New Jersey Council on Affordable Housing (COAH) Releases Its Long-Awaited Regulations
On April 30, 2014, COAH finally released its third iteration of the Round Three affordable housing regulations ("Proposed Regulations"). The Proposed Regulations are now available on COAH's website.
As in the past, COAH's Proposed Regulations assign municipalities their affordable housing obligations and confirm that municipalities who submit to COAH's jurisdiction will be protected from builder’s remedy lawsuits. However, there are many new features to COAH's Proposed Regulations as well.
For example, although a municipality's Affordable Housing Obligation still consists of three components, those three components are now a Rehabilitation Share (addressing the number of deficient units occupied by affordable households within the municipality), the Unanswered Prior Obligation (essentially covering the remaining obligation from 1987-2014) and the Fair Share of Prospective Need (projecting the need from 2014-2024).
Unlike the methodologies of the past which provided a complete menu of compliance techniques for satisfying the Affordable Housing Obligation, the Proposed Regulations focus on inclusionary zoning as the preferred means of satisfying the Affordable Housing Obligation. Other techniques, such as "market to affordable" programs or accessory apartments, are available only where a municipality has insufficient land capacity.
The Proposed Regulations also establish a 10 percent set-aside for inclusionary development, subject to appropriate adjustments. This set-aside requirement is less than the standard 20 or 15 percent set-aside required by the Round Two regulations (depending on whether the units were for-sale or rental, respectively), and less than the 25 percent set-aside required in certain circumstances under the now invalidated "growth share" regulations adopted in 2008. The Proposed Regulations also require an Economic Feasibility Study to accompany inclusionary zoning ordinances.
The Proposed Regulations will be published in the June 2, 2014 New Jersey Register, commencing a 60-day public comment period. It is anticipated that the Proposed Regulations will be effective upon publication in the November 17, 2014 New Jersey Register.
In the upcoming months, all of the stakeholders in the affordable housing arena will be scrutinizing the Proposed Regulations and submitting comments to COAH in an attempt to advance their particular interests. Municipalities will seek to ensure that the Proposed Regulations do not impose unfair burdens within their borders. Affordable housing advocates will seek to ensure that the statewide need is not diluted. Developers will seek to ensure that there are sufficient financial incentives to construct affordable housing.