Published March 30, 2021
By John Restrepo and Staci Berger

A year into the COVID-19 pandemic, it has never been clearer that having a safe, affordable home is a prescription for good health. Stable and secure housing saves lives and improves the quality of life. For Black and brown residents, the racial wealth gap has limited housing and neighborhood choices, and made many parts of the American Dream, like college, out of reach. Public officials and thought leaders working to dismantle systemic and institutional racism need to build healthy and affordable communities for everyone who calls New Jersey home. We will not do that by returning to the past practice of using the state’s Affordable Housing Trust Fund (AHTF) for other purposes.

The proposed state budget includes several important housing investments that help address the state’s racial and economic disparities, including increased funding for emergency Code Blue resources, rental assistance for new moms and support for LGBTQ folks experiencing housing insecurity. We enthusiastically endorse these proposals.

However, the budget also proposes to divert $57 million from the AHTF. This plan moves funds legally intended to build and create affordable homes for New Jerseyans struggling to make ends meet, into programs that benefit wealthier residents. After a decade of raids, the AHTF is finally poised to be fully capitalized. Using these funds as intended will help bring relief to lower-income residents and local governments who are working to meet their fair housing responsibilities. We cannot go backward to a time when the state treated this trust fund as a slush fund.

The AHTF was created to provide a means for complying with the Fair Housing Act and it is legally intended to produce and/or rehabilitate homes that lower-income residents can afford in a state where an imbalanced housing market has created deeply segregated communities. Unfortunately, the budget proposes to divert $20 million for down payment assistance for homeowners who earn up to 140% of the Area Median Income. Even worse, this plan doesn’t create a single new affordable home, despite the dire need. Voters understand this. According to a 2018 Rutgers-Eagleton poll, nearly 80% of residents want these funds used as intended and not for anything else, however worthy.

Down payment assistance and other housing investments to bridge the racial wealth gap are important, but they can be accomplished without diverting the AHTF. Garden State Episcopal Community Development Corporation (GSECDC), just one of the Housing & Community Development Network of New Jersey’s nearly 270 members, is able to use funds to reach lower-income, Black and brown residents and pair Community Reinvestment Act mortgages to obtain private market financial assistance. In Jersey City, GSECDC has built 72 affordable homes, 69 of which were purchased by Black and brown homeowners with an average income of $48,000. Bus drivers, security guards and physician assistants, many of whom obtained $5,000 each in down payment help, are now homeowners in their own community.

The demand in New Jersey’s communities is to generate more affordable homes for lower-income residents. In Newark, the median income is $35,199 but this raid would allow for a household with three people earning up to $133,560 to qualify for HMFA’s down payment assistance, based on federal data and guidelines. According to the recently released Rutgers’ CLiME study, Homes Beyond Reach, the median income for Newark renters is slightly lower at, $30,000. The CLiME assessment calls for 16,000 new affordable rental homes to meet the housing needs of Newark residents.

Despite this, the budget proposes to divert at least another $10 million for tax credit financing to build homes for residents earning between 80%-120% of the Area Median Income. Diverting the AHTF funds will not help address the need in our urban centers. For suburban communities working to meet their fair share housing obligations, it means losing millions of dollars that can support those efforts.

All of the data before and during the pandemic shows that lower-income Black and brown residents have the most pressing housing needs, and have borne the brunt of COVID-19′s impact. New Jersey should invest the AHTF as intended to create affordable homes in order to address the deeply tied knot of the racial wealth gap, health disparities and housing injustice in our communities. Together, we can recover from the pandemic and build a thriving New Jersey for everyone.