january 2008

COAH Proposes New Third Round Rules to Update Affordable Housing Requirements for Municipalities

BACKGROUND

On January 22, 2008, The Council on Affordable Housing (COAH) issued its replacement third round affordable housing regulations, consistent with the requirements of a January 2007 New Jersey Superior Court Appellate Division decision.

The proposed regulations retain growth share as a methodology for determining housing need and the funding of such development. The growth share methodology calculates affordable housing obligations based on the number of units to be sold at market value and the number of jobs to be created by non-residential construction, as opposed to a demographic evaluation of regional need.

COAH’s newly proposed regulations contain significant changes in the ratios used to calculate the required number of affordable housing units. Additionally, the regulations propose changes related to development fees and payments in lieu of construction that will have considerable financial implications for developers within the state.

RECOMMENDATIONS

In light of the potential adverse financial impact of the proposed regulations, it would be prudent for developers to take steps promptly to obtain site plan and subdivision approvals prior to final adoption of the regulations and enabling municipal ordinances. This strategy will afford developers the benefit of having approvals grandfathered under municipal land use law, which stipulates a protective time period against changes in zoning ordinances following an approval.

COAH will hold a series of public hearings throughout the state in January and February. The period for submitting written comments regarding the proposed regulations runs through March 22, 2008.

If you have any questions concerning the proposed regulations, please contact John H. Hague.