Borough Council Ready to Review Housing Requirement

Matthew Hersh

Borough Council was expected to introduce an affordable housing ordinance Tuesday night at its regular session, following a report on the town's growth share obligation.

The New Jersey Council on Affordable Housing's (COAH) new "third round" policy presents a clear departure from "Mount Laurel II," which calculated municipal housing requirements by population, employment, and economic conditions. The new regulations also, as expected, place a hefty burden on the Borough to comply with requirements that call for nearly 100 affordable units in the next decade.

The Council session took place after Town Topics went to press.

Under the new regulations put forth by COAH, one affordable unit must be provided for every eight, market rate, residential units. The non-residential component of the rules stipulates that for every 25 jobs created, one affordable unit needs to be created. To determine how many jobs are created, COAH provides a formula based on square-footage. Zoning also plays a factor in determining the number of actual units allowed under a certain project.

This past Thursday, as the Borough Affordable Housing Board considered signing off on a final draft of the ordinance to be sent to Borough Council for review, Derek Bridger, Borough affordable housing coordinator, said the municipality has "basically calculated" its obligation to be a total of 96 units over the next 10 years. That number, he added, was based on current development trends, both residential and non-residential.

When COAH published its legislation for the new mandates in August 2004, it offered municipalities little guidance regarding how to fund the increase other than raising developer fees on residential properties from half of one percent of the added assessment to one percent, and from one percent to two percent on non-residential properties.

Current developer fees in the Borough typically bring in between $75,000 and $100,000 annually, according to Mr. Bridger. "It's not a great generator of cash, even with the increased level they're allowing us to charge.

"It's still not going to be enough for us to build 100 units of affordable housing."

As such, the goal was to "capture" the non-residential growth share. If a developer builds a building, that will equal a specific number of affordable units.

The result was the crafting of an ordinance that would, if passed by Borough Council with an October 25 final vote, assess a fee against non-residential growth.

Under the proposed ordinance, developers are given several methods to fulfill the obligation: construct units on site ; construct units off site; or finance the Borough in lieu of building units based on a proportionate share of total cost. The latter, according to Mr. Bridger, would be difficult for the municipality because of its lack of land.

Another option for the developer would be to donate land to the Borough, a model mirrored in April by Research Director of the National Housing Institute Alan Mallach at an affordable housing panel discussion hosted by Princeton Community Housing (PCH). Developers, under that scenario, could deed out land to the municipality to create room for more units.

That option could be the most sensible, Mr. Mallach said, as census forecasts do not indicate a significant increase in Borough population over the next 10 years. The town's affordable housing requirement, however, is expected to increase significantly.

Another challenge for the Princetons, namely for built-out communities like the Borough, is the burden the obligations pose when it comes to large institutions and businesses that are, as growing entities, significant developers. These institutions include Princeton University, whose development plans include the 210,000-square-foot Whitman College, and the 87,000-square-foot Peter B. Lewis science library, both currently under construction. Those projects alone are expected to create upwards of 400 jobs.

However, one of the University's chief gripes with the new COAH regulations is that while some of the new structures may take up significant land, the jobs generated fall well under the number in the COAH formula.

That issue in particular was also addressed in the PCH discussion. A "clean" University lab of 4,000 square feet could be empty most of the time, according to University officials.

During the April discussion, Pam Hersh, director of the University's Office of Community and State Affairs, pointed out that "there are buildings on our campus — that when categorized as a regular office building under the COAH regulations would produce 200 employees — that, in fact, would produce one new employee. The Borough can't possibly accommodate that kind of affordable housing growth based on the type of square-footage we're building," At that point, COAH lawyer Melissa Orson had said that changes could be made if the situation were reconsidered, but that the state needs to maintain "consistency" when it comes to the requirements.

But from the Borough's standpoint, the COAH mandates create the monumental challenge of supplying adequate affordable housing with little state oversight as to how to fund it.

The Borough's ordinance introduction was slated to follow a report supplied by Shirley Bishop, an affordable housing consultant.