Morristown grappling with shortage of affordable housing

Apr. 9, 2011 Written by ABBOTT KOLOFF Morristown officials told residents at a recent town meeting that the developer of a project including hundreds of apartments along Speedwell Avenue won't be required to build as many affordable housing units as originally proposed, at least not at first. After some residents and council members objected, Mayor Tim Dougherty said he wants to build affordable housing around town in partnerships with with nonprofits. He said the poor economy prevents developer Mill Creek Residential from making more than 5 percent of its units affordable housing in the first phase of the project. The original developer's agreement, in the process of being amended, called for 130 of 650 units to be affordable. Under terms of an amended agreement revealed a week ago, but not yet approved, just 13 affordable apartments would be built in a 268-unit building that would be the project's first phase. The proposal did not address affordable units to be built in later phases. Changes to the Speedwell plan are being made as towns across the state grapple with what to do about affordable housing. Some of the state's Council on Affordable Housing requirements were struck down by an appellate court in a case that will be heard by the state Supreme Court. Meanwhile, legislators and Gov. Chris Christie want new rules that would eliminate COAH altogether. Christie said he favors a proposal that would require 10 percent of newly constructed residential units to be affordable so towns with no growth have no further obligations. Dougherty, acknowledging a need for affordable housing in Morristown, said he wants to build on vacant lots or fix up distressed buildings to revive neighborhoods with the help of nonprofits such as Homeless Solutions and Morris Habitat for Humanity. However, considering available places to build and questionable funding sources, it's not clear how that would make up for a shortfall from Speedwell. Blair Schleicher Bravo, executive director of Morris Habitat for Humanity, said there are few vacant lots in Morristown and, at least compared with areas outside of Morris County, a limited number of distressed buildings. It's also not clear how Dougherty's proposal would be funded. There's been no public discussion about Mill Creek contributing to the town's affordable housing trust fund, where developers place money in lieu of building affordable housing. However, town officials would not rule out any possibility last week. "Everything is being considered," said town redevelopment counsel John Inglesino, adding that he could not discuss ongoing negotiations. Across the state, other towns are dealing with similar issues in different ways: New Brunswick has an agreement with a nonprofit specializing in large developments to get 20 percent affordable units at the Gateway Transit Village, a 14-story building now being built that contains offices, parking and 150 rental units. The city does not have an affordable housing trust fund. "We haven't needed it because we want to go out and have affordable housing built," said Glenn Patterson, New Brunswick's director of planning and development. None of the 650 oceanfront units at Pier Village and Beachfront North in Long Branch are categorized as affordable, although the developer built 40 affordable units in another part of town. Town officials say 300 affordable units were built years ago. A proposal for an additional 200 oceanfront units includes no provision for affordable housing. "If there's a COAH regulation, they will meet it," Howard Wooley Jr., business administrator of Long Branch, said of the developer. Marlboro in Monmouth County probably has the largest affordable housing trust fund in the state, a bankroll of $15 million from previous developments. It has 200 affordable units but another 1,500 in unmet COAH obligations, although 654 of those are part of the case headed for the state Supreme Court. Town officials say they can't even fill the units they have. "We have 10 that aren't occupied," Mayor Jonathan Hornik said. Hornik said the township intends to use money from its trust fund once affordable housing regulations become clear. Too much affordable housing is not a problem in Morristown, where 300 families applied for 12 units in a Homeless Solutions-built complex that opened more than two years ago on Abbett Avenue. Homeless Solutions has built a total of 16 units in Morristown in recent years and plans six apartments on a vacant lot along Martin Luther King Avenue. It also plans to reconstruct a dilapidated two-family house on Abbett Avenue. Homeless Solutions officials say they've used $1.3 million of their own money because other funding has become less available. Habitat for Humanity has built 26 units in Morristown over 25 years, Schleicher Bravo said. She said it costs about $150,000 to build a unit of affordable housing, similar to a COAH estimate for the region. Morristown expects to have $810,000 by the end of the year in its affordable housing trust fund, money paid by developers of other projects. Most of it, $750,000, comes from the developers of the Epstein's project where 10 of 130 rental units are affordable. Another 76 luxury condos already built and 36 proposed include no affordable units. Betsy Hall, executive director of Homeless Solutions, said she's looking forward to working with the town, especially with other funding sources drying up. She also said the town's available trust fund money would not be enough, by itself, to build more than a handful of units. "We could rehab a three- to four-family house with that," she said. However, Schleicher Bravo and Hall both said the money could go further because nonprofits could use it as leverage to get funding from state and federal sources. Schleicher Bravo said she could use $50,000 from the town for a unit and get the rest from other sources. That would mean the town's trust fund money could help build as many as 16 units. Morristown administrator Michael Rogers said the town has no affordable housing obligation under COAH regulations, which are in limbo. However, state officials said the town has an obligation of 307 units, not counting obligations related to the court case. And town officials are not arguing that they don't need more affordable housing. Dougherty, who referred questions to Inglesino last week, said during a recent town hearing that rebuilding distressed homes "brings back neighborhoods." He said his plan would spread affordable housing around the town and not lump it in one area. And he said at least some funding could come from what the town makes from the Speedwell development, without being more specific. The original Speedwell Avenue agreement called for the town to get $7 million from the developer for the sale of the Department of Public Works site. Town officials have negotiated with the developer to sell part of that site, to be used in the first phase of the project, but would not reveal a sale price. Former Morristown Mayor Donald Cresitello, whose administration negotiated the original developer's agreement, said proceeds from the sale belong to the taxpayers. He said the developer should pay a separate amount to make up for lost affordable housing. "We shouldn't be using our money to build affordable housing," Cresitello said. "The $7 million is independent of what the developer is required to pay for affordable housing." During the recent hearing, Councilman James Smith said he was "really disappointed" with the change from 20 percent and councilwoman Raline Smith-Reid said, "It kind of angers me what's happened with affordable housing." Last week, councilwoman Alison Deeb said some constituents have asked her to vote against the proposal because of the affordable housing issue. Councilman Anthony Cattano Jr. was absent during the meeting and did not respond to requests for an interview last week. Council members Michelle Harris-King and Kevin Gsell also did not return phone calls. Councilwoman Rebecca Feldman said she could not comment on the matter because it was part of a contract negotiation. Abbott Koloff: 973-428-6636; [email protected]