RCAs and a towns obligation to provide affordable housing has got the legislators at odds and municipalities at a loss

This article appeared in South Jersey Magazine.

Little Pink Houses for Everyone?

From the pages of South Jersey Magazine
RCAs and a towns obligation to provide affordable housing has got the legislators at odds and municipalities at a loss

It’s December 14th, 2006 and state Assembly Speaker Joseph J. Roberts, Jr. has just filed a bill aimed at the eradication of what he may consider to be the most vile acronym to exist within the state of New Jersey since the Ku Klux Klan rolled into Hamilton Township in Model Ts for a rally in 1924. It is a bill about which he has been dreaming for many years, and finally seeing it come to fruition is like a birth. It is given the number 3857 and its enemy is a pain in the side of almost every affordable-housing cheerleader in the Garden State. Its arch nemeses, its purpose for existence, are three little letters: R-C-A.

That’s Regional Contribution Agreement, for the unawares, and Roberts’s bill does not mince words when it comes to these inter-municipal contracts that have been a common practice in the state for the last thirty years. [RCAs have] proven not to be a viable method of ensuring that an adequate supply and a variety of housing choices are provided in municipalities experiencing growth, reads the bill. “Therefore, the use of a regional contribution agreement should no longer be permitted.

Roberts’ baby has been working its way through Trenton for three months now, and in the course of that journey it has gathered its fair share of discussion. Some has been positive. And some, not so much. But how is it that just three letters could cause such a socio-political stir? The answer begins in 1975, when the state Supreme Court decreed all municipalities were obligated to provide a certain percentage of low-to-moderate income housing each year, forcing cities, townships and boroughs to build for the poor (and moderately poor) whether they wanted to or not. This has come to be called The Mount Laurel Decision.

In that pronouncement, however, the court implied a municipality could fulfill up to half of this obligation by entering into a binding agreement with another municipality. The specifics of this implication were not thoroughly outlined for another ten years, when the legislature enacted the Fair Housing Act of 1985, which specifically authorized a municipality to satisfy up to 50 percent of its affordable housing obligation by entering into a binding agreement with another municipality. Under the agreement, the so-called sending municipality contributes a certain amount of money per unit to a receiving municipality in its region. The receiving municipality then uses that contribution to rehabilitate or create low-to-moderate income housing. To some, this is a win-win.

Sending municipalities (which are often already crowded) can still build some new affordable housing units while providing a receiving municipality funding it desperately needs to renovate already existing structures or to build new units for low-and moderate-income families.

But then there are those like Roberts (D-5, Gloucester and Camden), who look upon RCAs as blights, insidious loopholes in an otherwise airtight affordable housing system in the Garden State. Cancers.

Regional contribution agreements are deplorable, says Roberts. They lead to a concentration of poverty in urban centers and they deprive families of the opportunity to live anywhere in the state. They are one of the reasons New Jersey is considered one of the nation’s most racially and economically segregated states. New Jersey needs a broader and more enlightened housing policy that works for all families.

Sen. John Adler (D-6) recently co-sponsored a senate version of the speakers bill, which also seeks to eliminate RCAs in New Jersey. I don’t think there’s any question that every community should have socio-economic diversity. Instead, we have land use policies that push poor people into cities and farther away from jobs that exist in the suburbs, says Adler. I am not casting any moral blame on municipalities that have used [RCAs], but on a collective basis, as a society, we are better off without RCAs. If we want a society that is integrated, we have to get away from RCAs and get away from land use policies that trap people in cities.

Some argue, however, that legislators such as Roberts and Adler cannot see the financially beneficial forest for the trees, that they see an RCA as a shirk of responsibility, nothing more. Figures from Trenton, however, tend to paint a slightly more ambiguous picture. To date, the state has approved 3,755 separate RCA-funded developments and renovations to take place between 2005 and 2015. That’s $141 million in housing with more to come. Granted, Roberts’s bill intends to make up for the RCA funding with a $15 million annual fund that would be drawn from the state’s realty transfer tax. Two thirds of that, says Roberts, would be used for housing rehabilitation grants.

The $15 million allocation is not a satisfactory solution for Mike Cerra, senior legislative analyst for the New Jersey League of Municipalities, which has formally stated its opposition to Roberts’s bill. Sure, says Cerra, the potential legislation provides for $15 million, but those are funds already in the treasury. The additional monies lost with the death of RCAs still remains a troubling question that needs to be addressed, he says.

