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Money was earmarked to help cities and towns provide affordable housing
BY TOM HESTER SR.
NEWJERSEYNEWSROOM.COM
Acting Gov. Kim Guadagno on Wednesday signed legislation that extends the moratorium on the imposition of fees on non-residential construction projects to help fund affordable housing until July 1, 2013.
Gov. Chris Christie and the bipartisan sponsors of the legislation maintain that continuing the moratorium sends a signal to businesses seeking to invest in New Jersey that the administration is working to create a pro-growth environment and restore predictability to the commercial real estate industry.
It also helps the continue delay of the construction of affordable housing in New Jersey, something both Republicans and Democrats oppose.
“Suspending this onerous and arbitrary fee is yet another example of how this administration is focused on creating meaningful and sustainable jobs and giving a much needed boost to the state’s economy,” Guadagno said. “By taking action today, we are making it easier for commercial developers to invest in New Jersey, create jobs and help us build on the positive, early progress we’ve made in returning our state to prosperity and affordability.”
The non-residential development fee was enacted as part of revisions to the Fair Housing Act and Municipal Land Use Law in 2008. The 2.5 percent fee was charged to office, commercial and industrial real estate developers to help municipalities meet affordable housing obligations. A moratorium of the non-residential fee requirement was initially placed on the imposition of fees until July 1, 2010.Jeff Tittel, New Jersey Sierra Club director, is concerned the moratorium will lead to more housing developments with few units designated for affordable housing.
“Instead of signing a bill suspending the Developer Housing Impact Fee, the Legislature needs to pass a bill reforming affordable housing laws in New Jersey,” Tittel said. “If we do not come up with a fix for Council of Affordable Housing (COAH) we will be at the mercy of the courts. The governor may have gotten rid of the council, but the function of COAH has been given to the DCA (Community Affairs) Commissioner.
“The concern that we have is that the nonresidential development fee goes to the municipalities to help meet affordable housing obligations by building new units in the town,” Tittel said. “Without a fee the towns will not have the resources to meet these affordable housing obligations. Our concern is that the Supreme Court in the next few months will rule on affordable housing we expect that the court will require all town to meet their affordable housing obligation, but because of this law the towns will not have the funds to do so. This in turn will lead to Builder Remedy Law suits where builders can sue the towns and get any kind of development they want as long as one out of five units are affordable. Builder Remedy Lawsuits will lead to sprawl, overdevelopment and the loss of open space.”
“With the economy still very much in flux, the suspension of the non-residential development fee will assist New Jersey’s non-residential real estate to get back on track, produce the jobs, taxable revenue and ratables this state desperately needs,” state Community Affairs Commissioner Lori Grifa, said.
“Because it would inflate the costs of construction, this fee would make it more costly to build all types of projects,” Charles Steindel, the state’s chief economist, said. “An additional drag on our construction sector is bad policy when New Jersey is doing everything possible to reduce unemployment and encourage economic growth.”
Extending a moratorium is critical to New Jersey’s economic recovery and a common sense move to encourage economic development, New Jersey Business & Industry Association President Philip Kirschner said.
“By putting a moratorium on the development fee, New Jersey will provide an incentive for businesses to invest in the state and create jobs,” Kirschner said. “In this economy, if someone is willing to build a new business or expand their existing business, government should be doing everything it can to encourage them.”
Since Christie took office in January 2010, through the Partnership for Action, the administration has attempted to advance policies the governor sees as improving New Jersey’s business climate.
Christie sunset the corporate business tax surcharge, and signed legislation designed to attract business, including five pro-growth tax cuts, and protected businesses from an average $400 per employee, or 52 percent, increase in the unemployment insurance payroll tax.
