Published June 27, 2012
By David Levinsky

TRENTON — A bill that would permit towns and the state to buy foreclosed homes for affordable housing was approved by the Legislature on Monday, but its prospects of becoming law are slim, according to the leader of a conservative group that opposed the measure.

“We’re pretty confident the governor will veto it,” said Steven Lonegan, director of the New Jersey chapter of Americans for Prosperity.

The group organized a letter- and email-writing campaign against the bill and also aired radio and television advertisements that blasted the measure as one that would increase crime and reduce home values.

The bill, known as the Foreclosure Transformation Act, would create a temporary entity called the New Jersey Foreclosure Relief Corp. that would buy foreclosed or vacant properties and deed-restrict them as affordable units.

Under the measure, towns would have the right of first refusal to buy homes or contribute some of their unused Affordable Housing Trust Fund money to the purchases. Towns that do would receive a two-for-one credit toward their affordable housing obligation.

If a town declines to purchase a property, the corporation could buy it and restrict it as affordable housing.

Supporters of the measure say buying foreclosed homes would help relieve blight that drives down housing values in the community and hurts the state’s economy.

They note that more than 100,000 homeowners across the state are dealing with foreclosures.

Across Burlington County, an estimated one out of every 1,909 homes is in foreclosure, putting it in the top 10 of New Jersey’s 21 counties, according to RealtyTrac.com, and foreclosure rates in Willingboro and Pemberton Township are among the worst in the state.

“When numerous properties in a neighborhood remain vacant for a prolonged period, there is a heightened risk of blight,” said Assemblyman Troy Singleton, D-7th of Palmyra, a co-sponsor of the measure. “This innovative proposal would address two of the most pressing problems we face during this economic recovery.”

Lonegan countered that the bill would empower the state to borrow millions without voter approval and permit state government to interfere with the housing market.

“It’s destructive to our neighborhoods,” he said.

The majority of the Legislature disagreed, although the margin of the bill’s passage was slim.

It passed the Assembly by a 45-33 vote and the Senate by 21-18. No Republicans voted for the measure.

Nina Arce, spokeswoman for the Housing and Community Development Network of New Jersey, said the group delivered a letter to Christie last month from 50 organizations urging him to support foreclosure remedies, including the Foreclosure Transformation Act.

“We don’t have a crystal ball that can predict what the governor is going to do, but we’re hopeful he’ll see it for what it is — a good option for municipalities to deal with abandoned and vacant properties,” Arce said.

Opponents like Lonegan have not proposed any solution of their own for the thousands of foreclosed or vacant homes in the state, she added.

“We need to do something about these properties that are bringing down the value of the homes around them,” Arce said.

Lonegan said the solution isn’t government involvement.

“The last thing New Jersey needs is government intervening in the housing market,” he said.