Avalon Advances on COHA Settlement

AVALON – In 2017, Avalon settled its affordable housing obligations. At its June 27 meeting, the Avalon Borough Council introduced four ordinances that represent the implementation of that settlement.
After years in which a formula used by affordable housing advocates had resulted in an obligation for hundreds of affordable housing units, Avalon was able to settle its litigation regarding the obligations.
The key aspects of the settlement include opportunities for at least 10 accessory apartments on the second floor of structures in the business district, a set aside requirement that will ensure a set percentage of units for affordable housing in any new development that will produce five or more living units and an overlay permitting the land use in the business district that otherwise would be prohibited.
Three of the four ordinances introduced at the meeting spoke to each of those changes in turn. The fourth ordinance set up the general plan including definitions, monitoring, maximum rents, income eligibility requirements and the need for the borough to engage in an affirmative marketing plan.
The ordinances were introduced following approval of the settlement in a Superior Court fairness hearing.
As part of the implementation of the settlement, the borough’s Planning Board has also adopted a Fair Share Housing Plan.
With respect to the accessory apartments in the B-1 district, the borough is obligated to provide a financial incentive for the development of such units ranging from $30,000 to $20,000 depending on the designation of the units as very low, low or moderate income apartments.
The apartments would then be deed restricted for a 10-year span, limiting the space to affordable housing use.
Assistant Business Administrator James Waldron explained that state law also requires a 2.5 percent fee on non-residential construction projects. The funds generated do not stay with the borough but are sent to the state to support affordable housing efforts anywhere in New Jersey.
Waldron explained that the borough has retained the right to establish its own fee on commercial construction projects in order to offset the expenses associated with the accessory apartment program.
The fee cannot be revenue generation and must be planned as self-liquidating with the project expense the borough will incur to incentivize the apartments.
The process that the borough must go through to establish a fee structure required reasonable data on projects using the accessory apartment program, along with approval of the court.
Once approval is gained, the municipal fee on commercial construction would replace the state 2.5 percent fee even if the municipal fee is less than 2.5 percent.
Such an outcome would keep funds generated by the fee in the borough and directed to its affordable housing needs rather than statewide efforts.
The affordable housing process is a complex one and not easy to grasp in all of its nuances.
What Avalon has achieved with these four ordinances, assuming they are adopted on second reading, is a settlement that meets its obligations under state law until 2025. It does so largely through the use of an accessory apartment program that utilizes potential space not yet developed. It retains the ability within a year or two to institute a fee program that offsets the cost of the settlement to the borough regarding the financial incentives associated with the apartment opportunities.
To contact Vince Conti, email vconti@cmcherald.com.