NJ Supreme Court offices

TRENTON, NJ-The head of NAIOP-NJ, the state’s commercial real estate development organization, tells GlobeSt.com that his members believe the main issue regarding affordable housing regulation remains undecided, despite Wednesday’s state Supreme Court ruling that the governor could not abolish the Council on Affordable Housing.

The state court said Gov. Chris Christie does not have the authority to eliminate an independent agency such as COAH.

Christie’s first response was terse and furious: “Both elected branches of government approved the plan to eliminate COAH. Not surprisingly, this liberal Supreme Court once again ignores that and continues to blindly perpetuate its failed social experiment in housing.”

Michael McGuinness, NAIOP’s chief executive, said that the ruling decided only one of the “smaller” issues involved in delivery of affordable housing, however. He said that NAIOP is a party to another suit now before the Supreme Court  that challenges the way state funds are generated and allocated – and called it far more important to commercial real estate interests.

“For today, the issue of whether the governor could abolish COAH by executive action is decided,” McGuinness said. “The court said he couldn’t do it that way. The broader issue, though, is whether COAH can impose regulations that require a ‘growth share’ – meaning that every time new development occurs, it generates a requirement for additional affordable housing.”

While housing advocates argue there is voracious need for affordable housing and every community should help fill it, McGuinness said that the ‘growth share’ formula triggers a skewed calculation of where housing is needed most. 

NAIOP is advocating for reform of the COAH laws, regulations and methodology to permanently eliminate ‘growth share’ calculations for non-residential construction – along with the fees charged to developers to support affordable housing.

Our goal is to keep New Jersey economically competitive so that we can do a better job at attracting and retaining jobs for our residents,” McGuiness said.  ”The COAH jobs tax frustrates this goal.”

The NAIOP executive said that the court ruling Wednesday puts some new pressure on all levels of state government to address the fraught issue of affordable housing. “Another ruling could come out any time on whether ‘growth share’ is a good thing,” he said, “and that would generate even more new interest a focused debate on the whole matter.”

From affordable housing advocates, there was immediate cheering for the Wednesday ruling. “New Jersey’s most vulnerable and low-income residents will once again have an entity and process in place to implement the state’s Fair Housing laws, including local affordable housing obligations, ensuring an array of choices to call home throughout the state,” said Staci Berger of Newark’s Housing and Community Development Network.

Housing advocates have fought the Christie move to abolish COAH through every political and legal twist in the road, citing an extreme shortage of affordable housing in the state.  They say an independent agency with muscle is the only way to effectively deal with the problem.

The Supreme Court case was filed in 2011. After the Legislature approved a Democrat-sponsored bill to eliminate COAH, Christie had vetoed the measure as unworkable. He then tried to impose a reorganization plan that transferred COAH’s duties to the state Department of Community Affairs, which prompted the lawsuit brought by a coalition of affordable housing advocates.

Last year, a lower court rejected the governor’s argument that his move was legal.  Christie appealed to the top state court, which upheld the lower court ruling.

Adam Gordon, an attorney for the Fair Share Housing Center, which was a party to the suit, said the ruling means decisions about affordable housing will be more “transparent.” He said, “It’s a bad idea for policies involving homes for working families, people with special needs and lower-income seniors to be made behind closed doors.”