Policy Notes: February 2023
Affordable Housing at Issue in the Pinelands. ‘Policy Notes’ are designed to update the public on the activities of the Pinelands Commission, which have been summarized by Pinelands Preservation Alliance staff who attend all public meetings of the Commission.
By Heidi YehMarch 2, 2023
It was a special day, as long-time Commission employee Susan Grogan was appointed as its Executive Director. You can read more about her promotion in this blog post.
Then the Commission attended to its usual business matters. There were no large or concerning proposals on the agenda, but the issue of affordable housing emerged as an important theme that has not been given its due attention by the Commission.
Since the 1975 Mount Laurel I ruling, municipalities have been required by the NJ State Constitution to use their zoning powers to provide ‘realistic’ affordable housing opportunities for low- and moderate-income households. As a rule of thumb, housing is considered ‘affordable’ when a family/individual is able to spend 30% or less of their gross income on housing expenses (as defined by the federal Department of Housing and Urban Development, HUD). In 2008, a specific number was assigned to this legal requirement for developers and municipalities: 20% of new housing units must be set aside for low- and moderate-income (LMI) buyers and renters. LMI is defined by HUD as those earning less than 120% of the region’s median household income—but the Uniform Housing Affordability Controls (UHAC) of NJ sets a stricter standard between 50-80% of median income. What counts as ‘median income’ is determined by the Affordable Housing Professionals of New Jersey (a 501-C6 non-profit); you can see the numbers for your county here. If fully enforced, it would allow the state of New Jersey to make significant progress toward rectifying housing disparities. However, the law allows developers to reduce or eliminate their affordable housing requirement based on subjective arguments of ‘economic feasibility’. We’ve seen this loophole being exploited with alarming frequency, and enforcement has essentially been left to groups like Fair Sharing Housing to litigate developers into compliance.
Developers Shirking Affordable Housing Requirements Attempt to Blame Pinelands Commission
Some types of development in the Pinelands are required to purchase Pinelands Development Credits (PDC’s). This is a Pinelands-specific “transfer of development rights” market that provides an economic incentive for preservation in the core of the Pinelands; you can find a basic overview of the program here, or go even deeper here. When applicable, this PDC requirement is only applied to a percentage of the market rate units (i.e. not affordable housing) in the development. Since affordable housing units are exempt from the PDC requirement, these two obligations are not in conflict. However, this hasn’t stopped developers from unjustifiably claiming that the PDC requirement makes it economically infeasible to build affordable housing units.
Fair Share Housing Center’s Esmé Devenney called in to the February 24 meeting of the Policy & Implementation Committee of the Pinelands Commission to draw attention to this issue. The Timber Ridge Development was allowed by Egg Harbor Township to reduce how many units it set aside for low-and moderate-income families. The developers argued that its PDC requirement coupled with affordable units would make the project economically infeasible. Worse yet, part of the development is being allowed in a zone that is not intended for residential use. These rules are being bent to yield just 8 affordable units out of this 226-unit community—that’s less than 4%! A similar scenario is playing out in Pemberton, where the Lakehurst Road Redevelopment site for 575 houses was slated to be given a 10% reduction in its affordable housing requirement. Devenney’s remarks come at an opportune moment for the Pinelands Commission to address these apparent conflicts between the PDC program and Affordable Housing: towns are currently preparing their plans for how to meet their “fair share” obligations for the next decade starting in 2025. This will be the “fourth round” of Fair Share Plans, which describes the process through which municipalities have their plans reviewed and approved by specialized judges.
The Fair Share Housing Act requires that municipalities coordinate the construction of a sufficient number of affordable housing units within their boundaries. However, it is becoming more difficult to find appropriate land as New Jersey approaches ‘build-out’. Affordable housing is often given the short end of the stick as late-comers to the development game are increasingly being left with less-than-ideal property options. In the case of South Toms River, a complex of 100% affordable housing units has been proposed to be built near to the town’s closed landfill. Although the township and developer claim that the landfill will pose no threat to the residents, this arrangement has the odor of environmental injustice. While the primary goal of the Fair Share Act is to ensure that everyone can afford good housing, every effort should be made to prioritize ‘inclusionary’ development plans. Inclusionary development integrates affordable housing into the community, rather than lumping affordable units together on less desirable sites that are potentially harmful to human health.
