Published December 19, 2013
By Sal Rizzo

TRENTON — The state Assembly approved a bill today that would give land developers a financial break at the expense of affordable housing funds.

The bill would freeze a 2.5 percent fee that developers pay for building shopping malls or industrial projects in New Jersey — anything but housing.

The measure (A4457) passed 78 to 0 today with no floor debate. An identical bill is pending in the state Senate.

The bill sponsor, Assemblyman John Burzichelli (D-Gloucester), said it doesn't make sense to charge commercial developers the fee while New Jersey's affordable housing system remains in limbo.

Housing advocates oppose the bill, saying there is no strong evidence that freezing the fee in previous years led more businesses to New Jersey.

They add that the New Jersey Supreme Court recently ordered state officials to straighten out the affordable-housing program by Feb. 26 so that towns can restart construction. If the bill becomes law, advocates say, towns may have to raise property taxes to meet their constitutional obligation to provide homes for their poorest residents.

The developer fee was designed to fund state or municipal affordable-housing trust funds, but lawmakers have frozen it throughout most of the last five years in an effort to spur economic activity.

Waiving the developer fee for another year could spur job creation if it brings new shops or businesses, Burzichelli said. The bill is also sponsored by South Jersey Democrats and Minority Leader Jon Bramnick (R-Union).

"It came down to the fact that the fees being collected weren't being used for what their intended purpose was," Burzichelli said. "Holding commercial development hostage, for a purpose that didn't seem to be fulfilled, didn't seem to be prudent."

Assemblywoman BettyLou DeCroce (R-Morris), another sponsor, said in a statement that "the building industry is one of New Jersey's key economic drivers as it creates jobs and facilitates commerce."

"Many jobs are created both directly and indirectly due to the building industry, such as suppliers, retailers, financial institutions and real estate," DeCroce said.

The waiver would cover construction projects from July 1, 2013, to the end of 2014. Towns that already spent the proceeds on affordable housing units would not be required to give refunds.

Arnold Cohen, senior policy coordinator of the Housing and Community Development Network of New Jersey, wrote to legislators recently asking them to oppose the bill.

"Developers locate in New Jersey because it a good place for their business," Cohen wrote. "The fee is a small price of the cost of doing business here. It is an investment in our state's residents and its future."

Mayors across the state have quarreled for years with the state agency in charge of overseeing the affordable housing program, and construction has largely ground to a halt over the last decade amid court battles.

The state Supreme Court ruled in September that after years of delays in New Jersey's program to build affordable homes, state officials had to get back to work. The court gave Gov. Chris Christie and state officials until Feb. 26 to write new regulations for the program, but the administration already is being sued for failing to meet the first deadlines.

"A remedy must be put in place to eliminate the limbo in which municipalities, New Jersey citizens, developers, and affordable housing interest groups have lived for too long," Justice Jaynee LaVecchia wrote for the court in September.

A representative from the state League of Municipalities said it has no position on the bill.