Plan that helps city and suburb

This is a point of view on RCA’s that appeared in the Bergen Record on June 17th.

Plan that helps city and suburb
Sunday, June 17, 2007 By JAMES AHEARN

THE SPEAKER of the New Jersey Assembly, Joseph Roberts, has denounced as “blood money” the affordable-housing deals that affluent suburbs make with struggling cities.

The deals provide suburban money for new or renovated urban housing. Called regional contribution agreements, or RCAs, they are anathema to the speaker. He wants to abolish them.

Roberts, a Camden Democrat, is an effective leader. He demonstrated this again recently in winning legislative approval for dedication of all of last year’s sales-tax increase to property tax relief.

In talking of “blood money” and calling for abolition, the speaker strikes a responsive chord with those who think the well-to-do buy their way out of obligations they should rightfully shoulder.

It is true that RCAs have been abused. Some towns have made use of them and other maneuvers to prevent construction of all but a token number of affordable units within their borders. That is not right. Reform is needed, but abolition would be a mistake.

In the history of RCAs we see once again the American knack for fashioning, through trial and error, social and governmental structures that create multiple winners.

Winners, losers

Here the winners include the suburbs, the cities, the workmen who repair and build housing and the families that move into the housing. Also benefiting is open-space preservation.

Who loses? Absolutists who insist that every community with developable land must allow construction of enough affordable housing to meet the town’s fair share of regional needs, without paying needy cities to accept some of it.

Some background: In 1975 the state Supreme Court issued a landmark ruling in a lawsuit brought by black residents of Mount Laurel, then a largely rural township in Burlington County, but one with mushrooming suburban-style development, unaffordable to the plaintiffs, who lived in dilapidated shacks.

The court held, unanimously, that developing municipalities must make “realistically possible” their fair share of the present and prospective regional need for housing affordable by low- and moderate-income families. However, not much happened for eight years. Then, in a follow-up ruling, the court put teeth in its ruling.

It said towns could be required to adopt inclusionary ordinances, permitting housing developers to build at higher density than usual, in return for making 20 percent of the units affordable. Also, successful inclusionary plaintiffs could obtain a “builder’s remedy,” a right to build without regard to some zoning restrictions.

To head off criticism that the court was meddling with issues customarily resolved through the political process, the decision, Mount Laurel II, invited the Legislature to seize the initiative and pass a law dealing with these matters. It did so in 1985, creating a Council on Affordable Housing with rule-making power and authorizing regional contribution agreements. These would permit suburban towns to finance as much as half their “fair share” elsewhere, usually in older cities.

Surviving challenge

The new law, including the RCA section, was subsequently found constitutional by the court. So RCAs have not only been sanctioned by the Legislature, which was controlled by Democrats in 1985, but also by the governor at the time, Republican Thomas Kean, and by the Supreme Court, whose chief justice, the author of Mount Laurel II, was the formidable Robert Wilentz, a Democrat.

Over the years, more than $200 million has been paid by suburban towns to satisfy some of their affordable-housing obligations by financing construction elsewhere. The 53 willing recipients include Paterson, Garfield and Passaic City in North Jersey.

Paterson received nearly $8 million from Wayne for 455 units at $17,500 per unit. Garfield received more than $3 million from various towns for 136 units. Trenton has built an astounding 1,400 homes. New Brunswick, Newark and Jersey City have also benefited handsomely.

Any move to build housing on this scale in mostly developed suburbia would set off determined opposition, no matter who was going to live in it. To be realistic, it is not likely to happen.

Jon Corzine, probably the most liberal governor in New Jersey history, campaigned for election in 2005 promising to build 100,000 units of affordable housing over 10 years. He, like Joe Roberts, has criticized RCAs. But a year and a half after his inauguration, Corzine has yet to present a plan.

Alternative funding

The New Jersey Urban Mayors Association called a news conference recently to announce opposition to the Roberts bill, but with a proviso. If replacement funding was provided for cities, through constitutional dedication of a new state real estate transfer fee to a new urban fund, they would go along with it. Also, they said, the state should provide financial aid to reluctant suburbs to prod them into meeting their constitutional obligation.

I suspect the mayors are making a tactical mistake here. In some future state budget crunch, policymakers can be expected to look for a way to suspend dedication of the new real-estate fee, or to creatively redefine how the money can be spent.

As things stand now, suburbs willingly pay, out of dependable property-tax revenue, significant sums to have part of their affordable-housing quota built elsewhere. The cities seem to be making good use of the money, too.

Experience indicates that if something ain’t broke, don’t fix it.

James Ahearn is a contributing editor and former managing editor of The Record.

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