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June 10, 2008

Urgent Legislative Alert: Affordable Housing/A-500—S-1783



Dear Mayor:

Yesterday, S-1783, sponsored by Senator Lesniak, which previously imposed a 2.5% commercial development fee, was approved by the Senate Budget and Appropriations Committee.  The bill, however, was amended by the Committee to make it similar to Assembly Speaker Joseph Roberts’ A-500

The bill was added to the agenda on late Friday afternoon, so there was not much time to alert our membership to come and testify on this issue.   The League testified in opposition to the bill. Tuesday’s Star-Ledger and Courier Post provide summaries.

In our statement, the League highlighted three major concerns with this legislation.  First, it eliminates regional contribution agreements (RCA) as a compliance mechanism. 

Second, it relieves the commercial development community of their financial obligation, but does not reduce the obligation of the municipality to provide affordable housing units resulting from the commercial development and thereby shifts a larger burden to the property tax

Third, it siphons off a portion of the commercial development fee so that the fund will now not be able to subsidize the 19,200 units originally estimated by Department of Community Affairs.  This is because $20M of the $125M is being diverted to replace RCA funding.  The result is that now only 16,100 units of the 46,000 unit need will be financed by commercial development fee.  At $160,000 to subsidize a unit (according to COAH) times the 30,000 unit shortfall, this potential funding shortfall is $4.8 Billion through 2018.   Since there is no other identified funding source, it appears as if the property taxpayer will be compelled to make up the difference.  

The bill was also amended by the Committee to exempt development in 19 “transit villages” from paying the commercial fee.   We note, however, that such development will still generate growth share obligations, and without the funding.  The bill was also amended to add language regarding vacant land analysis and open space.  Presumably, this is to discourage growth in environmentally sensitive areas.

Both bills now stand at 2nd reading in their respective houses. We anticipate that the full Assembly will vote on A-500 next Monday, June 16.  The Senate can then follow shortly.  For the reasons outlined above, we suggest immediately contacting your Assembly representatives and State Senator and ask them to oppose A-500 and S-1783.    

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


                                                                        Very truly yours,


                                                                        William G. Dressel, Jr.
                                          Executive Director



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