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    New Jersey State Senate Passes Bill S-1

    June 11, 2010


    Red Bank - On June 10, 2010, the New Jersey State Senate passed Bill S-1 that proposes to abolish the council on Affordable Housing (“COAH”) and revamp how municipal compliance with affordable housing obligations will be established. Bill S-1 has been amended slightly from its prior version so as to incorporate some of the proposals in the Housing Task Force Report prepared for the Governor. The next step is for Bill S-1’s companion bill in the State Assembly, Bill A-2057, to go through the legislative process.

    There are many moving parts with Bill S-1, however, key aspects are as follows:

    • COAH would be eliminated within 6 months of the effective date and its powers transferred to the Department of Community Affairs.

    • All municipalities would be required to set-aside 10% of the units in any residentialdevelopment of 5 or more units for affordable housing. All residential development offewer than 5 units would have a 5% set-aside (presumably, through a payment in lieu ofconstruction on the fractional obligation).

    • A municipality that meets certain benchmarks, such as 7.5% of its housing stock price being restricted or 33% of its housing stock comprised of single-family attached, mobile homes or multiple dwelling units, will be deemed an “inclusionary municipality.”

    • Municipalities would not have to address any Prior Round unmet need.

    • Non-residential development fees would be eliminated (there is presently a moratorium on the fee for projects that receive preliminary or final approval prior to July 1, 2010).

    • Regional Contribution Agreements (RCAs) would still be prohibited (an earlier version of Bill S-1 permitted RCAs until December 31, 2011).

       

    There is no doubt that from an affordable housing compliance standpoint, Bill S-1 is favorable to municipalities. In April 2010, the Office of Legislative Services issued a legal opinion that Bill S-1 (as then proposed) “may be susceptible to a constitutional challenge” since the Bill uses a numberless approach towards affordable housing compliance without regard to allocated regional need. It does not appear that the amendments to Bill S-1 necessarily change that opinion.

    Giordano, Halleran & Ciesla, P.C. is a multi-specialty law firm dedicated to providing sophisticated, complex legal services and solutions. The attorneys maintain personal relationships and gather in-depth knowledge of clients’ businesses and industries to construct both sound legal advice and effective strategies to resolve business issues. With a focus on responsiveness and producing results with outstanding value to their clients’ bottom line, the firm provides experienced legal representation in a wide variety of practice areas, including: Corporate and Business; Creditors’ Rights and Bankruptcy; Environmental; Healthcare; Intellectual Property and Technology; Labor and Employment; Litigation; Real Estate, Land Use and Development; and Trusts and Estates. For more information, visit us at www.ghclaw.com.
    Tags: Craig M. Gianetti, Real Estate, Land Use & Development, COAH

    Posted in: Real Estate and Affordable Housing