newjerseynewsroom.com

Involves Community Investment Strategies' project in Elizabeth

BY TOM HESTER SR.

NEWJERSEYNEWSROOM.COM

New Jersey affordable housing advocates Thursday accused state Sen. Raymond J. Lesniak (D-Union) of attempting to redirect $20 million from the state housing trust fund to what they described as a bail out of a private developer involved in the renovation of apartments down the street from his Elizabeth home.

"This is total hypocrisy," Fair Share Housing Center Associate Director Kevin D. Walsh said. "In his own backyard, Senator Lesniak wants the state to provide a $20 million bail out to a private housing development. At the same time, he is pushing (bill) S-1, which would cut $20 million in annual funding for urban areas in the rest of the state and make it harder to build starter homes and apartments everywhere else."

Responding to the criticism, Lesniak said, "S-1 would have produced 150 percent of the affordable housing units that COAH (the state Council on Affordable Housing) produced over its 25 year history. Fair Share Housing has trouble accepting that.

"They're holding on to a failed policy like an NRA member clings to his guns and doing a disservice to low and moderate income families who deserve a better affordable housing policy, one that actually produces affordable housing rather than one that wastes money on impractical and counter-productive policies.''

Lesniak's is a co-sponsor of the bipartisan bill that will be considered Thursday afternoon by the Senate Economic Growth Committee, which he chairs. Legislators and Gov. Chris Christie would like to see the measure approved before the Legislature recesses on June 30.

Walsh said the legislation would eliminate a $20 million annual fund for housing renovation in urban areas around the state. And allow cities and towns to put up new barriers to the construction of affordable homes and apartments.

"Such policies would hurt cities and first ring suburbs around the state, places that S-1 asks to do more than their fair share while simultaneously reducing funds available,'' Walsh said. "The state should allocate scarce funds through a fair and competitive process like the one that Senator Lesniak proposes to eliminate through S-1. Ad hoc bailouts through earmarks from Senator Lesniak do not constitute an effective or fair state housing policy."

In May, Lesniak introduced a bill, S-1889 , that would transfer $20 million in payments of $5 million a year over the next four years from the state's Affordable Housing Trust Fund to renovations of the Oakwood Plaza Apartments in Elizabeth. The bill passed the Lesniak's Economic Growth Committee on May 13 and is awaiting action on the floor of the Senate and in the Assembly.

Walsh said that in January, the Union County freeholders authorized $20 million in bonds to renovate the apartments. He said the proceeds went to Community Investment Strategies (CIS), a private developer that will not have to repay the county. Instead, Walsh said, Union County and Elizabeth taxpayers would be required to pay back the funds to the bondholders, an action which enabled the bond to win a favorable rating from Wall Street ratings agencies based on "the county guarantee to levy ad valorem taxes to assure timely debt service payments."

Walsh said that in March, CIS lost a statewide competition for financing through the Low Income Housing Tax Credit program and Lesniak introduced S-1889 shortly after.

"Fair Share Housing Center calls on Senator Lesniak to immediately withdraw S-1889 and for the Legislature to reject both S-1889 and Senator Lesniak's attempts through S-1 to make it harder to build starter homes and apartments throughout New Jersey,'' Walsh said.

Diane Sterner, director of the New Jersey Housing and Community Development Network also criticized Lesniak's bailout bill.

"We are extremely concerned about today's revelation regarding Senator Lesniak's proposal to siphon $20 million from the state's Affordable Housing Trust Fund for a small, troubled project in his backyard,'' Sterner said. "Our state's scarce housing resources should be allocated through a fair and open process, and leveraged in neighborhoods across the state. Right now New Jersey's community developers are facing a $30 million cut in housing production support they rely on from this very fund.

"Instead of using the Housing Trust Fund as a slush fund for a pet project, Senator Lesniak should be helping to restore this money,'' Sterner added. "This money would help build hundreds of homes from Gloucester County to Morris, and in many communities in between. All of our elected officials need to stand up and stop this special interest deal. Further, we urge them to restore the money that is constitutionally dedicated to building the homes New Jersey residents need and want back into the Trust Fund."