Bill would give N.J. developers a moratorium on fees

Developers of commercial and industrial projects in New Jersey would be granted an 18-month moratorium on fees toward affordable housing under a bill advanced by a Senate committee yesterday.

The legislation also would redirect $15 million from the state's long-term debt reduction fund to towns to build the affordable housing units they would normally be obligated to provide when granting approvals for those nonresidential projects.

Under the moratorium, towns would only be obligated to provide those affordable housing units if the state provided the funding.

Sen. Raymond Lesniak (D., Union), the sponsor of the bill and the chairman of the committee that approved it, argued that the changes are needed to respond to the economic recession. Lesniak has said that in a tough economy, the state's complex housing mandates discourage development.

"The 2.5 percent tax is an impediment to our economic recovery," Lesniak said in a statement before opening the Senate Economic Growth Committee's discussion of the bill. "Increasing costs of development to pay for affordable housing based on the number of jobs created damages job creation and is a disincentive to investment in our economy."

"There is much more work to be done," Lesniak added. "Our goal is to provide for the affordable housing needs of our residents in an environmentally sound manner, using well-established principles of smart growth and smart planning, without damaging economic growth and job creation, which not only hurts all our residents but also impedes the development of affordable housing as well."

A long line of supporters, including developers and mayors, rose to speak in favor of the bill, which was not made available until the time of the hearing because of last-minute changes.

Municipal leaders and lawmakers from both parties have been calling for changes to the affordable housing rules, which were developed following the state Supreme Court's

Mount Laurel

rulings. The Supreme Court decisions require towns to ensure that affordable housing is provided.

The Senate Economic Growth Committee approved the Lesniak bill by a vote of 4-0 with one abstention. It heads next to the Senate Budget and Appropriations Committee.

The bill approved included an amendment by Sen. Joseph Kyrillos Jr. (R., Monmouth) to extend the moratorium from 12 months, as originally proposed in the bill discussed yesterday, to 18 months.

Even with the amendment, however, Kyrillos abstained from the vote, saying he would have preferred a broader overhaul of the state's affordable housing rules. For example, he said, he would prefer that the 2.5 percent developer's fee be repealed altogether, a view reflected by several Republican lawmakers. He said he planned to vote for the bill if it reaches the floor of the Senate, however.

Gov. Corzine proposed a one-year moratorium on the 2.5 percent developer's fee for nonresidential development. He signed legislation establishing the fee and making other changes to the state's affordable housing rules in July, before the economic climate soured so dramatically. Lesniak was also a sponsor of that legislation.

Municipal leaders applauded the committee's action yesterday.

William J. Dressel Jr., executive director of the New Jersey State League of Municipalities, said the towns were "delighted with the apparent direction that Sen. Lesniak and the committee are heading."

He said towns were told last spring that the builders' fee would be the "financial lifeline" - the sustained source of revenue that replaced regional contribution agreements - to construct affordable housing.

But because of the economic downturn, the fee has generated very little of the expected revenue in the last few months, he said.

Towns understand economists' arguments to suspend the fee, Dressel said, but they don't want to "foist this obligation onto local property taxpayers."

Evesham Mayor Randy Brown was among those who testified yesterday in favor of the bill.

"The commercial building has ground to a halt in New Jersey," Brown said. "Hopefully, this moratorium will allow us to jump-start building and create jobs."

Evesham, Burlington County's most populous town, had complied with its obligations in the first and second rounds of the state's affordable housing requirements, Brown said, when it was hit with an "unfair, unacceptable number" in the latest round.

Evesham consequently backed away from a proposal for a 300,000-square-foot retail center that would have been assessed at $50 million because if it were built, the new Council on Affordable Housing rules also would have required taxpayers to pay more than $5 million to construct affordable housing.

"Evesham has always been a proponent of affordable housing," Brown said. "But municipalities should not bear the burden. It's got to be paid for by the state."

The Council on Affordable Housing has called for 115,000 units of affordable housing to be built by 2018. The plan came after nearly a decade of legal challenges and other setbacks.

But housing advocates worry that the state is backing away from affordable housing at the wrong time.

Kevin Walsh, associate director for the Fair Share Housing Center, based in Cherry Hill, said he does not think that the $15 million appropriation from the state will cover the fees that developers would have paid.

"I think it's unfortunate that they're cutting funding for housing that people can afford at a time when the need for it is increasing," Walsh said. "This issue has been going on now for about 10 years, and it's not helping matters to try to take resources away at this point."