Affordable Housing Bill Advances (Updates)

The New Jersey Chapter of the American Planning Association (“APA New Jersey”) has been working on behalf of its members since late December when major legislation regarding affordable housing obligations was introduced during the Legislature’s lame-duck session. The Chapter initially opposed the bill due to the timing and the fact that all stakeholders did not have sufficient time to review and analyze the 70+ page bill and its impacts. Fortunately, the bill was not voted on but was reintroduced immediately in the new legislative session.

Resources:


APA New Jersey’s Position Statement

After receiving comments from members and having numerous discussions with allied professionals, the Chapter has focused on two major areas to improve the legislation: creating a direct tie to the State Development and Redevelopment Plan and updating the proposed methodology.

APA New Jersey President Charles Latini testified before the Senate Urban Affairs Committee, and most recently, the Chapter’s Leadership and Housing Committee met with Senator Troy Singleton, one of the primary sponsors of the bill, to further advocate for amendments.

The bill will have its next hearing at the Assembly Appropriations Committee on Thursday, February 8th, at 11:00 am in Trenton.


#1 – The State Development and Redevelopment Plan

In response to the Mt. Laurel II decision, the N.J. Legislature passed, and Governor Kean signed, both the State Planning Act and the Fair Housing Act in tandem, recognizing the need for comprehensive planning and affordable housing. Additionally, both laws were linked by citations and cross-referenced.

In fact, in the 1983 Mount Laurel II decision, New Jersey Supreme Court Chief Justice Wilentz cautioned that our State Constitution “does not require bad planning. It does not require suburban spread. It does not require rural municipalities to encourage large-scale housing developments. It does not require wasteful extension of roads and needless construction of sewer and water facilities for the out-migration of people from the cities and the suburbs. There is nothing in our Constitution that says that we cannot satisfy our constitutional obligation to provide lower-income housing and, at the same time, plan the future of the state intelligently.”

The State Development and Redevelopment Plan update is currently underway – after almost 23 years – and the Chapter is honored to be part of this process, supporting outreach efforts and being responsible for the draft preliminary plan.

Suggested Amendments from APA New Jersey include the following:

  1. The insertion of planning language linked to legislative intent (Section 2.c): “The Legislature finds that the current system does not adequately facilitate comprehensive planning that aligns with the intent of the “Fair Housing Act,” smart growth principles, and the State Development and Redevelopment Plan and that the “Fair Housing Act” and the “State Planning Act” P.L. 1985, c.398 (C.52:18A-196 et al.) were adopted concurrently to address the Mount Laurel II decision and these planning concerns, and therefore the Legislature requires that any affordable housing methodology, obligation, or compliance plan be consistent with the adopted New Jersey State Development and Redevelopment Plan.
  2. Reinforcing that the definition of a municipal “Housing Element” is “consistent with The State Development and Redevelopment Plan.” (Section 2.v)
  3. A definition of the State Development and Redevelopment Plan: “State Development and Redevelopment Plan” means the “State Plan” pursuant to the “State Planning Act,” P.L. 1985, c.398 (C.52:18A-196 et al.) designed to represent a balance of development and conservation objectives best suited to meet the needs of the State. The purpose of the State Plan is to coordinate planning activities and establish Statewide planning objectives in the following areas: land use, housing, economic development, transportation, natural resource conservation, agriculture and farmland retention, recreation, urban and suburban redevelopment, historic preservation, public facilities and services, and intergovernmental coordination (N.J.S.A. 52:18A-200(f)). (Section 2, insert y)

Additionally, APA New Jersey Vice-President of Policy, Thomas Dallessio, produced a “Principles on Affordable Housing” write-up that served as a starting point to guide discussions around ensuring better planning outcomes and was distributed as part of the Chapter’s testimony.


