Anti-Poverty Network of New Jersey
Outline of Proposed New Jersey State Housing Policy
September 17, 2002

Lack of housing for New Jersey’s lower-wage workers and most vulnerable residents has reached a critical stage. This Anti Poverty Network plan calls on New Jersey to take steps to avoid serious labor shortages, prevent increased homelessness, and deter deeper housing segregation. New Jersey’s economy cannot grow and flourish without safe and decent housing that its workforce can afford. Such housing must be located close enough to New Jersey’s major sources of employment to ensure the journey to work is manageable. Similarly, New Jersey cannot flourish if its neediest and most vulnerable – those in poverty, those with developmental and other disabilities, those who are frail or homebound – do not have a housing safety net. New Jersey’s future is its children, and research has shown that children without safe and stable places to live face additional challenges in school, and are more likely to have health problems. Nor can New Jersey flourish it its housing patterns remain among the most intensely segregated in the United States.

The more than 100 organizations which comprise the Anti Poverty Network urgently call on Governor McGreevey and the New Jersey Legislature to forge a new state initiative and policy, a Workforce Housing Program which is:

• Comprehensive, tying together all of state government agencies and efforts, in partnership with private sector stakeholders such as employers, developers and lenders and

• Balanced, incorporating

  • both short term (next two years) and long term (through the next decade) components

  • rental assistance, production, home ownership, and preservation initiatives

  • choice as a major feature, facilitating residents’ mobility as they seek to move closer to job opportunities, and breaking down existing patterns of segregation

  • necessary and sufficient investment in the indicated initiatives to achieve success, recognizing that the long term costs of failing to invest (diminished economy; higher public assistance, law enforcement, corrections, remedial education, and public health costs; fractured families; poor child outcomes) far exceed the fiscal outlays required to support the investment

• Focused, setting clear numerical targets year by year, consonant with current housing needs and employment projections

New Jersey’s need for affordable housing has been apparent for decades. Numerous programs have been launched to address pieces of the problem. At no time has there been a comprehensive, multifaceted housing vision and policy originated by a governor, with the support of the Legislature, compelling all state agencies to work closely together in pursuit of clearly articulated goals.

Failure to achieve a comprehensive workforce housing program will make it far more difficult for employers to secure adequate workforces, especially for lower wage positions.

We call on the Governor to implement the first stages of this plan by October 1, 2002. New Jersey must initiate its workforce housing policy notwithstanding its current fiscal shortfall. Many of the required steps do not require financial outlays. Those that do must be treated with the urgency and priority they compel; failure to reenvision and recreate New Jersey’s housing structure causes a major drain on New Jersey economy, and this liability will grow sharply in the years ahead.

New Jersey can afford this investment. Census 2000 marks New Jersey as the wealthiest in the nation, with also, however, one of the highest costs of living and housing that is among the least affordable, creating a workforce unaffordability crisis. The time for action is now.

The Short Term (October 2002 through June 2004)

1.  Create an effective organizational framework.
   
   The Governor should immediately create a Governor’s Commission on Housing.
   
   The Commission should be directed to prepare and issue, by June 30, 2003, a report: (a) assessing the current and projected demand for Workforce housing through 2012, by region; (b) identifying and qualifying the economic and social costs of not meeting – and correlatively the benefits of meeting – projected workforce housing demand; (c) identifying primary ways for providing the needed housing, by regional and over time, and assessing the resources needed for same; (d) calculating the ultimate return on this investment: (e) separately assessing by region the current and projected housing needs for the most vulnerable (including people who are elderly, disabled or chronically homeless) – what can be described as the transitional or non-workforce housing need – analyzing the cost benefits of providing community-based housing alternatives as an alternative to institutional care, and identifying the means and resources required to produce these unequivocally necessary units.
    
2.  Immediate expansion of state rental assistance program.
   
   New Jersey has only a very small state rental assistance initiative; the major current rent subsidy program is federal Section 8. Rent subsidies are the only effective way to reach the lowest income residents (those with incomes below 50% of the median). A state subsidy program should be envisioned for most recipients as a bridge, until the recipients can receive federal Section 8 assistance. There needs to be an immediate infusion of at least $50 million. (See S454, introduced by Sen. Shirley Turner.)
    
3. Enact legislation creating a New Jersey multi-family housing tax credit program, in order to increase production of affordable housing (A1617/S552).
    
4. Strengthen and enforce anti-discrimination protections and support housing choice and mobility.

• P.2.2002, c.82, which incorporates a prohibition against discrimination based on income source into the Law against Discrimination, should be aggressively enforced by the Attorney General, in order to insure that holders of Section 8 vouchers and other subsidies are able to move to any area of the state.

• New Jersey should start a Regional Opportunity and Counseling (ROC) program of its own, modeled on and coordinated with and supplementing the federal program of the same name, to assist people seeking to relocate closer to areas with employment opportunities and other advantages.

• New Jersey should become “substantially equivalent” under the federal Fair Housing Act. Becoming substantially equivalent would demonstrate a commitment to civil rights enforcement and provide access to new sources of revenue.

• The special investigative unit within the Division of Civil Rights needs increased funding, including that which is made available to substantially equivalent jurisdictions, for state-sponsored testing and other actions necessary to ferret out discrimination.

• Through its development of the Qualified Allocation Plan (QAP), the state should aggressively promote both suburban and urban integration.

