Can financial disincentives benefit affordable housing?

From the Jersey City Reporter:

120-page affordable housing plan coming
By Ricardo Kaulessar

Jersey City plans to deal with its shortage of affordable housing with a plan outlined in a 120-page internal document that may be released to the public this December, sources say.

The document is being put together by Doug Greenfield, supervising planner for the Jersey City Department of Housing, Economic Development and Commerce, who is also heading up a team of city officials who have been counting the number of affordable housing units in the city.

The state now requires municipalities to provide one affordable housing unit for every eight market-rate units built and for every 25 jobs created in the city.

But the city is also considering another method of increasing its affordable housing stock – forcing developers to pay $150,000 or more for every affordable housing unit they decide to not to build.

The Council on Affordable Housing (COAH) is a state organization that sets guidelines for municipalities to meet their affordable housing obligations.

By their standards, “affordable” rental housing in New Jersey should not cost more than 28 percent of a person’s income.

Previously, municipalities were assigned a specific number of affordable housing units to be built within their borders. Now, there is a ratio to market-rate units and jobs.

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12 Responses to Can financial disincentives benefit affordable housing?

  1. Lindsey says:

    I have no idea what Jersey City officials are trying to do, but it sure doesn’t sound like it’s going to work.

    From what I can figure out, the city plans to raise its fee for not building affordable housing (AH) from $12K to $150K. It doesn’t mention what incentives might be offered to induce the higher payment, but clearly something has to be on the table. I know the process the state has previously tried to use was allowing a density increase in the planned development so you build more units that you can sell to help cover the cost of creating the AH units.

    It is quite clear that foot-dragging was the modus operandi in the past, this kind of crazy complex plan seems to be related to that.

    I would love to know how that one builder has been able to withold the AH units he is required to provide. There has to be some kind of enforcement mechanism.

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