Affordable House Pact Reached, Cape May Agrees to 270 Units

CAPE MAY – Cape May City approved a settlement Feb. 20 that resolves the city’s legal obligations to provide affordable housing. The settlement must still be approved by the court. 
The Fair Share Housing Center, an affordable housing advocacy group, given standing by the courts to represent individuals in need of such housing, calculated the city’s obligation at 270 units. 
The settlement does not specify a number of units that must be built, but rather focuses on mechanisms through which the city will incentivize and facilitate the construction of affordable housing.
It also sets aside a required portion of new housing for low- and moderate-income individuals and families.
The council’s resolution states that the agreement presents the city with a “realistic opportunity for the construction of its ‘fair share’ of low- and moderate-income housing.”
The negotiated settlement, if approved by the court, will satisfy the city’s obligations until 2025.
In its resolution, the city stated the settlement “finally resolves the dispute and avoids the cost of litigation and argument, and removes the potential of further lawsuits.”
In the settlement, the city agreed to modify its ordinances to allow for 12 accessory apartments in approved subdivisions of the Osprey Landing, Pella, and Somers tracts.
The city is not obligated to provide the apartments itself, but it must provide a financial incentive to a potential developer. The city would pay $20,000 per unit for a moderate-income unit, $25,000 for a low-income unit, and $30,000 for a very-low-income unit.
There will be a future review by the Fair Share Housing Center to determine if “these amounts have been sufficient to incentivize accessory apartments.”
The city will meet its further obligation through modifications of its zoning ordinance.
The modification will establish a 15 percent set-aside for affordable housing in rental housing developments and a 20 percent set-aside in for-sale developments.
Builders will not be able to make a payment in lieu of the required affordable housing units. A new complex, for example, could contain a mix of market rate and affordable housing units within the 15 percent and 20 percent set-aside requirements.
The city agreed that all new residential developments of five or more units would be subject to the affordable housing set-aside.
The settlement also specifies that 20 percent of any residential units developed in the Sewell Point Tract would be affordable.
In effect, the city is agreeing to meet its obligations through a specific accessory apartment program and a set-aside for affordable housing units in all new developments of five or more units.
How many affordable units these provisions will eventually result in is unclear and subject, in part, to market factors.
The agreement also sets goals for the percentage of affordable units that must be designated for very-low-income individuals and families.
On an annual basis, the city agreed to provide an “annual report on the status of all affordable housing activity within the municipality.”
Cape May County is witnessing a break in the logjam of litigation regarding affordable housing. Recently other municipalities, including Avalon, Stone Harbor, and Wildwood Crest, have approved similar settlement agreements.
To contact Vince Conti, email vconti@cmcherald.com.