Mayor: End of RCAs 'a disaster' for Mid'town Scharfenberger will work with other towns on plan of action BY JAMIE ROMM Staff Writer Middletown Mayor Gerard Scharfenberger reacted strongly this week to the passage of legislation that spells an end to the township's use of Regional Contribution Agreements (RCA) to help fulfill its affordable housing obligation. Gerard Scharfenberger "I can't overstate how damaging this is going to be to Middletown," Scharfenberger said Monday. "It's a disaster." Scharfenberger said he would not take the Legislature's decision to end RCAs lying down. According to Scharfenberger, he, along with officials from surrounding municipalities, will hold a press conference to announce a "plan of action" in response to the legislation. With the passage of bills in both the Assembly and Senate, municipalities like Middletown will have to look within their boundaries to build affordable housing. The Senate approved S-1783 on June 23, eliminating RCAs, an option used by municipalities to satisfy their affordable housing quotas mandated by the state Council on Affordable Housing. Middletown Township Administrator Anthony Mercantante said last week that Middletown, which has sent $12.1 million in RCAs to other municipalities to handle 649 of its affordable housing credits, would now have to look solely within the township to fulfill its affordable housing obligation. "We were able to [satisfy] up to 50 percent of our obligations with RCAs," Mercantante said. "Of course now we will have to look in the township. We will have to look at areas that were not considered before." On June 16 the Assembly voted 45-33 in favor of an identical bill, A-500, the Affordable Housing Bill. Both bills eliminate RCAs as a method to address affordable housing needs under the Fair Housing Act. According to the bills, the transfer of affordable housing units from one municipality to another is not consistent with the intent of the Mount Laurel doctrine. The New Jersey Supreme Court, in its Mount Laurel decisions, ruled that every municipality must provide a realistic opportunity through local zoning to accommodate its fair share of low- and moderate-income housing. The state's Fair Housing Act of 1985 established the Council on Affordable Housing (COAH) to calculate housing need, assign affordable housing obligations and make sure local governments meet those obligations. Middletown Township officials have been vocal critics of state-mandated affordable housing quotas over the past year on the importance of RCAs and the township's use. "I just don't see where we are going to place these homes," Scharfenberger said Monday. "It's a 4-to-1 ratio of homes to affordable housing, which means we'd have to build an additional 8,000 homes just to satisfy our obligation. It's going to place a burden on our town." Middletown currently has RCAs with Long Branch, Red Bank and Asbury Park. Towns receiving RCA funds view the transfers as beneficial. Two of the RCAs Middletown has with Red Bank have produced senior citizen housing at the River Street school as well as an affordable housing development called Locust Landing, according to Red Bank's COAH representative, John Gurzo. "As far as Red Bank is concerned, it's [RCAs] been a good thing," Gurzo said. "The three RCAs that we've had in the past years have helped to benefit Red Bank." Red Bank entered into the RCAs as a "receiving" municipality and Middletown as a "sending" municipality, pursuant to the rules and regulations set forth by COAH. In addition to the two RCAs with Middletown, Red Bank has a third RCA with Manalapan Township, another "sending" municipality, for $2 million to rehabilitate about 98 owner-occupied single-family homes, said Gurzo. "We wouldn't be able to do that [rehabilitate almost 100 properties] if it weren't for that [RCA]," he said. The Red Bank Council passed a resolution at the June 23 Borough Council meeting urging the governor and state legislators not to pass the bills eliminating RCAs. "The new COAH regulations I think hurt municipalities, and that is one of the reasons I had proffered the resolution," said Red Bank Councilman Michael DuPont, who submitted the resolution to the council. He added, "The new COAH regulations, I do not think, promote the creation of affordable housing or assist municipalities in the creation of affordable housing." Under COAH requirements, Red Bank has an affordable housing obligation of 575 units that have to be built by 2018. Middletown has an affordable housing obligation of 2,160 units that have to be built by 2018. Gov. Jon Corzine is expected to sign the legislation. The bills have been supported by the New Jersey Regional Coalition, a faith-based group that works with a "tradition of grassroots and faith-based community organizing," according to a press release from the group. "We've seen the effects of RCAs," Rebecca Mitchell, a founding NJRC member said in the release. "They cause concentration of poverty and racial segregation, and deny people the opportunity to choose where they want to live and send their children to school." The coalition welcomes the end of RCAs and takes credit for having played a major part in the passage of the bills. "The fact that NJRC is a regional grassroots and faith-based organization made all the difference in this effort," said the Rev. R. Lenton Buffalo Jr., pastor of Union Baptist Church in Elizabeth. "It was the regional impact and influence of NJRC that made this victory possible." The new bills also establish minimum numbers of housing units required to be set aside for "very low-income persons" under the FHA. In addition, a requirement for redevelopment projects is established so that low- and moderate-income housing units, which are eliminated as a result of such activities, are replaced with comparable housing, on a onefor one