Mayor's Message

The Impact of the Affordable Housing Program on Middletown

by Mayor Gerard P. Scharfenberger, Ph.D.

One of the most emotional and hotly-contested political issues confronting New Jersey today is affordable housing.  While on its face the concept is noble, it does come with an enormous financial and environmental cost to the taxpayers.  Thus, in these times of skyrocketing property taxes and budgetary stress at all levels of government, it is important to understand the role that the affordable housing program plays in our present and future well-being as a township. 

First, a short explanation of what the affordable housing program is. The affordable housing program that exists today is the result of a State Supreme Court decision handed down in 1975, which resulted in municipalities like Middletown being ordered by the state to provide a percentage of its housing stock to low and moderate income persons.  The number of units is tied directly to the population, number of existing and future market rate units and jobs within a municipality.  Given the fact that Middletown is so large, our affordable housing obligation, as one would expect, is also proportionately large.  At present, our obligation from the Council on Affordable Housing (COAH) rounds 1, 2 & 3 stands in the neighborhood of 2,160 units.  This is a tremendous number alone; however, when one considers that in the past only about 20% of any development had to be affordable, the number of units that must be constructed overall to meet our obligation is staggering.  Since 2000, Middletown has had 1,187 new multi-family housing units built or approved. Of those, 440 are affordable housing units. This means that 37% of the new multi-family housing units built or being built in Middletown are affordable housing units. 

One of the ways that Middletown has met part of its obligation has been through the use of Regional Contribution Agreements, or RCAs.  RCAs allow a municipality to transfer a portion of its obligation to another town in the region to rehabilitate existing, substandard housing. In some cases the money can be used for new housing, but in most cases it is used for substantial rehabilitation. This is beneficial on several levels: it rehabilitates existing buildings and improves areas with concentrations of housing that is in poor condition, while protecting open space and the environmental infrastructure.  At present, the state has made several changes to the affordable housing rules and regulations, which many argue, have dire consequences.  One in particular is the increased costs of RCAs, from $35,000 to $70,000 per unit.  This increase could virtually eliminate them as an option for Middletown. 

Another major change is the revised formula for calculating a municipality’s obligation, which will increase the number of units that Middletown must build.  As a result, not only may we be forced to build all of the units within the boundaries of the township, we must now build more of them.  Much of this comes at the expense of our precious, dwindling open space.  Perhaps what is most distressing is the cost to the taxpayers.  The governor has publicly stated that he wants to see 100,000 affordable housing units built in the state, although some estimates put the number at nearly ten times that.  The cost to the taxpayers to subsidize 100,000 units comes to around $16 billion dollars.  Then there are the added costs of administration, planning and legal representation for the town.  Builders will often challenge local zoning ordinances as a way to increase housing densities to absorb the affordable housing units, overriding our ability to control development.  Increased densities also put additional strains on township schools, services and infrastructure.  This has a tremendous impact on our budget with no room for adjustment when looking for areas to cut. 

The Middletown Township Committee has recently passed a resolution asking the governor to re-examine the entire affordable housing program and consider its impact on the taxpayers.  Many residents have outwardly questioned their ability to subsidize housing for others when they themselves are faced with rising property taxes, energy costs, and an uncertain economy.  Still, the township is bound by the state mandate and has been very aggressive in trying to satisfy its legal obligations.  Ironically, Middletown already has one of the most diverse array of housing units in the state with homes available in every range of the pricing spectrum.  The key to making housing more affordable for all New Jerseyans is to rid the state of the yoke of costly government programs and cumbersome unfunded mandates and create a more equitable funding system for essential services.  In the final analysis, our most important obligation still remains with the residents of Middletown, who are asking that we do everything in our power to keep Middletown affordable for everyone and protect the character and landscape that attracted people to the township in the first place. 
 

-This article appeared in the April/May 2008 issue of Middletown Matters, the township's newsletter.