Published May 2, 2013
By David Levinsky

TRENTON — The New Jersey Council on Affordable Housing board convened for the first time in more than two years Wednesday in order to authorize Gov. Chris Christie’s administration to begin proceedings needed to seize about $142 million in unspent affordable housing funds held by local towns.

The board voted 4-1 to approve a resolution authorizing letters to go out to towns instructing them to respond by May 22 with a full accounting of any money remaining in their affordable housing trust funds as well as any agreements or plans related to how they intend to spend the money.

Although the board promised to meet again soon after the deadline, board Chairman Richard Constable, who is also commissioner of the state Department of Community Affairs, would make no promises that the state wouldn’t instruct towns to turn over unspent money before then.

“If you have a problem, file a lawsuit,” Constable told irate affordable housing advocates.

Funds not already committed to specific housing projects are subject to seizure by the state, per legislation signed in 2008 that gave towns four years to “commit to expenditure” all the money in their accounts or forfeit the leftovers to the state.

Christie’s budget anticipates the funds as revenue during the current fiscal year that ends June 30. If the money isn’t collected before then, he will be forced to make spending cuts elsewhere or carry less of a surplus into the 2014 fiscal year.

But like most matters involving New Jersey’s notoriously complex affordable housing laws, the issue is far from settled as housing advocates and municipal officials promised to take the state to court, arguing that COAH still hasn’t adequately defined what qualifies as “committed” and that the trust fund money should remain in towns’ control to build much-needed affordable houses rather than plug a state budget hole.

As much as $10.64 million in unspent funds in Burlington County towns’ accounts is at risk of being seized.

“It’s a money grab that’s occurring without concern for the very human needs after Sandy in a state that’s already the most expensive in the nation,” said Kevin Walsh, executive director of the Cherry Hill-based Fair Share Housing Center. “It’s unconscionable.”

Walsh was one of more than two dozen people who spoke in opposition to the state’s seizure during the contentious meeting, which featured dissent from both the audience and one board member.

Several people argued like Walsh that towns were never given clear guidance about how trust fund money — originally collected as fees from builders — should be used, and that uncertainty and inactivity of COAH made it hard to spend down the accounts.

More than half the money remaining is in counties hit hard by Superstorm Sandy and would be better used in the rebuilding effort, advocates said.

“All New Jersey deserves an equal chance to rebuild their lives. We’re asking you to not take away funds that will help them do it,” said Staci Berger, director of the Housing and Community Development Network of New Jersey, before the vote. “You don’t need to give this money to the state to be fettered away in what we believe will be budget gimmicks.”

Other opponents said that seizing the money would scuttle plans for the construction of more supportive housing and group homes for disabled residents, and that it would spark more unwanted sprawl in environmentally sensitive areas such as the Pinelands.

The budget specifies that all seized affordable housing funds will be used to pay for state programs providing rental assistance and homeless prevention and sheltering services. But housing advocates claim there’s nothing to prevent the administration from diverting the money for other programs or to fill a projected deficit.

“It will be immediately transferred,” Walsh said. “There will not be a net increase in affordable housing in New Jersey.”

Because the state constitution requires a balanced budget, Christie needs to collect the trust fund money before June 30 or he’ll be forced to cut spending elsewhere or carry less surplus into the 2014 fiscal year.

His administration originally moved to seize the money from municipalities’ trust funds last summer, but the seizure was stopped by a New Jersey appeals court, which ruled that only the COAH board, and not its executive director or staff, could direct towns to turn over money collected to meet their affordable housing obligations.

The board, which is made up of gubernatorial appointees, did not previously approve taking the money because Christie had dissolved it via an executive order that also was invalidated by the same appeals panel.

In the months since the court’s ruling, the unspent trust fund money has remained largely in limbo, according to municipal officials, who claim they have been unable to get state approvals to spend down their accounts on affordable housing projects.

Mike Gedziniak, an attorney who represents Pemberton Borough in affordable housing matters, said the municipality has an agreement with the nonprofit Affordable Homes Group to transform the vacant Pemberton Borough Elementary School building on Egbert Street into an apartment building with affordable units, but that it’s been unable to get approval to use its remaining affordable housing trust fund money on the project.

Without those funds, the deal is unworkable, he said.

“It’s the difference between economically feasible and not economically feasible,” Gedziniak said.