Senator Joseph Kyrillos, a member of the Senate Economic Growth Committee issued the following statement following Monday’s hearing on reforming the current laws and regulations governing affordable housing that are stunting job creation in New Jersey:
“I was obligated to abstain from voting on the Senate Committee substitute that was adopted by the Senate Economic Growth Committee Monday, under the Senate Rules, in order to draft the Minority Statement. Members may not issue a Minority Statement if they concur with the majority of a committee. I do intend to vote in favor of this legislation when it is posted for a vote before the full Senate.
“I issued this Minority Statement following a hearing of the Senate Economic Growth Committee on COAH Monday to draw attention to the fatal flaws in our affordable housing statutes and regulations. The 18 month moratorium we placed on the 2.5 percent tax on development and the housing quota imposed on towns is a good first step. Sadly, this is only temporary at a time when there will be very little activity anyway. However, much more needs to be done to fix the serious structural deficiencies that still exist in the law and the regulations that took effect last year.
“I look forward working to working with my colleague Senator Lesniak and the General Assembly to adopt an affordable housing statue that does not hamper job creation and protect property taxpayers in this state.”
The Minority Statement follows:
SENATE ECONOMIC GROWTH COMMITTEE STATEMENT TO SENATE COMMITTEE SUBSTITUTE FOR SENATE, No. 2485
STATE OF NEW JERSEY
DATED: JANUARY 26, 2009
MINORITY STATEMENT
by Senator Kyrillos
I believe that this bill is surely an important first step in bringing some rationality back to the problem of providing affordable housing for the people of this State. It is not enough to place a moratorium on the 2.5 percent fee on non-residential development; it needs to be repealed completely. The Senate Economic Growth Committee heard ample testimony that the development fee is an intolerable drag on the State’s economy at a time of nearly unprecedentedly severe recession.
Similarly, the municipalities’ housing obligations, amounting to a quota system as they have evolved, should be permanently abolished in that form. Municipal affordable housing needs should be determined based on a pure growth share methodology. That is only fair.
There should be a formal process for examining the effectiveness of both the “Fair Housing Act” and the COAH Third Round regulations, and while this study is in progress, we should consider suspending both that act and the regulations. A few guiding principles should be borne in mind as we examine this issue. First, and most important, any ultimate resolution of the problem must protect property taxpayers from any liability in providing affordable housing. Second, the provisions holding the Meadowlands harmless must be extended to all major developments, including Fort Monmouth and Monmouth Park. There should be a statutory appeals process for municipalities to challenge their allocation requirements, and regional contribution agreements must be reconstituted. As it has often been said, the State has a moral responsibility, if not a constitutional obligation, to provide affordable, adequate housing for its citizens.
A letter Senator Kyrillos is sending to concerned constituents follows:
January 26, 2009
Dear [Name],
Many thanks for contacting me regarding the new State statute and regulations by the Council on Affordable Housing (COAH).
These new policies will impose huge costs on taxpayers. At an average cost of $161, 000 per unit, the mandate to build 115, 000 units will cost $18.6 billion over the next decade. It is projected that revenues from the new 2.5% tax in the legislation will only yield $1.6 billion over 10 years. Property taxpayers will be forced to shoulder the remainder, which will constitute extraordinary tax burden.
The new 2.5% tax on commercial development contained in the law hurts New Jersey businesses just when they face major economic challenges. Projects that bring jobs and investments are now being saddled with an unprecedented new tax, making New Jersey even more uncompetitive with other states, and making it even harder to reduce our highest-in-the nation property taxes.
Municipalities are required to alter their zoning in ways that endanger preserved open space and farmland and may require the construction of new schools. The law also ignores the fact that there are tens of thousands of units of housing in already developed areas that could be rehabilitated at a lower cost. Fortunately, Senate Republicans were able to force COAH to eliminate a regulation that would have forced families to pay thousands of dollars in fees if they want to rebuild their home after a fire.
In response to the overwhelming burdens that new State statute and regulations have placed on property taxpayers, the Republican Legislature has introduced legislation to mitigate those issues. The legislation, Senate Bill 2292/Assembly Bill 3441, would inject sound reason into the affordable housing issue and ensure that realistic expectations are put on municipalities. The bill recognizes that there is an affordable housing need in New Jersey; however, it balances the needs of local taxpayers who are increasingly hard-hit in these economic times with the state’s interest of providing affordable housing.
I urge you to contact the Governor, the President of the Senate and the Speaker of the General Assembly, to ask them to pass the Republican’s common sense legislation to repair the increasingly apparent flaws in their housing policies. If you wish to obtain more detailed information on the COAH housing law and regulations, please feel free to view the Senate Republican web site at www.senatenj.com.
With best wishes,
Sincerely,
Senator Joseph M. Kyrillos, Jr.
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