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Planner forecasts more, costlier affordable housing
Planner says twp. will have to build 200+ more units
BY JAMIE ROMM Staff Writer
Meeting the township's future affordablehousing obligation is likely to be more costly and require new types of development, Middletown Township's planner said last week.
According to Anthony Mercantante, estimates put the number of affordable-housing units the township will have to provide to meet state affordable housing goals at around 228 units, a number that may strain finances.
"With a minimum of 228 units to be built, the total could cause a $15 [million] to $16 million debt," Mercantante said. "We don't generate that kind of money … we'd have to bond. Is it worth going into $16 million in debt?"
At a special meeting of the Middletown Township Planning Board Nov. 28, Mercantante presented the board with an update on the issues involved in the state's Council on Affordable Housing (COAH) regulations.
Mercantante said the latest significant amendments to affordable-housing rules occurred in 2000 and 2003 when many of the current members were not on the Planning Board.
"The purpose of why we are having this meeting is to have a kind of workshop with the board over affordable housing," Mercantante said. "I hope that this will lead to a good discussion."
Mercantante told the board the cost of constructing units of affordable housing has risen.
The cost initially was $15,000, he said, then rose to $20,000 and currently is $35,000 per unit.
He predicts that the price will rise to between $45,000 and $50,000 per unit.
Affordable housing, as defined by COAH, is housing that is sold or rented at below-market rates to people who have an income that qualifies under regional income guidelines set by the state.
The main topic of discussion was the third round of COAH regulations, a hot issue at the beginning of the year.
On Jan. 25, an Appellate Court threw the state's latest round of affordable-housing rules out the window, which means that many local officials who were planning how their towns would provide affordable housing through 2014 would have to rethink the way they were going to do that.
COAH dates to the 1980s, and the council's regulations have already provided affordable housing in municipalities through two previous rounds.
Third-round regulations required municipalities to construct one affordable-housing unit for every eight-market units constructed, and one affordable housing unit for every 25 jobs created.
The third-round rules are scheduled to be discussed again by COAH on Dec. 17, and township planners are working on a plan should the rules change.
Middletown implemented its first housing plan in 1994. At that time the township had an obligation to provide 1,950 units of affordable housing, one of the highest quotas in the state, according to Mercantante.
"At the time, legislation was enacted to establish a 1,000-unit cap," Mercantante said.
"Townships had no obligation past the 1,000 cap. If you had 999, then you were stuck with 999."
The goal at the time, according to Mercantante, was to have the township's plan certified by COAH so that process would provide an umbrella of protection against builder remedy lawsuits.
"That's why most municipalities participate in this process," Mercantante said.
Housing plans run in six-year cycles, and Middletown's plan ended in March 2000.
According to Mercantante, the township submitted a plan for Middletown's obligation for housing, which were 1,655 units.
At that time, amendments were made to COAH rules, and Mercantante said Middletown's housing plan wasn't reviewed until 2005.
"It is important to know that Middletown, throughout the five-year waiting process, continually implemented the majority of its plan," Mercantante said. "We did everything we could to work with people to create affordable housing."
In 2005, COAH set the third round of affordable housing requirements for municipalities in what Mercantante described as a "build affordable housing as you grow" approach.
Now the units of affordable housing were not assigned by the state but were formulated using a "growth share" approach.
"From a planning aspect, the growth share process makes a lot of sense," Mercantante said. "It would help a municipality to better gauge their natural growth potential."
Growth now would come with an obligation attached to it to build affordable housing.
In 2006, Middletown had to submit a new third-round housing plan that would calculate growth over the next 10 years and assign a number of units. The plan was to be reviewed over a 60-day period, but due to a lawsuit brought against COAH at the time the review took almost a year.
As a result of the lawsuit, the Appellate Division of the state Superior Court decided Aug. 15 that a regional contribution agreement (RCA), which would allow Colts Neck Township to transfer its affordable-housing obligation to the city of Long Branch, did not comply with state regulations, according to an attorney with the nonprofit law firm that challenged the agreement.
Though growth share rules were not invalidated, it was found that there was inadequate data that would support COAH regulations, according to Mercantante.
COAH would then have to amend regulations that will be presented at the meeting on Dec. 17.
Mercantante said that he was confident of a few things coming out of that meeting.
For one, the estimated number of affordable housing units the township will have to build is about 228, although he said he thinks the number will be higher.
"Two hundred twenty-eight is just our estimate," Mercantante said. "We know that in all municipalities that the number will be higher and that it will not be going down."
Judith Stanley Coleman, chairwoman of the Middletown Planning Board, wanted to know how these housing units would be distributed.
"You just can't keep building and building," Coleman said. "There will come a point where there is just no more room."
She also talked about the traffic that would result and that Middletown may even turn into a city-like area.
"They are more worried about affordable housing," Mercantante said to Coleman. "They are not going to worry about traffic."
Mercantante also said that another issue that would be discussed Dec. 17 would be the legality of RCAs.
An RCA is an agreement between two towns in which one town pays another town to assume a portion of its affordable-housing obligation.
Under an RCA, a sending community may transfer up to half of its share of affordable housing units to a receiving community as long as it is within the same housing region.
Middletown currently has RCAs with Long Branch, Red Bank and Asbury Park.
"Suburbs can transfer to other suburbs," Mercantante said. "Basically, we have placed affordable housing in those areas."
One such area is Red Bank, where RCAs have funded 25 rental units at Locust Landing.
Middletown has used RCAs more than any municipality, he said, sending $12.1 million to other municipalities to handle 649 of its affordable-housing credits that would otherwise have been built in the township.
In 2008, Middletown will be adopting a new housing plan that has elements of the township's master plan.
Though the plan is not finalized and will need further discussion by the Planning Board, parts of the plan may include the use of mixed overlay buildings where affordable housing is built over businesses.
"Mixed overlay could be something we have to look into," Planning Board member Cliff Raisch said. "It may be a possible solution."
The 2008 plan would be discussed further at the Planning Board's December meeting and then finalized in January after which there would be a 45-day period for appeals.
"In Middletown we have satisfied 85 percent of our obligations," Mercantante said. "This is significant compared to other municipalities."
With Middletown running low on space to build affordable housing, the township has had to come up with new ideas of where to place this housing.
"You have to start building up or out," Mercantante said. We're going to start having building up."
A common concern with affordable housing is that there will be a substantial number of children moving in, adding to the school population, according to Mercantante.
He said that in fact that is not true. For every six houses families moved into, there is only one child.
"We currently have around 23,000 housing units," Mercantante said. "In fact in those homes, there are only a total of about 11,000 children."
At the Township Committee's Dec. 3 meeting a resolution was discussed to urge the Legislature to preserve RCAs as "a technique available to address the need for affordable housing."
Mercantante and members of the Planning Board agreed that meetings such as these should be held more often and a meeting may be held in January to discuss the Dec. 17 COAH decisions and other issues regarding affordable housing.
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