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Housing New Jersey’s Workforce:
Instituting A New Jersey State Housing Policy
Anti-Poverty Network
of New Jersey
June 2003
Introduction
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. Failure to achieve a comprehensive workforce housing
program will make it far more difficult for employers to secure the
workers they need, especially for lower wage positions. Such
housing must be located close enough to New Jersey’s major sources
of employment to ensure that 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 if its housing
patterns remain among the most intensely segregated in the United
States.
The
more than 150 organizations that comprise the statewide 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;
- Balanced,
incorporating
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rental assistance, production, home ownership, and
preservation initiatives
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choice as a major feature, facilitating residents’ mobility
as they seek to move closer to job opportunities, and breaking down
existing patterns of segregation
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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
-
awareness of what can be accomplished immediately,
notwithstanding New Jersey’s budget crisis, and what will take
longer to complete; and
- 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.
We call on the Governor to begin to implement this plan
immediately. New Jersey must initiate its workforce housing policy
notwithstanding its current fiscal shortfall. This policy is a
critical part of “smart growth”; as New Jersey moves to utilize
appropriate planning principles that combat sprawl, it must ensure
that the housing production which does occur increases the supply of
housing for those lower wage workers critical to our economy, as
well as vulnerable households and individuals, all of whom are
increasingly priced out of the housing market. Failure to
re-envision and rebuild New Jersey’s housing infrastructure causes a
major drain on New Jersey’s economy, and this liability will grow
sharply in the years ahead. We understand that all necessary
housing needs cannot be addressed within a short-term framework,
both because of the fiscal implications and because major
structural, systemic changes are necessary. Rental assistance is an
immediate need, to prevent homelessness, family instability, and
loss of our workforce. Preservation and production are long-term
commitments which must command attention for the foreseeable
future. Many of the following initiatives can be fully implemented
in a short period of time, and work on all of them can at least be
commenced without delay.
New Jersey can afford this investment. Census 2000 marks New Jersey
as the wealthiest state in the nation. With that wealth, however,
comes one of the highest costs of living and housing that is among
the least affordable, creating a workforce housing unaffordability
crisis. The time for action is now.
A Brief Overview Of The Need
The
accompanying report by Legal Services of New Jersey’s Poverty
Research Institute details New Jersey’s housing affordability
crisis. A brief overview conveys the urgent need for a
comprehensive state government response.
For at least 40 years, New Jersey has been in the throes of a severe
housing shortage, an increasing squeeze of unaffordability, a crisis
that has been repeatedly recognized, but never fully addressed, by
the Governor, the Legislature and the Courts. The housing landscape
today, for the low-wage earners that make up half the workforce –
not to mention disabled people, lower-income seniors, and workers in
transition – is especially bleak. The gap between the number of
low-income households and the supply of homes they can afford has
widened alarmingly: there are far more low-income families than
there are affordable units. In the 30 years since the first Mt.
Laurel case, fewer than 30,000 affordable homes and apartments have
been produced in New Jersey, only a fraction of the need.
New Jersey is the third most expensive state in the nation where
housing is concerned; it is the most expensive state for
rental housing. A family needs an income of $39,000 to be able to
afford a two-bedroom apartment at the fair market rent of $980. And
even if they have the money, it is growing ever more difficult for
families to find an apartment renting for this amount – or, in too
many cases, even to find an empty apartment at all. At the same
time, buying a home has grown so costly that low-wage workers are
literally being squeezed out of the market entirely. The confluence
of high rents, high prices and low incomes has produced an
ever-growing stream of housing poverty (not enough to live on after
paying the rent), over-crowding, displacement, and homelessness.
Section 8 vouchers and other work supports that could provide
substantial assistance to the struggling households confronting this
personal housing crisis are in woefully short supply: only 3 out of
10 eligible families can obtain a Section 8 voucher – the voucher
waiting lists maintained by the more than 80 Housing Authorities in
New Jersey are almost all several years long. DCA – one of those
Housing Authorities – has 20,000 households on its list, a number
that would be much higher were the list not effectively closed to
new applicants.
The housing crisis in New Jersey is not an abstraction. It affects
thousands of children, adults and families. Nor are its effects
limited to those struggling to find or maintain a place to live.
Workforce housing – affordable housing – is critical to NJ’s
economy. If there is no place for low-wage workers to live –
nursing home workers, home health aides, child care workers and so
many others – there will not be enough workers to keep the economy
going, let alone provide the basic services we depend upon.
Moreover, living in substandard housing has been linked to serious
outcomes for children: disease, injury, malnutrition, educational
failure, behavioral problems, broken homes, physical and emotional
stress, homelessness. The short and long-term costs of these
problems deeply affect not just the children and families that
experience them, but also our communities, our society, all of us.
The Steps The State Must Take
1.
Recognize the housing affordability crisis and create an
effective organizational framework to respond.
The Governor should promptly issue an
executive order which declares New Jersey’s housing affordability
shortage and creates a Governor’s Commission on Housing.
The Commission should be directed to prepare and issue, within 6
months of its creation, 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 region 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.
Immediately expand the 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.
The substantive changes needed to implement most aspects of this
proposal can be accomplished administratively. Where legislative
action is needed, it should be commenced immediately.
3.
Build more affordable housing for low-wage workers.
