Bill Text: NJ A3570 | 2014-2015 | Regular Session | Introduced
Bill Title: Permits municipalities to set amount of developer contribution to affordable housing trust funds in exchange for certain tax abatements.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-09-11 - Introduced, Referred to Assembly Housing and Community Development Committee [A3570 Detail]
Download: New_Jersey-2014-A3570-Introduced.html
Sponsored by:
Assemblyman CARMELO G. GARCIA
District 33 (Hudson)
Assemblyman RAJ MUKHERJI
District 33 (Hudson)
SYNOPSIS
Permits municipalities to set amount of developer contribution to affordable housing trust funds in exchange for certain tax abatements.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning developer contribution to municipal affordable housing trust fund and amending P.L.2003, c.125.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2003, c.125 (C.40A:12A-4.2) is amended to read as follows:
2. Any municipality that makes the receipt of a tax abatement conditional upon the contribution to an affordable housing trust fund shall include within the ordinance detailed guidelines establishing the parameters of this requirement including, but not limited to, the following:
a. standards governing the extent of the contribution based on the value of construction for market rate residential or non-residential construction, as the case may be [; provided, however, that this contribution shall not exceed $1,500 per unit for market rate residential construction, $1.50 per square foot for commercial construction, and 10 cents per square foot for industrial construction;] , and the per unit contribution for market rate residential construction, the per square foot contribution for commercial construction, and the per square foot contribution for industrial construction, as appropriate;
b. a schedule of payments based upon phase of construction; and
c. parameters governing the expenditure of those funds, legitimate purposes for which those funds may be used, and the extent to which funds may be used by the municipality for administration.
(cf: P.L.2003, c.125, s.2)
2. This act shall take effect immediately.
STATEMENT
This bill amends section 2 of P.L.2003, c.125 which details the statutory guidelines for a developer's contribution to a municipality's affordable housing trust fund in order to receive certain tax abatements. Any municipality that makes the receipt of a tax abatement conditional upon the contribution to an affordable housing trust fund shall include in the ordinance, among other things, standards governing the extent of the contribution based on the value of construction for market rate residential or non-residential construction. Presently, the contribution cannot exceed $1,500 per unit for market rate residential construction, $1.50 per square foot for commercial construction, and 10 cents per square foot for industrial construction.
The statutory caps imposed on developer contributions have proven to be woefully inadequate to support the creation of affordable housing at a reasonable ratio to market rate housing. In order to generate the municipal affordable housing trust funds needed to construct just one unit of affordable housing, hundreds of market rate housing units must be constructed. For example, in order to construct one unit of affordable housing (at a cost of $300,000), 200 market rate units (with a $1,500 per unit developer contribution) have to be constructed. For many municipalities, a development ratio of 200 market rate units to 1 affordable unit is simply unacceptable.
Municipalities are in the best position to evaluate how much a development project in a specific market can afford to pay toward affordable housing in exchange for approval of a tax abatement, and should be given the discretion to set developer contribution rates accordingly.