basis. Mercantante said that he believes that there is a philosophical difference around the issue of RCAs. "There is a viewpoint that RCAs are amoral," Mercantante said. "There is a lot of misunderstanding of how they benefit both municipalities." The bills create a new qualifying threshold for middle-income households with a gross household income equal to, or more than 80 percent but less than 110 percent, of the median gross household income for households of the same size within the housing region in which the household is located. "These households represent 'work force' households, which have been squeezed out of affordable housing because of income guidelines and costs assessed to build market rate housing, but are households, which very much need affordable housing in order to keep New Jersey's neighborhoods sustainable and its economy vital," the bills state. The bills provide a five-year phase-in of housing reserved for such households. The bills creates a Housing Rehabilitation and Assistance Program that will be funded by a $20 million annual appropriation from the state portion of the realty transfer fee collections. The program will assist urban aid municipalities in the rehabilitation of existing housing stock. Mercantante said that while the focus has been on sending towns, the new legislation will also have an effect on the towns that have been receiving RCAs. "We have done RCAs in the past and we had planned on doing more RCAs," Mercantante said. "There is a smaller likelihood, in receiving funds for the projects, that these communities need to do [that] now they are going to have to compete for state funds. While Mercantante said he appreciates the fact that the $20 million is being made available, in a perfect world RCAs and the funds would both be available. "I wish we could have both," Mercantante said. "The way they are doling out the funds, there is no way they will have enough money. While some would receive the funds, there will be many who won't." The bill requires state agencies, when promulgating rules, to include a housing affordability impact statement and a smart growth development impact statement with the rule publication. These statements will describe how the proposed rule will affect the availability and price of housing, and impact on new construction. The bill establishes a State Housing Commission to develop a strategic housing plan for New Jersey, as well as prepare an annual housing performance report. The commission will be comprised of 13 public members, of which 11 will be appointed by the governor and two by the Legislature. In addition, the commission will include several state department heads as nonvoting members. The new bills also establish minimum numbers of housing units required to be set aside for "very low-income persons" under the FHA. In addition, a requirement for redevelopment projects is established so that low- and moderate-income housing units, which are eliminated as a result of such activities, are replaced with comparable housing, on a onefor one basis. Mercantante said that he believes that there is a philosophical difference around the issue of RCAs. "There is a viewpoint that RCAs are amoral," Mercantante said. "There is a lot of misunderstanding of how they benefit both municipalities." The bills create a new qualifying threshold for middle-income households with a gross household income equal to or more than 80 percent but less than 110 percent, of the median gross household income for households of the same size within the housing region in which the household is located. "These households represent 'work force' households, which have been squeezed out of affordable housing because of income guidelines and costs assessed to build market rate housing, but are households which very much need affordable housing in order to keep New Jersey's neighborhoods sustainable and its economy vital," the bills state. The bills provide a five-year phase-in of housing reserved for such households. The bills create a Housing Rehabilitation and Assistance Program that will be funded by a $20 million annual appropriation from the state portion of the realty transfer fee collections. The program will assist urban aid municipalities in the rehabilitation of existing housing stock. Mercantante said that while the focus has been on the sending towns, the new legislation will also have an effect on the towns that have been receiving RCAs. "We have done RCAs in the past and we had planned on doing more RCAs," Mercantante said. "There is a smaller likelihood, in receiving funds for the projects, that these communities need to do [that] now they are going to have to compete for state funds. While Mercantante said he appreciates the fact that the $20 million is being made available, in a perfect world, RCAs and the funds would both be available. "I wish we could have both," Mercantante said. "The way they are doling out the funds, there is no way they will have enough money. While some would receive the funds, there will be many who won't." The bill requires state agencies, when promulgating rules, to include a housing affordability impact statement and a smart growth development impact statement with the rule publication. These statements will describe how the proposed rule will affect the availability and price of housing, and impact on new construction. The bill establishes a State Housing Commission to develop a strategic housing plan for New Jersey, as well as prepare an annual housing performance report. The commission will be composed of 13 public members, of which 11 will be appointed by the governor and two by the Legislature. In addition, the commission will include several state department heads as nonvoting members. Greater Media staff writer Melissa Karsh contributed to this story. Jamie Romm can be reached at jromm@gmnews.com