No news is bad news for low and moderate income families in need of affordable housing. With two cases pending before the New Jersey Supreme Court, one challenging COAH’s second attempt at the Third Round Rules, and one challenging an executive order requiring municipalities to remit unspent affordable housing trust funds to the state, municipalities are moving more slowly than ever to create realistic opportunities for the creation and construction of affordable housing. As a result of these litigations, COAH has stayed its review of municipal petitions for substantive certification, allowing municipalities to argue they have “technically complied” with COAH’s requirements while deferring the creation of affordable housing indefinitely. With the availability of affordable housing trust funds questionable, and the exact number of a municipal fair share obligation in doubt, municipal action to create affordable housing is delayed until at least the Supreme Court has rendered its decisions, and, if necessary, COAH promulgates new regulations.
For the majority of towns, this uncertainty has provided “an excuse to do nothing, as characterized by Kevin Walsh, associate director of the Fair Share Housing Center. Some municipalities have claimed that they are unable to proceed with implementing the affordable housing projects and programs included in their Third Round Fair Share Plans. The unarticulated concern behind this purported paralysis is that municipalities want to avoid creating affordable housing in excess of their COAH-required minimum and hope that the Supreme Court review will result in a regulatory overhaul reducing their fair share obligations. Other municipalities have articulated a bolder position, interpreting the Appellate Division’s opinion and the pending Supreme Court review as invalidation of COAH’s Third Round altogether, adopting a position that the third round does not exist, and therefore, no affordable housing need be provided for this round. Regardless of whether municipalities are dragging their feet in the creation of affordable housing or rejecting the Third Round on a wholesale basis, the result is that these municipalities, as described by Mr. Walsh, “have no sense of urgency… They are sort of content to just hang out there with no money being spent” from their affordable housing trust funds and no affordable housing being built.
Even municipalities who purport to be committed to create affordable housing have claimed to encounter road blocks as they attempt to implement their fair share plans by utilizing funds in their affordable housing trust funds. The law provides that municipalities must “commit” to spending their affordable housing funds within four years of their receipt, or forfeit the funds to the state affordable housing trust fund. Municipalities have complained that the law does not define “commit,” and they are unsure of whether their funds are immune from forfeiture or due to the state. To further complicate the issue, the Christie administration earmarked the forfeited funds as revenue in 2012-2013 state budget, prompting an injunction from the appellate panel.
Thus, the unused trust fund money, as well as the Third Round rules, remain in limbo and affordable housing remains unbuilt. As observed by Mr. Walsh, “the losers all around on this are the lower-income households” who are in need of affordable housing.