Jersey City plans to deal with its shortage of affordable housing with a plan outlined in a 120-page internal document that may be released to the public this December, sources say.
The document is being put together by Doug Greenfield, supervising planner for the Jersey City Department of Housing, Economic Development and Commerce, who is also heading up a team of city officials who have been counting the number of affordable housing units in the city.
The state now requires municipalities to provide one affordable housing unit for every eight market-rate units built and for every 25 jobs created in the city.
But the city is also considering another method of increasing its affordable housing stock – forcing developers to pay $150,000 or more for every affordable housing unit they decide to not to build.New guidelines
The Council on Affordable Housing (COAH) is a state organization that sets guidelines for municipalities to meet their affordable housing obligations.
By their standards, “affordable” rental housing in New Jersey should not cost more than 28 percent of a person’s income.
Previously, municipalities were assigned a specific number of affordable housing units to be built within their borders. Now, there is a ratio to market-rate units and jobs.
City Councilman Mariano Vega said last week that he has been involved with the city’s formation of the plan, meeting with various city officials including Mayor Jerramiah Healy and offering input.
Vega did get into details of the plan, since it is still a “work-in-progress.” But he praised the initiative of the plan, which he called “a major policy shift” for the city in terms of addressing affordable housing.
“It is important we meet our obligation in providing affordable housing in this city as all these condos are coming online,” said Vega. “As someone who grew up in Downtown Jersey City in a cold-water flat, I am sensitive to this issue of making sure we provide for those who may be able to afford to stay in this city.”
Vega said that the city has required much affordable housing in new buildings, but must also make sure old renovated buildings provide some. Raising the fee
Right now, developers who opt not to build affordable housing in their market-rate units must pay the city a fee of $1,500 per unit. The fee then goes into the city’s affordable housing trust fund, which is now up to $6 million, which in turn is meant to go toward building affordable housing projects.
However, the city may drastically raise the amount.
“What are we trying to do is come up with the right amount,” said Vega. “Right now, we know it can go up somewhere from $150,000 to $250,000 per unit.”
Vega said there is a model for the increased fee: The city’s settlement with New Gold Equities regarding 111 First St. The settlement, which would allow New Gold to construct at least two residential towers and 710 units within the 111 First St. area, also calls for 58 units of affordable housing to be built by the developer off-site.
If the developer opts not to do so, then it will be charged $150,000 per unit, or $8.7 million.
However, the idea of raising fee has some cringing.
“We don’t want to chase away the developers,” Mayor Jerramiah Healy said last week. “We need to consider this issue carefully rather than stopping investment coming into the city.”
Attorney Eugene Paolino of the Jersey City-based law firm Schumann Hanlon represents a number of projects throughout the city including the St. Francis Redevelopment Project, the Beacon on Baldwin Avenue and Essex Commons on Essex and Greene Streets.
Paolino said raising the fee would definitely pose a problem with his clients and other developers.
“I think that is going to let many developers to reconsider development in the city,” said Paolino. “I think all of them want to do the right thing since affordable housing is not just a housing issue, but also a social issue,” said Paolino.
Paolino also added, “There really needs to be a serious discussion between the development community, the city, and COAH in terms of the affordable housing obligation.” Long wait lists, and developers’ problems
Even in Downtown Jersey City, considered by many to be nothing but condos and market rate rental apartments, there are affordable apartments. The Dixon Mills complex located on Wayne Street and older buildings at Newport have affordable housing units, as do the federally-funded low-income Jersey City Housing Authority complexes.But they often have long waiting lists.
And then there’s Essex Commons. The 70-unit building located on Essex, Greene and Morris Streets has 14 units to be set aside as affordable housing as required under the Colgate Redevelopment Plan, which governs construction in the area.
But people looking to rent an affordable unit find themselves running into an obstacle – the building’s owner has made them unavailable to rent.
City Councilman Steven Fulop (who represents the area where Essex Commons is located) has interceded on behalf on several people who have inquired on availability of affordable units, only to be turned away.
“In talks I have had with the developer regarding this matter, I’ve come away with the conclusion that they do not want to fulfill their obligation of renting these units,” said Fulop.
As it turns, Fulop entered into a complicated situation, according to private attorney Eugene Paolino.
“This issue is subject to discussion with the city, but I cannot discuss any further,” said Paolino.
However, Paolino did say that some of what is guiding the developers – Redwood Homes of Mountainside, N.J. – is the following: they did not receive tax abatement and they were saddled with the obligation after obtaining the property in bankruptcy court.
Both factors, coupled with having to rent the units as affordable housing, would place a financial burden upon the developers.
However, city planner Robert Cotter said last week Essex Commons has to comply with their obligation as provided in the redevelopment plan. Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com