U.F. may make affordable housing a developer's issue
BY JANE MEGGITT
Staff Writer

UPPER FREEHOLD - Township developers may soon have to build one affordable unit for every eight market-rate units in their new subdivisions.

Township Planner Mark Remsa reviewed a draft of a new growth share ordinance that deals with state Council on Affordable Housing (COAH) requirements at the Jan. 18 Township Committee meeting. The governing body may vote to introduce the ordinance at its Feb. 1 meeting.

While the township planned to address its affordable-housing requirements with land on Breza Road that the New York City-based Rockefeller Group said it would donate to the township for the cause, that is no longer an option, as the developer withdrew its application to develop the rest of the tract.

Remsa explained that COAH rules changed two years ago, and the township is required to provide one affordable unit for every eight market units constructed. Nonresidential construction has to generate an affordable unit for every 25 jobs it creates.

Remsa said that institutional developments such as schools and churches also generate affordable-housing units based on the number of jobs they create.

COAH has a chart indicating how many jobs should be created by the square footage of nonresidential space. For example, the chart states that warehouses generate fewer jobs per square foot than office buildings.

In the past, Remsa said the township collected an affordable-housing fee from developers. In his view, the community has taken on the burden of the affordable-housing issue while giving developers relatively light requirements.

"[The developer] could build all market-rate units," he said. "You [the township] collected the fee and figured out where the unit would go."

Upper Freehold has transferred some of its required affordable-housing units to Neptune through a Regional Contribution Agreement (RCA), but Remsa said the township is close to the limit of affordable units that it can transfer out of town.

"With this ordinance, you get out of the affordable-housing business, unlike today," he said.

The new ordinance would put the affordable-housing burden back on the developer, according to Remsa. While developers would be required to provide one affordable unit for every eight market-rate units, any leftover fractional shares would allow the developer to pay a fee. The fee to the town would be based on a fraction of the value of the unit.

According to Remsa, the fee generally amounts to 1 percent of the assessed value of a residential unit, and 2 percent of nonresidential properties. He said that COAH allows payments in lieu of such fractional units, but the township would have to construct the actual unit.

As stated in the ordinance, when developers build fewer than eight units, they must pay a fee, he said.

Commercial developers in the community commercial, village neighborhood or highway development zones must build units in their projects, he said. Those building in the general industrial or research/office/manufacturing zones would pay a developer's fee, he said, as the nature of their uses is different.

Mayor Stephen Fleischacker said requiring affordable-housing units to be built in certain commercial zones could deter certain ratables from moving into town. He said that making someone with a potential commercial ratable build a flat over their project could ruin the project.

"You have to weigh it," Remsa said. "Will you scare away potential nonresidential development or take on affordable housing?"

Committeeman David Reed said, "I wouldn't want to scare businesses out of here."

The current COAH cycle lasts until 2014, according to Remsa.

Township Administrator Barbara Bascom said that the township submits annual reports to COAH concerning developer's fees and affordable-housing activity.

Remsa said that COAH reviews how well the market reacts to the estimated growth share numbers. When the housing market is poor, growth share numbers go down, he said, but when it is good, the opposite happens.

According to Remsa, those who qualify for affordable housing make between 50 and 80 percent of the area's median income.

Half of the affordable units must be rental housing, he said, and 25 percent of them may be age-restricted.

For those units the township must build, the burden is finding land, getting an affordable-housing developer and financing, according to Remsa.

An affordable-housing project is never fully funded by developer's fees, Remsa said but there may be tax credits, grants or below-market-rate financing available.

Under current zoning, one- or two-family COAH units could be built on a 1 or 2 acres using the township's cluster option, but a three- or four-family unit must be on 6 acres, or 2 acres with the cluster, he said.

An assisted-living facility could qualify as COAH housing if some of its residents are restricted to low and moderate income.