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Municipal Options for Affordable Housing  
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David R. Troast, L.L.C

Consulting Professional  Planner & Landscape Architect
Telephone (201) 280-9350

53 Ninth Avenue
Hawthorne, NJ  07506-1749

Affordable Housing Alternatives: This is a brief description of the options available under the existing and proposed regulations under N.J.A.C. 5:94 for a municipality in addressing their mandated affordable housing obligation. This section is not all-inclusive and the statute should be referenced for additional information.

Housing Rehabilitation Program is a required component to renovate deficient housing units as identified for each municipality and as defined in N.J.A.C. 5:94-7. The requirements include the replacement of a major system in the housing unit such as electric service, plumbing, heating, septic, sewer, water, roof etc. for qualified households. A qualified employee, governmental agency or private consultant must be approved by COAH to administer the program. The average rehabilitation cost per unit is $8,000 with affordability controls such as a lien attached to the property deed.

Zoning for Inclusionary Development is an option in developing communities or in communities with areas in need of redevelopment. The developer receives a density bonus of usually six unit per one acre with a set aside of 20% of the units as affordable. An illustration of this option is as follows: A 20 acre zoned property would yield 120 units consisting of 96 market rate units and 24 affordable units (12 moderate income and 12 low income). The affordable units would be deed restricted for thirty years with unit value regulated by the state on yearly basis.

Municipally Sponsored Construction and Reconstruction is an option for a specific type of housing need or the redevelopment of a specific area of the community. An example would be a municipality in partnership with a nonprofit organization to construct an age restricted low and moderate-income housing project. A reconstruction project of an existing building requires the replacement of all major systems or expenses in excess of 50 percent of the physical value of the building.

Regional Contribution Agreements (RCAs) is an alternative for the municipality to transfer up to 50% of the affordable housing obligation and growth share estimation to a receiving municipality. The sending municipality is committed to a cost of $35,000 per unit transferred. The receiving municipality uses the funds to construct or rehabilitate affordable housing unit in their community.

Alternative Living Arrangements provide opportunities for a municipality to meet their affordable housing obligation by permitting credit for transitional facilities for the homeless, boarding homes regulated by NJDCA, residential health facilities, group homes and congregate living arrangements regulated by the appropriate state agency. Nursing home and other long-term care facilities do not qualify under this program. The affordable housing credit is calculated by establishing the number of bedrooms in the facility. Dormitory style arrangements do not qualify. There are mandatory affordability controls required for the municipality to receive credit.

Accessory Apartments are eligible for credit provided $20,000 per unit is subsidized by the municipality. This requirement is eliminated if illegal conversions have been constructed prior to the adoption of the ordinance. A municipality may claim up to 10 units with affordability controls for a minimum of 10 years.

Buy Down Programs provide a municipality the option to assist low and moderate income buyers a subsidy of $25,000 to purchase new or pre-owned vacant or occupied housing units. The limit is 10 units towards the municipal obligation.

ECHO (Elder Cottage Housing Opportunities) Housing Units assist residents by permitting a small cottage to be placed on their property for an aging family member. The municipality is required to purchase the unit and maintain it for 10 years to receive credit. This alternative can be costly because of meeting the septic code for capacity of the added bedrooms.

Source: COAH

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