HOW DOES YOUR COMMUNITY VIEW AFFORDABLEHOUSING?

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New Jersey is an extremely expensive state, and even thosewith good, full-time jobs struggle to find an affordable place tolive. Responses to this week's poll indicate that their strugglemay continue. Nearly half (45%) of the responses say that theircommunities have adopted a 'Not in My Back Yard' stance when itcomes to affordable housing. An almost equal number (41%) say thateducation has helped, but affordable housing is not yet widelyaccepted by residents in their area. A mere 14% say their communityembraces it. Lori Grifa, a partner in the law firm Wolff &Samson in West Orange discusses a different community's view ofaffordable housing—non-residential developers. Here is what she hasto say:

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"Generally, the non-residential developers I represent don'tobject to participating in the process of providing affordablehousing in some respect. However, the new regulations that havebeen proposed and are likely to be adopted next week threaten toderail non-residential development in New Jersey in its entiretybecause they are so burdensome.

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"The legislation is helpful in some ways. In this round, thethird round, a new formula was developed to calculate how muchaffordable housing should go up. This formula was based on theamount of residential and job growth in the area, and that madesense. But the law says that if you're going to ask a developer toparticipate in this, they're entitled to a compensatory benefit. Ifyou tell a developer they have to build X number of houses that aredeed-restricted affordable, the developer has to get something inexchange for the loss of revenue for that house. The way that round3A was written, none of the courts or the participants could figureout what the benefit was for participants. Round 3B, which is nowpending adoption May 6, tried to address that by giving thedeveloper the relaxation of certain rules regarding heightrestrictions and maximum floor area.

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"The real problem, where my clients are afraid this is going tocompletely derail non-residential development, is, typically, backin the days of legislation round two, which ended in 1999,non-residential developers were asked to pay a 1% development feeinto a fund that the town was supposed to use for affordablehousing units. Round 3A raises that fee to 2%, and with round 3B itwent up again to 3%. So if you run those numbers by the squarefootage of what you're building, it's a significant fee per sfthat's likely to impact your ability to rent something that youbuild. So this 150% increase in the fee between 2004 and 2008 is areal problem. The increase from 1% to 2% is defensible because ithadn't increased for 15 years, but between 2004 and 2008, itincreased by another 50%, and that's a little hard for the state tojustify.

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"So there's the increase, which is hard to swallow, but there'sanother matter to consider. It's the town's option to take the feeor require a non-residential developer to build, so this newregulatory scheme defies sound planning principles. If I built awarehouse or a big-box store, that's going to generate a housingobligation. The way the regulations are written, the town couldforce me to build apartments, condos or townhouses in my parkinglot. Towns ideally have a master plan, so commercial and businessdistricts are unto themselves and are surrounded by residential. IfI build a big-box store but have to create X number of units basedon the square footage of that store, it absolutely defies soundplanning principles, so that's a problem.

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"But round three regulations are even more onerous because ifyou wanted to build the housing offsite in a place that makesbetter planning sense, the regulations provide for a penalty. Theyrequire me to pay a certain fee, and there's an enhanced penalty ifI move it offsite. From my perspective and from my clients'perspectives, non-residential developers are basically taking abeating coming and going. I suspect that in the next two weeks,you'll see a series of lawsuits filed challenging theseregulations. It's inevitable."

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