Within the framework of sound planning
principles, significantly increase the construction and renovation
of housing for low-income workers and households, and make the
actual production of at least 5,000 workforce dwelling units –
without resort to the builders’ remedy – an annual obligation of
state government until the overall need is met. Initiatives that
would facilitate achievement of this goal include:
·
Enact and fully fund legislation creating a New
Jersey multi-family housing tax credit program, in order to increase
production of affordable housing.
The federal housing tax credit program has become the primary
means of producing new affordable housing units. New Jersey should
join the several other states that have created state-funded tax
credit programs in order to provide additional workforce units.
·
Expand 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 increased realty transfer
fees and other sources. Assisted projects should have permanent
affordability controls.
·
Charge the New Jersey Housing and Mortgage Finance
Agency (HMFA) with clear responsibility for significantly expanding
the supply of housing affordable by low-income workers and other
low-income households. HMFA should continue to aggressively
pursue current and proposed financing initiatives that would focus
on providing housing units for low-income workers households, as
well as the disabled and others who are unable to work.
·
Promote employer- and union-assisted housing for
lower-income workers through appropriate initiatives.
Financial, tax and related incentives should be used to promote
employer- and union-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.
·
Expand funding for the NJRA “brownfields” grant
program, and specifically authorize use of such funds for affordable
housing projects. Currently, grant funding is not available to
facilitate the development of affordable housing on cleaned-up
“brownfields” locations. This policy should change so that
affordable housing can become a prioritized use for such sites once
they are made safe for residential use.
4.
Take strong steps to preserve existing, privately owned
affordable housing.
·
DCA must aggressively enforce its statutory
authority (N.J.S.A. 55:16) to maintain affordable rents in
housing developments that have received substantial tax abatements.
·
New Jersey must create a state-funded preservation
program:
o
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 and management of rental property,
provision of technical assistance and training to property owners,
and property receivership.
o
Create a $25 million loan program from HMFA reserves
to finance moderate rehabilitation of privately owned multifamily
rental housing. Priority should be given to 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%, a $25 million program would help rehabilitate 2,500 affordable
rental homes.
o
Create a $15 million multifamily receivership loan
program, using Balanced Housing funds or HMFA 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.
5.
Strengthen and enforce anti-discrimination protections and
support housing choice and mobility.
·
P.L.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, and the New Jersey Division on Civil Rights, 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, 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.
·
The current legislative and administrative efforts to
have New Jersey become “substantially equivalent” under the federal
Fair Housing Act should be implemented as quickly as possible.
Becoming substantially equivalent will 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 federal funds 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 racial integration
in both suburban and urban areas.
6.
Reform administration of the federal Section 8 program in
New Jersey.
New Jersey’s federal Section 8 vouchers are 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.]
·
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 be provided in advance to all
organizations serving people who are disabled, elderly or severely
disadvantaged.
7.
Reform and improve implementation of Mt. Laurel
and the operation of COAH.
Necessary actions include adoption of the following rules and
requirements:
·
Every municipality must be required to prepare, adopt
and obtain COAH or court certification of a housing element and fair
share plan. Municipalities that fail to do so must be ineligible to
receive any discretionary state aid until they comply with this
mandate.
·
A municipality's fair share housing obligation should
be the greater of the COAH-generated number or 20% of the
municipality’s new growth – residential, commercial and industrial.
Replacement housing should be considered new growth.
·
No municipality should receive more than one unit of
credit toward satisfaction of its fair share obligation for each
housing unit provided as a result of implementation of its housing
element and fair share plan. Rental housing must constitute at
least 33% of the housing element of every municipal fair share
plan. At least 30% of this rental housing must be apartments of 3
or more bedrooms to address the needs of large families.
·
At least 25 percent of all new low- and
moderate-income units provided as a result of a municipality's
implementation of its housing element and fair share plan must be
affordable by very-low-income households (households with income
equal to or less than 30% of area median income).
·
At
least 20% of each housing development built as part of a Court- or
COAH-ordered builders' remedy must consist of units affordable by
low- and moderate income households.
8.
Actively promote the Section 8 Homeownership program,
especially for those with the lowest incomes.
The potential benefits of
homeownership are significant – increased security and stability,
coupled with the likelihood of accumulating some “wealth” as a hedge
against future hard times and a stepping-stone out of poverty. The
federal Section 8 Homeownership program enables households to
convert their rent subsidies to mortgage payments and become
homeowners. Effective implementation of this program will enable
low-wage workers to establish stable, long-term residence near their
jobs. It will also help low-income seniors and the disabled achieve
a significant measure of security and peace of mind.
9.
Enact legislation improving and strengthening the
receivership laws;
and facilitating the restoration of abandoned properties to decent,
affordable housing.
Pending legislative proposals would
enable municipalities to return abandoned buildings to meaningful
use as much-needed affordable housing for low-wage workers and
households, and empower communities to prevent deterioration and
abandonment of at-risk buildings through enhanced receivership
powers.
10.
Act aggressively to protect low-income homeowners from
predatory lending practices through the enforcement of current law,
active monitoring of lending practices, improvement of examination
procedures, and adoption of additional remedial measures as
necessary.
New state legislation provides additional tools which, when combined
with existing law, expand consumer remedies. This new statute must
be enforced, and lending practices must be monitored closely to see
whether predatory lending continues. If it does, additional
remedies will have to be crafted.
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