Original Article

With less than two months until Election Day, surrogates for New Jersey’s two leading candidates for governor on Thursday spoke directly to real estate and land use experts.

As it often is, affordable housing was the dominant topic.

Representatives for both Lt. Gov. Kim Guadagno and Phil Murphy addressed the long-running policy crisis during a conference hosted by PlanSmart NJ. Both said judges should not be responsible for overseeing the creation of affordable housing — as the state judiciary has been doing over the past two years — but offered differing ideas when it came to alternatives.

Middletown Mayor Gerry Scharfenberger read a prepared statement from Guadagno, the Republican nominee, who said “the conditions that existed when the Fair Housing Act was written into law over 30 years ago are not those that exist today.” Namely, he said the market no longer favors large single-family homes as was the case in the 1980s and 1990s.

“Despite this record of legislative futility and judicial overreach, we have an incredible opportunity to fix the affordable housing crisis once and for all,” said Scharfenberger, the director of the state Office for Planning Advocacy. “Our state must embrace a policy that mirrors our current economic realities and establish affordable housing where the jobs or the transportation hubs to those jobs are located.”

That concept of affordability ties into Guadagno’s pledge to lower property taxes and cap school taxes at 5 percent of household income, Scharfenberger said.

Speaking for Murphy, the Democratic nominee, state Assemblyman Daniel Benson touted the candidate’s pledge to “get the economy working for middle class families.” He said “affordable housing, for so many, is the entry into the middle class,” noting that Murphy has called for solving the state’s foreclosure crisis as way to create options for low- and moderate-income families.

“That means going after Wall Street and the settlement money that’s available,” Benson said, referring to a 2012 settlement between states and the nation’s largest banks over alleged foreclosure abuses. “New Jersey, unfortunately, has taken only a pittance so far of the hundreds of millions of dollars that are available.”

He also pointed to Murphy’s proposal to form a state bank, which he said could provide lines of credit for nonprofit housing initiatives and assist municipalities with repurposing foreclosed properties into affordable housing.

“We can make that a win-win situation across the state,” said Benson, whose district office is based in Hamilton. “We have to do it.”

How to address the affordable housing crisis was among several questions raised during PlanSmart’s 6th annual New Jersey Planning Summit, which took place at Somerset Development’s Bell Works complex in Holmdel. Organizers said both Murphy and Guadagno were in Atlantic City to attend a memorial service for state Sen. Jim Whelan, who died suddenly late last month, prompting the candidates to send Scharfenberger and Benson to the conference in their place.

The surrogates and an expert panel also discussed economic development, business incentives and the state planning process during the program. But PlanSmart Executive Director Stephen O’Connor set the stage early by diving into New Jersey’s vacancy and foreclosure crisis.

Roughly 389,000 of the housing units in New Jersey are vacant, representing 11 percent of the state’s overall housing stock, he said. That includes 78,000 foreclosures, which contributes to the highest rate of foreclosures in the country and accounts for another form of distressed assets in the state beyond the much-discussed vacant office and retail complexes.

“This kind of conversation and data needs to be folded into what we do with the Fair Housing Act, how we approach COAH, how we approach a lot of this existing inventory,” O’Connor said, referring to the now-defunct Council on Affordable Housing.

The conference comes more than two years after the state Supreme Court shut down COAH and handed the agency’s oversight to the state judiciary. Judges across the state have been tasked with brokering settlements between fair housing advocates and hundreds of local governments, while other municipalities have dug in for additional litigation.

In towns that continue to resist affordable housing projects, developer Eugene Diaz said residents are not necessarily opposed to the inherent concept. Instead, they’re voicing concerns about the types of high-density projects that are needed to carry low- and moderate-income units.

“We’re not seeing wholesale, visceral reactions to affordable housing, per se,” said Diaz, principal partner of Prism Capital Partners. “We’re seeing the argument on the density level, (against) the density you need to afford some of those additional affordable units in a particular township. And that’s where additional subsidies and the like will help.”

Collingswood Mayor James Maley Jr. said some municipalities are beginning to embrace high-density, mixed-use development out of necessity. With the state-mandated, 2 percent cap on property tax increases that was enacted in 2010, local officials have been forced to look elsewhere to grapple with the rising costs of health care, road repairs and other annual expenditures.

“There’s more of an openness. … I think they’re slowly changing because they have to,” said Malley, who is also a land use attorney. “You just can’t sustain yourself.”

Experts say the issue is fundamentally linked to other policy questions that have come before the gubernatorial hopefuls. Devra Goldberg, director of government relations with Canoe Brook, said one of those questions is how to create the environment that will help grow the state’s economy.

“All of us, especially those of us on the business side, have talked for a long time about New Jersey needing to incentivize and bring in new business and new companies to the state,” Goldberg said. “But one of the things that’s stopping people from moving here is that they don’t have enough affordable places for their employees to live.”

Still, meeting the demand and the government mandate for affordable housing is also a question of resources, according to Anthony Marchetta, executive director of New Jersey Housing Mortgage and Finance Agency. The agency uses federal tax credit programs and other tools to help finance the production of thousands of units each year, he said, largely through projects that are 100 percent reserved for low- and moderate-income residents.

But he added that those resources are limited, prompting the need for inclusionary market-rate projects that offer set-asides for affordable units. He said “there are a lot of creative ways to address it,” but part of doing so requires developers, policymakers and academics to educate the public on the modern concept of affordable housing.

“I think most people associate it with public housing and the examples of the high-rise buildings that we’ve seen being torn down, where people were living in horrific places,” Marchetta said. “I have to assure you that, with the quality of the (affordable) housing that is being produced today from the development community … I wouldn’t hesitate to live there.

“And in many cases, it’s equal to if not better than the typical, plain vanilla market-rate housing.”