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January 30, 2008

Affordable Housing Update: Clarifications




Dear Mayor:

The League has been in discussion with Council on Affordable Housing (COAH) on the formula to determine what your municipality’s affordable housing obligation, pursuant to recently proposed regulations by COAH.

To clarify, COAH has provided the following example, which we provide verbatim:

“The proposed rules establish household and employment growth projections for towns to utilize in planning for their affordable housing obligations.  The projections are incorporated for each municipality in the report “Allocating Growth to Municipalities” in Appendix F of the proposal.  The projections are intended to be used as a planning target.  Municipalities must zone or otherwise plan to create a realistic opportunity to address the affordable housing need derived from the housing unit and employment projections.  The actual affordable housing obligation and resulting requirement to build or otherwise provide affordable units, is based on actual growth (certificates of occupancy issued) since 2004.  For every four market-rate units constructed one affordable unit must be provided.  For every 16 jobs created, based on new or expanded non-residential construction according to proposed Appendix D, one affordable unit must be provided.

Example: Municipal Affordable Housing Obligation Based on COAH Projections

When using the household and employment growth projections established by COAH, the projected growth share obligation pursuant to N.J.A.C. 5:94-2.4 would be as follows:

The municipality has a household projection of 75 units and an employment projection of 48 jobs.

Residential growth share obligation: 75 units / 5 = 15 affordable units

Non-residential growth share obligation: 48 jobs / 16 = 3 affordable units

Total growth share: (15 + 3) = 18 affordable units

The growth share obligation, along with a prior round obligation of 30 units and a rehabilitation share of 22 units, comprise the municipality’s 1987-2018 fair share obligation.

Throughout the course of its substantive certification, the actual growth share obligation would be determined based on actual growth taking place in the municipality.  For the residential obligation, there would be an obligation of one affordable unit for every four market-rate units constructed.”

The regulations were published this week in the New Jersey Register, which commences a 60-day comment period, which extends to March 22.  More information on the regulations, including the public hearing schedule, is available online at:

Furthermore, we recently received an inquiry from a member municipality asking whether they should pass a new growth share ordinance based on the proposed regulations.  They were relying on COAH’s letter of December 24.   The town’s inquiry was specifically based on this language in the COAH letter:

“Growth Share Ordinances -- Municipalities are encouraged to adopt revised inclusionary zoning ordinances (commonly known as “growth share ordinances”) to maximize opportunities for affordable housing as soon as possible…”

While we encourage municipalities to capture affordable housing opportunities where possible, it is the League's opinion that any new growth share ordinance (or any one passed after January 25, 2007) will likely be immediately challenged, likely by a developer, and would result in the municipality expending tax dollars to defend the ordinance.  It is our opinion that no authorization exists for a growth share ordinance under the proposed regulations as they do not have the force of law.  Again, the stay from the Appellate Division protects only Growth Share Ordinances that were adopted prior to January 25 of last year.

Questions on this correspondence can be directed to Mike Cerra at or 609-695-3481 x120.


                                                                        Very truly yours,


                                                                        William G. Dressel, Jr.
                                                                        Executive Director





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