The Affordable Housing Mandate and Its Impact on our Community
By Mark A. Corigliano, Councilman and COAH Coordinator
Borough of Peapack & Gladstone
May 1, 2016
This article was not my idea. It was prompted by a very similar article written by the Township Administrator of Branchburg, Gregory Bonin. Mr. Bonin circulated his article to other municipalities with a most generous offer to use it and distribute it. After seeing this excellent article, I thought it a good idea to compose a similar version for the benefit of our residents and property owners. My article draws from Mr. Bonin’s article and I am grateful not only for his inspiration but also for his sharing. It also draws from some well-developed history by our Borough’s planner, John Szabo.
The mandates placed on the Borough of Peapack & Gladstone by the Council on Affordable Housing (COAH) and subsequent court rulings related to COAH are perhaps, along with budgeting and finance, the most important issue your elected officials have had to deal with in the past few years. The impact of COAH mandates on our Borough has had and will continue to have a large effect on the nature of our town and its character for years to come.
Like most neighboring municipalities, Peapack & Gladstone must address the issues of Affordable Housing. It is the obligation of your Borough, as mandated by State law, to provide housing for residents of low and moderate income. Not only has this been an ongoing obligation, but going forward this mandate is likely to grow and grow far beyond what may have been originally envisioned for our community.
There is a long and rocky history in New Jersey, Somerset County and our Borough in regards to the affordable housing obligation. While this simple documents cannot provide a complete analysis of how the issue of affordable housing arrived at where it is today, it will try to explain some of the complexities and the Borough’s potential obligation in the future. However, know that your elected officials are doing their best, in concert with other neighboring municipalities, to best absorb the impact of COAH to the extent possible.
The affordable housing, or "Mt. Laurel" obligation came into being as a result of a 1975 constitutional decision by the N.J. Supreme Court involving the Township of Mt. Laurel. In 1983, the Supreme Court, displeased with progress under its earlier decision, assigned implementation of affordable housing obligations to the courts. Although the Supreme Court acknowledged that courts are not well equipped to function as an administrative agency, the Supreme Court found that there was no other agency available to take on the task.
After the Supreme Court’s decision, the State Legislature passed the Fair Housing Act (FHA) in 1985. This legislation was subsequently affirmed by the Supreme Court as a suitable mechanism to implement affordable housing requirements. The FHA provided for the State to establish the NJ Council on Affordable Housing (COAH) as an Agency to set rules and administer affordable housing obligations. These obligations included such important factors as how many affordable housing units each town must create during specific time periods or “rounds” and the methodology to be used in creating such living units.
The first round of implementation of Mt. Laurel began in 1987 and ended in 1993. The Borough of Peapack & Gladstone satisfied the requirements for this round and was granted substantive certification on January 9, 1989.
The second round began in 1993 and expired in 1999. Upon COAH’s adoption of the Second Round rules, the Borough prepared and adopted a Second Round Plan on March 21, 1995 to address a pre-credit need for ninety-four (94) affordable housing units along with a rehabilitation component of ten (10) units. The Borough’s Second Round plan provided for its fair share of affordable housing units while maintaining the character of the community as follows:
- The Borough was determined to have a “Rehabilitation Component” need of ten (10) units. All ten (10) units were rehabilitated.
- The “New Construction” or “Prospective Need” component of eighty-four (84) units was addressed by a Regional Contribution Agreement (RCA) with the City of Perth Amboy for 37 units at a cost of $740,000
- It was also met by the construction of twenty (20) affordable rental units by Lutheran Social Ministries. This complex at the corner of Main Street and Holland Avenue, known as Hamilton Court, resulted in a total credit of 38 units (20 constructed and an 18 unit bonus credit)
- And the construction of nine (9) units in the St. Luke’s Village project. This development is located on Main St across from St. Luke’s Church.
Upon adoption of the Second Round Plan in 1995, the Borough took measures to implement its Plan by adopting: i) an Affirmative Marketing Plan; ii) an ordinance amending its zoning to permit affordable rental housing; and iii) an ordinance to establish a Development Fee to create a housing trust fund. Your Borough was granted Second Round substantive certification on January 10, 1996.