Zombie development proposals kept on life support for decades by Permit Extensions
PPA has been concerned about negotiations that the Pinelands Commission has been engaged with over a development in Egg Harbor Township since late last year. At issue: the developer argues that it should be exempt from the need to purchase PDC’s based on a dubious string of permit extensions stretching back to 2007. The PDC requirement was levied in connection to a fair share housing settlement, and now is ironically being shirked by a development that will have NO affordable housing units. Unfathomably, the Pinelands Commission acknowledges the flaws in the developer’s arguments, but is going to ‘let it slide’ by exempting most—if not all—of the development from the PDC requirement. According to a 2018 ordinance, this 657-unit development (all market rate) would be required to purchase 41 Pinelands Development Credits, which have been selling in 2022 for prices ranging from $17-25k. By turning a blind eye to the developer’s legal arguments, the Pinelands Commission is essentially giving the developer a $3.2 million gift that would have otherwise been put towards land preservation in the heart of the Pinelands. In exchange, this developer is running roughshod of every regulation and setting a very bad precedent for other developers who may wish to do the same.
In the 16 years since the plan was originally approved, our understanding of the environment and the ways in which we regulate development has changed substantially. It is not reasonable for a proposal to be kept on life support for this long; the courts have said as much in a similar case that involved an extension of just 10 years (D.D. Residential Ltd. Partnership v. New Jersey Pinelands). Regardless of whether their permit extensions are valid to avoid a PDC obligation, should the developer also be exempted from the statewide requirement to make a portion of their units available to low- and moderate-income families? We are seeing a widespread trend of developers ignoring this law, and municipalities just let them. The commission is holding leverage in this PDC dispute that should not be given away or compromised on.
Glimmers of Hope at the Municipal Level
We are continuing to dig into the question of what the Pinelands Commission can or can’t do on the topic of affordable housing. By erring on the side of caution, the Commission may be unnecessarily relinquishing its power. However, if the Commission’s hands are truly tied by the current laws, then we may pursue a legislative fix in Trenton. It is ideal to have important standards codified into law, and not left to the whims of whoever happens to be in power. In the meantime, municipalities have the power to modify their own ordinances to go beyond the bare minimum. Yesterday, Pemberton’s Planning Board made moves to create inclusionary housing zones where new developments over a certain size would be subject to 15-20% affordable housing set-asides (for renting and buying, respectively) with no exceptions. This is being done at a time when the town has technically already fulfilled its obligation to provide affordable housing. It is now up to the Pemberton Township Council to approve the ordinance and for other municipalities to follow suit!
Other Commission Updates:
Former Senator Nicholas Asselta was sworn in as the representative for Cumberland County to serve the remainder of the term that Jane Jannarone recently resigned from. We haven’t seen any movement from the Murphy administration to fill the latest vacancy for a gubernatorial appointee. Gubernatorial appointee Dr. Jessica Sanchez is still awaiting her nomination hearing before the NJ Senate Judiciary Committee (yet to be scheduled).
The Committee met on February 15: this was the first meeting of the committee since November 2022, but they didn’t have much progress to show for it. You can see our summary of the progress that the committee had made to date to amend the Comprehensive Management Plan to address climate change in this blog post. A group of graduate students from Princeton University has been working with PPA to provide a literature review and analysis that can support the climate goals of the Pinelands Commission. These students are coming from a diversity of fields, including atmospheric sciences, computational biology, renewable energy policy, as well as Ecology and Evolution. They plan to present their findings in a white paper by May of this year, which PPA will use to inform specific recommendations related to solar farm siting and no-net-loss of trees policies.
The Commission staff have made progress towards ‘green’-ing their own facilities and operations. However, they report that they are coming up against the national shortage in electric vehicles in their attempts to find an affordable option that meets the fieldwork needs of their science staff.