGuinness, CEO of the commercial and industrial development group NAOIP NJ, said many towns appear to be waiting to collect the fee.

“Towns are aware that the item is being deliberated in the Legislature. They don’t want to collect it and then have to give it back,” McGuinness said, adding that fast action to suspend the fee is still important.

“For us, it’s all about being competitive. There’s renewed interest by companies looking at (locating in) New Jersey again, but this fee doesn’t help a deal come to fruition,” he said.

Singleton, D-7th of Palmyra, also cited economic development as the necessity for freezing the fee.

“Job creation and economic growth is a priority,” he said. “With the state economy continuing to struggle, this is not the time for more fees that can shake business confidence, cost jobs and slow economic development. This is a sensible approach.”

Cohen argued that the money collected from developers would create more jobs through investment in afforda-ble housing.

“We feel the impact of this money going into municipal affordable housing trust funds will do more for the economy, building homes that people need,” he said.