Land developers in New Jersey would get a financial break at the expense of affordable housing funds under a bill scheduled for a vote in the state Assembly on Thursday.
The bill would freeze a 2.5 percent fee that developers pay for building shopping malls or industrial projects in New Jersey — anything but housing.
Usually the proceeds go to state or municipal affordable housing trust funds, but lawmakers have given developers a break from the 2.5 percent fee throughout most of the last five years in an effort to spur economic activity.
The fee waiver would cover projects from July 1, 2013, to the end of 2014. Towns that already spent the proceeds on affordable housing units would not be required to give refunds.
Mayors across the state have quarreled for years with the state agency in charge of overseeing the affordable housing program, and construction has largely ground to a halt over the last decade amid court battles.
Waiving the developer fee for another year could spur job creation if it brings new shops or businesses, Burzichelli said. The bill (A4457) is sponsored by South Jersey Democrats and Minority Leader Jon Bramnick (R-Union).
Assemblywoman BettyLou DeCroce (R-Morris), another sponsor, said in a statement that “the building industry is one of New Jersey’s key economic drivers as it creates jobs and facilitates commerce.”
“Many jobs are created both directly and indirectly due to the building industry, such as suppliers, retailers, financial institutions and real estate,” DeCroce said.
Housing advocates oppose the bill, saying “there is no compelling evidence” that freezing the fee in previous years led more businesses to New Jersey and that, if the bill passes, towns may have to raise property taxes to meet their constitutional obligation to provide affordable homes.
“Developers locate in New Jersey because it a good place for their business,” Arnold Cohen, senior policy coordinator of the Housing and Community Development Network of New Jersey, wrote to legislators in a recent letter asking them to oppose the bill.
“The fee is a small price of the cost of doing business here. It is an investment in our state’s residents and its future.”
The state Supreme Court ruled in September that after years of delays in New Jersey’s program to build affordable homes, state officials had to get back to work. The court gave Gov. Chris Christie and state officials until Feb. 26 to write new regulations for the program, but the administration already is being sued by housing advocates for failing to meet the first deadlines.
“A remedy must be put in place to eliminate the limbo in which municipalities, New Jersey citizens, developers, and affordable housing interest groups have lived for too long,” Justice Jaynee LaVecchia wrote for the court in September.
State Sen. Jennifer Beck (R-Monmouth) has introduced a companion bill in the upper house, but no action has been taken there yet.
A representative from the state League of Municipalities said it has no position on the bill.