5. Reform administration of the federal Section 8 program in New Jersey.
   
   New Jersey’s federal Section 8 is administered by DCA and some 80 other public housing authorities (PHAs). This balkanization of administration is characterized by inefficient policies and procedures that – in conjunction with unlawful discrimination by private landlords – allow large numbers of vouchers to go unused at any given time despite overwhelming need. In order to address this situation, the state must:

• Promote consolidation of administration of section 8 programs to minimize inefficiencies and conflicting policies, or alternatively adopt state legislation setting certain performance standards and authorizing DCA to oversee operations of these authorities.
   
• Exercise its influence to persuade all PHAs to raise their “payment standards” to the maximum allowable level. As a first step, PHAs should set their payment standards at 110% of the applicable HUD fair market rent (FMR), an increase that does not require HUD approval. PHA applications to HUD for permission to raise payment standards to 120% of the FMR should be encouraged in appropriate areas. Raising payment standards will promote the use of Section 8 vouchers in wider geographic areas by making a greater number of apartments economically accessible to voucher holders. At the same time it will not diminish the number of Section 8 vouchers available given HUD’s policy regarding continued reimbursement. See PIH Notice 2002-6.
   
• Reform the method by which DCA determines the allocation of Section 8 certificates so that they are distributed based upon need, while ensuring that residency preferences or other measures do not have the effect of delaying or denying admission based upon race or ethnicity.
   
• Increase efficiencies in the processing of Section 8 contracts by streamlining the inspection and contract approval processes. One step in this direction would be the creation of a task force of landlords, public housing authority representatives, tenants, and advocates focused upon means to improve utilization.
   
• Require by state law that information concerning the re-opening of Section 8 waiting lists is provided in advance to all organizations serving people who are disabled, elderly or severely disadvantaged.

6. Reform and improve implementation of Mt. Laurel and the operation of COAH. Necessary actions include:

• Prompt issuance of the third-round COAH rules, with immediate promulgation of interim rules that insure fair-share housing obligations are met.

• Development of initiatives that enable non-profits to become more involved in the enforcement of Mt. Laurel obligations.

• Encouragement of commercial growth as an integral part of Mt. Laurel implementation.

• An increase in the cost of Regional Contribution Agreements (RCAs) from $25,000 per unit to $40,000 per unit, with subsequent increases indexed to inflation.

7. Act aggressively to protect low-income homeowners from predatory lending practices through the enactment of strong legislation and improvement of regulatory and examination procedures.
    
8. Expand funding for the NJRA “brownfields” grant program, and specifically authorize use of such funds for affordable housing projects.
    
9. The state must take strong steps to preserve existing, privately-owned affordable housing, including aggressive enforcement by DCA of its 55:16 authority.
    
10. Create a state-funded preservation program:

• Appropriate $1 million to the Department of Community Affairs for the purpose of providing operating grants to entities that will further housing preservation in their communities through activities such as acquisition of rental property, management of rental property, provision of technical assistance and training to property owners, and property receivership.

• Create a $25 million loan program through HMFA from its reserves for refinancing or moderate rehabilitation of privately owned multifamily rental housing. Priority would be for projects of less than 30 units in neighborhoods serving low-income families. With an average loan of $20,000 per unit, and average state participation of 50%, $25 million program would help rehabilitate 2,500 affordable rental homes.

• Create a $15 million multifamily receivership loan program through HMFA from its reserves to enable court-appointed receivers of distressed rental properties to correct code violations and make other needed repairs, in order to preserve properties as sound rental housing for low income households.

11. Actively promote the Section 8 Homeownership program, especially for those with the lowest incomes.
     
12. Enact bills improving and strengthening the receivership laws (S1676/A2539) and facilitating the restoration of abandoned properties to decent, affordable housing. (S1675/A2543)

The Longer Term

Not all necessary housing needs can be addressed within the 20-month short-term framework, both because of the fiscal implications and because major structural, systemic changes are necessary. Consequently, in addition to short-term initiatives, New Jersey must adopt a long-term housing strategy which emphasizes preservation and production in addition to rental assistance. Among other actions, key steps and pilot programs include:

13. Expansion of the Balanced Housing Program
    
    New Jersey’s only permanent program to build or renovate affordable housing must be expanded significantly, by generating at least an additional $30 million per year through realty transfer fees and other sources. Assisted projects should have permanent affordability controls.
     

14. Charge HMFA with clear responsibility for supporting affordable housing projects.
     

15. Fully fund the legislative initiative creating a New Jersey multi-family housing tax credit program, in order to increase production of affordable housing.
     

16. New Jersey should start a Regional Opportunity and Counseling (ROC) program of its own, modeled on and coordinated with and supplementing the federal program of the same name, to assist people seeking to relocate closer to areas with employment opportunities and other advantages.
     

17. Promote employer assisted housing through pilot initiatives.
    
    Financial, tax and related incentives should be used to promote employer-assisted housing for low-wage workers. For example, UEZ funds could be used to match zone business contributions for worker housing. Rental assistance could also be earmarked for the employees of participating firms by creating “employer based” vouchers.
     

18. Enact bills improving and strengthening the receivership laws (S1676/A2539) and facilitating the restoration of abandoned properties to decent, affordable housing. (S1675/A2543).
     

19. Implement innovative funding mechanisms for housing production, such as creation of a State Housing and Development Bank.

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