After the end of the second round, COAH embarked on a series of policy and program changes that would be implemented in the third round of affordable housing. Until these rules were approved, municipalities were stalled from implementing any further affordable housing developments. After much delay, third round rules were finally ratified in late 2004. The Borough’s “prospective need” obligation of thirty-five (35) units was adopted in a Housing Plan Element and Fair Share Plan dated November 25, 2005. This plan proposed to build these units at the end of Apgar Avenue on a site known as the Smith tract, a 3.2 acre parcel adjacent to what is now Komline Park.
However, there were multiple challenges to the 2004 regulations and over the following years because they included confusing and contradictory rules and methods for towns to follow as they made plans to comply with third round obligations. Little was accomplished as our municipality expended funds and effort in its best effort to comply as needed. The Borough ultimately adopted a revised Plan on November 20, 2008. The 2008 revised plan increased the Third Round obligation from thirty-five (35) to thirty-seven (37) units. It also provided for a Borough-sponsored rental project of twenty (20) affordable family units on the remaining portion of the Smith tract. This plan received COAH certification in 2009. Significantly, Peapack & Gladstone was one of only sixty-eight municipalities in the State to receive certification. However, these exercises were seemingly for naught.
With the election of Governor Chris Christie, matters took a further turn for the worse as his administration looked to dismantle COAH. Like some others, he blamed the affordable housing mandate as a primary reason for high taxes in our State. He initiated a series of steps to abolish or reduce the role of COAH, including not making appointments to the COAH Board, transferring COAH's powers to the State Department of Community Affairs and vetoing legislation, all in an effort to change both COAH and the affordable housing process. He offered no alternative plan to address the Mt. Laurel requirements of the Supreme Court.
Frustrated with the lack of progress, the Supreme Court issued multiple deadlines for COAH to comply with the requirement to issue constitutionally compliant third round rules. The agency, or what was left of it, at times issued arcane instructions and rules, but for the most part missed the court imposed deadlines.
In response to demands by advocates for affordable housing, the Supreme Court issued a ruling that became effective June 8, 2015. The ruling required every town participating in the affordable housing process to file with the courts a "Declaratory Judgment" (DJ) action by July 8, 2015. A DJ is a court proceeding that a town initiates that says to the courts that the Borough is preparing to comply with the mandates of FHA. Further, it affords protection from expensive “builders’ remedy” lawsuits, to which the Borough might be exposed. Peapack & Gladstone met this deadline and was therefore protected from developer lawsuits for a period of five months. This protection was subsequently extended into mid-2016.
The Borough would be fully protected from builder’s remedy lawsuits going forward so long as it files a “constitutionally compliant" housing plan. However, like past COAH rounds, the Courts did not provide rules or methodologies. There have been two studies to identify the COAH obligations of NJ municipalities, one by an advocate of affordable housing and a second commissioned by a consortium of municipalities. Despite these, the number of third round units required in our Borough is still not known. Some have quoted an unlikely low of approximately 40 units to as high as nearly 200 units to be constructed through 2025. We are concerned that advocates of affordable housing have vastly overstated the need in our area, construction of which would irreversibly change the nature of our Borough.
The Borough is still unsure of how the courts will allow us to construct a compliant housing plan. We are also unsure of the actual number of affordable housing and market units that must be built. And we are unsure of the burden that the to-be-determined round three COAH obligation will have on either the Borough’s finances or the bucolic nature of the town that we all treasure.
The Borough Council, the Land Use Board and our professionals including our attorneys and planner have been following the COAH situation and affordable housing issues closely. We have joined with other municipalities to address the Courts to work towards a fair and reasonable solution to this important issue so as to avoid an arbitrary obligation being assigned to us.
The Peapack & Gladstone Borough Council continues to grapple with the issues thrown upon New Jersey municipalities as we develop our affordable housing plan. We seek to develop a plan that, as best as possible, maintains the current quality of life and culture of our community while also recognizing the inevitability that the building of affordable housing is a mandate that we must plan for and realize in some capacity.
Any member of the governing body or administration remains available to our residents and property owners to discuss these matters at any time. Please do not hesitate to visit with us or contact us via e-mail (addresses shown on the website). We will address your questions as best we can.