Moreover, says Cerra, why should the state be so concerned with the supposed unfairness of agreements into which municipalities enter willingly? A receiving municipality can refuse to enter into any agreement with a potential sender for a host of reasons, and under no circumstance are municipalities obligated to partake in RCAs if they do not so desire. This was demonstrated quite succinctly in 2005 when Pennsauken turned down an RCA offer of $3 million from Medford. Bob Cummings, Pennsauken’s business administrator, has said the township council believed it would have been bypassing its moral obligation to take on its fair share of humanity had it accepted the Medford money.

“RCA agreements are voluntary. They are entered into willingly by both the sending and receiving towns and we don’t judge the decision to enter into them or not enter into them, says Cerra. We think local leaders are in the best place to make those calls.

Which raises yet another sub-chapter of contention contained within the controversial conversation surrounding the assembly and senate bills: municipal autonomy. According to Cerra, the league has received resolution after resolution in opposition to the bill, one of the primary impetuses being towns and boroughs feelings regarding the perceived loss of their (limited) sovereignty. And that certainly has Montvale Mayor George B. Zeller feeling quite salty about the ordeal.

We are being strangled by housing right now, and this is going to drive business right out of the state, says Zeller, whose four-square-mile enclave in North Jersey is, he claims, already too crowded to accommodate any more housing. Should RCAs no longer be an option and the Borough of Montvale is forced to build more affordable housing, Zeller says he has no place to put it other than over the Garden State Parkway or in a corporate business park.

I don’t think anyone has sat down and looked at what they’re doing state-wide. There is no real plan of action. It’s helter-skelter, says an impassioned Zeller, whose council passed a resolution formally opposing both Roberts’s and Adler’s bills in February, stating in the resolution that RCAs have been an enormously useful and beneficial compliance technique to both sending and receiving municipalities.

Take the City of Salem for example. In February of this year, Salem entered into a regional contribution agreement with Ocean City. As the receiving municipality, Salem will acquire $35,000 per unit in restricted funds from Ocean City over a two-to-three-year period, with a total of 13 units for which it will be compensated. That’s $4,550,000 Salem mayor Earl Gage is excited to receive. It’s a shame we can’t use this money to lower taxes or improve other parts of our city, Gage was quoted as saying in The Courier Post. But that being said, the money can still be put to good use by our city. They want housing for the inner cities and yet here is a funding mechanism and they want to cut it off continues Zeller. Social engineering. That’s what’s going on here. They want to spread everyone throughout the entire state. And for some reason the social engineers in Trenton think this is a good idea. But it doesn’t work.

Not according to Barbara Heisler Williams, executive director of the Fund For An Open Society, a national not-for-profit organization based in Maplewood that promotes community and residential integration. The detriment of [RCAs] is to people who aren’t able to afford to buy housing in a number of communities in our state because those communities have opted to not provide any affordable housing. And we know that kids do better in mixed-race and mixed-income communities than they do in low-income communities, says Williams. And we know there is more to success than simply someone’s own drive. Networks play a huge role and we take for granted our networks.

Neglecting to mention Camden in this discussion would be unwise. As the state’s most troubled city, Camden has entered into numerous RCAs with surrounding municipalities in the past. In 2002, however, shortly after the state took over operating the blighted city, Camden, under Roberts’s insistence, was barred indefinitely from entering into RCAs with surrounding municipalities. When asked why the legislature should’t simply deny RCAs in cities and towns in a similar state of disrepair, thereby avoiding sweeping state-wide legislation and the debate currently taking place, Roberts says, That is one approach. But right now I would like to eliminate all RCAs because each RCA translates into less affordable housing in suburban areas. RCAs perpetuate economic segregation in New Jersey. This contributes to high crime rates, poorly performing schools, failing property values and high tax rates.

But, as Cerra points out, they can also lead to socio-economic prosperity. We need to look at the whole puzzle. You take away RCAs but what’s the response? What’s the alternative? How are suburbs and rural areas going to deal with their growing housing obligation? There’s a disconnect, says Cerra. Some cities have done really good things with RCA funding and we can’t undercut what’s already been done. The [Gov. John Corzine] always says, The perfect shouldn’t be the enemy of the good. We understand and are sympathetic to those who raise objections to RCAs, but our response is to work to find something that’s better.

To reach Nick DiUlio send email to Nick@SouthJersey.com

Published (and copyrighted) in South Jersey Magazine, May 2007.

Author: Nick DiUlio