Vol. 1 Issue 8

• 50 years ago there existed a crippling national housing shortage that forced families to double up with relatives or take their chances in dangerous, substandard dwellings.

• The Federal Housing Act of 1949 was Congress’ attempt to alleviate this shortage. Their goal was to secure “a decent home and suitable living environment for every American family.”

• The law and initiatives that followed put government at the very center of the housing business and created livable rental units for poor and working-class people.

• Federally backed mortgage programs made homeowners out of millions who would otherwise have spent their lives among the rent-poor.

• In terms of the wealth they created and the communities they stabilized, the federal housing laws were among the most crucial initiatives of the 20th century.

• In the 1980’s, the Reagan administration cut funding for the construction of low- and moderate-income housing and revised the tax structure in a way that made affordable multifamily units less attractive for investors to build. As a result, the housing shortage facing the country today is nearly as severe as the one that spurred Congress to act just after WWII.

TODAY

• The scope of this crisis was laid out this spring in a bipartisan report by the Millennial Housing Commission, a 22-member panel appointed by Congress.

• The main problem: not enough housing is being built to meet demand, forcing prices up all across the spectrum.

• In New Jersey, the latest Census figures illustrate a significant mismatch between the type of housing being built and housing needs. While the number of luxury homes with eight or more rooms, excluding bathrooms, rose by 127,000 units in the past decade, the typical three-bedroom home grew by only 11,000 units, forcing people to double up. The number of crowded households (more than 1 resident per room) is estimated to be 154,000, a 42% increase in the past decade. The number of severely crowded households (more than 1.5 residents per room) leapt 74 percent.

• For very low-income people in the state, the problem is worse. A minimum wage worker would have to work 139 hours per week in order to afford the fair market rent for a two-bedroom apartment. 40% of renter households cannot afford their rent. There are over 9,000 families on the statewide Section 8 waiting list; 80% are families with children. The Trenton Board of Education has seen a rise of 370% in homeless children in the last ten years. Public funding for homeless services has essentially stayed the same during that period.

MILLENNIAL HOUSING COMMISSION RECOMMENDATIONS:

• Create or build mixed-income developments where the lowest-income families would make up only a small part of the total residence. The commission cautioned against repeating the mistake of segregating the poor in housing projects.
• Direct subsidies to states and localities, regarded as the most efficient tool for stimulating production of affordable housing, which could then administer both for-profit and nonprofit building programs.
• Develop 150,000 new units of permanent supportive housing over the next ten years.

WHAT ELSE:

• The House and Senate are both debating the creation of a National Housing Trust Fund, fueled by the profits that the government now reaps from its mortgage programs. Instead of funneling that money to the Treasury, the trust fund would put it to work to preserve, rehabilitate, and build affordable housing across the country.

• The Bush administration is unenthusiastic about setting aside government revenues for only one purpose. The Secretary of Housing and Urban Development recently described the housing shortage as a local problem.

In response to the severe shortage of affordable housing in NJ, Assemblywoman Bonnie Watson Coleman (D15), Senate President Richard James Codey (D27), and Senator Robert W. Singer (R30), are sponsoring two companion bills that will help preserve housing and revitalize neighborhoods:

S1676/A2539: PRESERVATION BILL:

Strong tools are needed to help municipalities and other interested parties intervene when multi-family rental housing has deteriorated to the point that it provides substandard housing – both to protect the health and safety of tenants and neighborhoods, and to prevent eventual abandonment. Passage of this legislation would promote the preservation of at-risk affordable housing by:

• Allowing tenants, neighborhood-based organizations, and lien holders to bring receivership action which means that they could take the property into custody, pending litigation. (Under current law, the municipality is the only entity that can bring receivership action);

• Broadening the grounds for receivership to include a pattern and practice of code violations, as well as repeated criminal and drug-related activities (Current law limits the ground for receivership to specific immediate violations);

• Providing financial assistance and incentives for property owners to preserve their buildings as affordable;

• Passing a strong, effective receivership law that will allow distressed occupied properties to be run by experienced property managers.

S1675/A2543: ABANDONED PROPERTIES BILL:

Many properties in New Jersey’s urban areas have been abandoned or are at risk of abandonment by their owners. These properties contribute to chronic disinvestment, provide a haven for illegal activity, destabilize neighborhoods, and erode the state’s stock of residential and commercial structures. The difficulties in obtaining clean title to these properties and assembling them for redevelopment constitutes one of the most serious barriers to urban revitalization in NJ. Passage of this legislation would return abandoned and at risk properties to productive use. Components would include:

• Provisions to accelerate the abatement of nuisance conditions. This would allow a municipality to seek an order from Superior Court requiring the owner to demolish or stabilize an unsafe property within 14 days. If the owner fails to comply, the municipality can return to court to obtain title, extinguish all liens other than governmental, and proceed with demolition;

• Allow a municipality or qualified receiver to gain possession of a property and borrow funds for purposes of rehabilitation;

• Promote the creation of municipal land reclamation agencies so that each municipality can give one entity the ability to address property acquisition and disposition issues; and

• Create a pilot program for offering incentives for homesteading of abandoned properties in targeted neighborhoods.

Both pieces of legislation were introduced in June of this year and need to be posted for review and vote by the Assembly Housing and Senate Community and Urban Development Committees before referral to Assembly and Senate Appropriation Committees. Other than the $5 million needed for the pilot program, no funds are needed to implement these bills.

By enacting this legislation, NJ could have one of the most comprehensive strategies for preserving affordable housing and revitalizing distressed neighborhoods in the country.

NEW JERSEY SUPREME COURT REAFFIRMS THE MOUNT LAUREL DECISIONS

In a series of three decisions in July, the New Jersey Supreme Court upheld the twenty-seven year old decision that towns are obligated to allow for the construction of affordable houses, thereby increasing a buyers’ odds of finding a place to call home. In these decisions the court recognized that New Jersey’s future depends on providing homes for all.

As the original ruling intended, Mount Laurel houses are built for people in government service, retail industries, and workers on assembly lines and job sites – people who are working hard but whose salaries aren’t keeping up with the prices of homes in NJ.

The doctrine was created because many towns used zoning to exclude low- and moderate-income groups from their neighborhoods.

The Mount Laurel rulings – named for the township that was the original defendant in the series of affordable housing cases– established a constitutional obligation on the part of towns to craft zoning ordinances that allowed for the construction of affordable homes.

MIKE MARKS TAKES A STAND

Our thanks to Mike Marks, a volunteer with the ICE Self Help Center run by the Mental Health Association of Atlantic County. In an effort to increase awareness of the side effects and some of the dangers of psychiatric medications, Mike met with AtlantiCare to convince them to provide this information in all their waiting rooms. AtlantiCare was uncomfortable with the request and offered a compromise - AtlantiCare has agreed to remove all drug company ads and promotional items in waiting rooms throughout their system. We salute Mike’s resolve and ability to convert a defeat into a victory.
 

Join MHANJ’s Legislative Network! Contact
C. Chin at 973.571.4100 Ex. 37  or cchin@mhanj.org