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June 17, 2008


Dear Mayor,

Yesterday, the General Assembly passed A-500, by a vote of 44 in favor, 34 opposed and 2 abstentions.  A-500 now joins its companion, S-1783, and will likely be scheduled for a vote by the State Senate next Monday, June 23.

The League maintains its opposition to A-500, for the following reasons:

  • A-500/S-1783 eliminates a voluntary, affordable housing compliance mechanism, regional contribution agreements, and provides no incentives for the provision of affordable housing.
  • The bill establishes a 2.5% statewide commercial development fee, which relieves commercial developers of their housing obligation.   It does not, however, relieve property taxpayers. OLS now estimates that this fee will generate revenues of $163 million, which we estimate could provide 50% subsidies for approximately 25,000 housing units.    

      COAH projects 46,000 units to be generated by commercial development between now and    2018, and we have to receive an answer as to how the State intends to offset this funding           shortage.   We can only presume that taxpayers will be compelled to provide this offset.   

  • The revenues from the commercial fee will be diluted by $20 Million set aside to offset RCA funding, and for a number of exemptions provided to transit villages and other transportation hubs.   The OLS estimate does not take these into account.   (We note that previously DCA estimated to us that the commercial fee would generate $125 million in revenues, and that OLS previously was unable to determine the financial impact of A-500
  • 274 municipalities have an affordable housing trust fund.  A-500/S-1783 allows the State to seize funding that is not committed within four years.   
  • A-500/S-1783 creates a new State Housing Commission.  We fail to see how the creation of additional layer of government will provide any better guidance from the State on affordable housing policy.

We recommend contacting your State Senator immediately on this bill.   Please copy the League on your correspondence, either by fax to 609-695-0151 or by e-mail to

Very Truly Yours,

William G. Dressel, Jr.
Executive Director


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