#2 – The Case for Allocation Reform

Led by Creigh Rahenkamp and Graham Petto, who co-authored “The Case for Allocation Reform: Why the 3rd Round Model with 4th Round Data Fails as Housing Policy & What to Do About It”, the Chapter has proposed changes to the methodology in the bill. Below is a summary with recommendations:

Methodology: Economic Factor

  • The Third Round (Jacobson) Methodology carried forward to the 4th Round produces geographic distributions of the allocation inconsistent with the Mount Laurel doctrine or good housing policy because of the nature of the data for the past decade on the nonresidential valuation and vacant land factors.
  • Non-Residential Valuation replaced an employment-based allocation factor in COAH’s 2nd Round model because the employment data included several biases, including overreporting to headquarters and prestigious addresses, and was thought to still correlate obligations with the location of jobs.
  • In looking at the data for post-2015 development, there has been a reduction in value for office and retail complexes following well-documented trends. The primary non-residential use that has grown has been warehouses. Going forward, using the non-residential value factor essentially allocates housing to those municipalities that were good locations for warehouses, not necessarily places with jobs or job growth.
  • The nonresidential value factor completely misses economic expansion related to universities, hospitals, and other tax-exempt entities, and the “Meds and Eds” sector has been a significant share of NJ’s success in this past decade.
  • The allocations using the nonresidential factor are very “spikey” in that there are relatively few municipalities with significant growth in value, resulting in very high allocations.
  • We advocate a return to an employment-based factor – the Quarterly Census of Employment & Wages” (QCEW). This includes both private sector and public sector jobs and has been reformed to address the biases that once plagued the employment data.
  • Test runs demonstrate that allocations will more closely follow the availability of jobs and are generally more equitable.

Methodology: Land Factor

  • There is less and less “vacant” land left, and it occurs in fewer and fewer municipalities, again leading to a very “spikey” distribution of need.
  • Tim Evans of NJF has been tracking where development has been taking place. There are 270 municipalities that were nearing build-out (first use of land) in 2007. They hosted only 16.8% of the State’s housing growth in 1996, increasing to 54.7% from 2008-2022, including 65.9% in 2021 and 62.4% in 2022. Reassessing the universe of built-out communities using 2015 aerial analysis, the number of municipalities rose to 349, which produced 76.8% of all new housing in 2022.
  • While there are many inclusionary developments from the 3rd Round in the approval pipeline that will add housing in time, it is clear that the vast majority of new housing to be planned for post 2025 in 4th Round compliance plans will not rely on “vacant” land.
  • We recommend returning to the use of gross acres in a growth designation under the various plans adopted by State and regional bodies and abandoning the idea that we are to allocate based on the presence or absence of “vacant land.” [Note: This has nothing to do with “Vacant Land Analysis” that occurs as part of the compliance process in determining how much of the allocation can be appropriately located in a municipality in a compliance round.]
  • This has the collateral benefit that interim numbers can be run currently that would be amended as 2023 and 2024 data become available, and we would not be hostage to the statewide assessment of “vacant” land being conducted.

Suggested Amendments from APA New Jersey include the following:

1. Replace Section 7.c.2 with the following:

(2) A municipality’s employment factor shall be determined.

(a) To determine this employment growth factor, the changes in average annual employment across private and public sectors in the municipality since the beginning of the round preceding the round being calculated shall be calculated using data from the Quarterly Census of Employed Worker Municipal Report published by the Department of Labor and Workforce Development. The change in the municipality’s average annual employment across private and public sectors shall be divided by the regional total change in average annual employment across private and public sectors to determine the municipality’s share of the regional change as the employment factor. If any municipal value is negative, that municipality’s share for this allocation factor shall be set to zero and its contribution to the regional total shall be removed from the calculation.

(b) To determine this employment factor, the average annual employment across private and public sectors in the municipality in the single year of data available six months prior to the start of the round, shall be calculated using data from the Quarterly Census of Employed Worker Municipal Report published by the Department of Labor and Workforce Development. The municipality’s average annual employment across private and public sectors shall be divided by the regional total change in average annual employment across private and public sectors to determine the municipality’s share of the regional employment factor.

2. Replace Section 7.c.4 with the following:

(4) A municipality’s land capacity factor shall be determined. This factor shall be determined by estimating the gross area of land based on the planning area type in which such land is located. After the weighing factors are applied, the sum of land area by planning area type in the municipality and in the region shall be determined. The municipality’s share of its region’s land area by planning area type shall be its land capacity factor. Land area shall be weighted based on the planning area type in which such land is located, as designated pursuant to P.L.1985, c.398 (C.52:18A-196 et seq.), P.L.1979, c.111 (C.13:18A-1 et seq.), or P.L.2004, c.120 (C.13:20-1 et seq.), as follows […]


Closing

APA New Jersey is grateful to its Executive Committee, volunteers, members, allied professionals, and housing advocates for continued collaboration and sharing of available data and resources as we participate and advocate for more changes that will ensure affordable housing is well planned, built and occupied in an equitable, resilient, and sustainable way in our municipalities.