A Fresh Look at Affordable Housing

December 19th, 2007 by Chris Sturm

30 percent – The maximum percentage of gross income a household should pay to cover its housing costs and still generally be considered living in an affordable housing situation.
1.27 million – The number of households in New Jersey that pay more than this amount for their housing costs. This is 41 percent of all households in the state. Assembly Speaker Joseph Roberts (D-Camden) has proposed a 12-point package of bills that would substantially alter New Jersey’s affordable-housing policies.
Affordable housing, not only for those of low and moderate income but for middle-income residents as well, is critical to the state’s economic health.
New Jersey cannot achieve long-term prosperity as long as low-income affordable housing and poverty are concentrated in our urban areas.

Five Proposals to Watch

Assembly Speaker Roberts’ package of bills takes on many aspects of the affordable-housing challenge in the state and could substantially alter New Jersey’s affordable-housing policies.

One of the key components in the package is the elimination of Regional Contribution Agreements (RCAs), a position long supported by New Jersey Future. RCAs, under regulations adopted by the Council on Affordable Housing (COAH), enable a municipality (almost always a more prosperous suburban community) to “send” up to 50 percent of its affordable housing obligation to a “receiving” municipality.

While RCAs provide an easy way for suburban municipalities to fulfill their affordable-housing obligation, and for cities to improve their housing stock, they are ultimately bad for New Jersey because they further disconnect affordable housing (and the people living there) from desirable places of employment. In fact, between 1990 and 2003, the 120 communities that sent RCAs gained 133,000 jobs collectively, while in contrast the 53 receiving municipalities lost a combined 3,600 jobs over the same period.

Another bill in the reform package calls for amending the school funding formula to increase state funding for schools with low- and moderate-income students. This is a step in the right direction toward removing one of the biggest obstacles to the provision of affordable housing: local concern about the cost of educating new schoolchildren. A new formula that takes the added cost into consideration will encourage municipalities to plan and zone for housing for all types of users, including families.

Three additional proposals in the package merit support. The first would require towns to spend municipal housing trust fund dollars on affordable housing within their borders. The second would make permanent the housing task force established by Department of Community Affairs Commissioner Joe Doria, and charge it with developing a comprehensive statewide housing plan with annual reports. The third would require regular publication of affordable-housing statistics. Together, these steps would tell us where we are, and chart a path toward where we want to go, in providing affordable housing in all four corners of the Garden State.

In sum, affordable housing is critical to New Jersey’s prosperity, and we applaud the state’s renewed attention to the issue. Moving forward, it will be necessary to coordinate these legislative initiatives with the work being done by the Department of Community Affairs and COAH to make sure that, together, they constitute a unified strategy for achieving the goals articulated in the original Mount Laurel court decisions.

If you have any questions about this issue of Future Facts, please contact Chris Sturm, Senior Director of State Policy.