NJ affordable housing called unfair and discriminatory

From the Philly Inquirer:

Editorial | Still out of reach

New Jersey’s latest plan to create affordable housing won’t work, a state appellate court ruled Thursday. It’s unfair, it discriminates against families, and it’s based on flawed data.

“The rules frustrate, rather than further, realistic opportunities for production of affordable housing,” wrote Judge Mary Catherine Cuff for the three-judge panel.

Once again, New Jersey’s Council on Affordable Housing has failed the guiding principles of the landmark “Mount Laurel” rulings – the affordable housing equivalent of Brown v. Board of Education. Families will continue to struggle; the economy may teeter when employers can’t find workers. The state must do better.

Gov. Corzine campaigned to create 100,000 affordable homes in 10 years. Assembly Speaker Joseph J. Roberts Jr. (D., Camden) is committed to housing reform. Now the court is demanding a remedy within six months – on a case brought by both builders and housing advocates. The momentum is right for action.

In 1975, 1983, 1986 and 2002, the New Jersey Supreme Court said all towns – urban, suburban, rural – had a legal obligation to provide housing opportunities to people of any income. After two decades, the theory is lauded nationally; practice has fallen woefully short.

That’s not news to day-care workers, health aides, security guards, janitors, and firefighters, who increasingly find New Jersey housing prices out of reach.

“Affordable” remains a debate about kids unable to live where they grew up, which is why Ethel Lawrence sued Mount Laurel. But it’s also about median home prices soaring past $200,000 in South Jersey; $400,000 up north. It’s about rent consuming half of people’s income and workers commuting long hours because they can’t afford a place near their jobs.

The state’s Council on Affordable Housing was supposed to devise rules for municipalities to build or rehabilitate more affordable homes. In its third try, in 2003, it failed miserably.

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2 Responses to NJ affordable housing called unfair and discriminatory

  1. SG says:

    I am happy at least Supreme Court will force state to come up with correct formula. This should help low income earners, if implemented as originially intended.

    But I have main issue with the word AFFORDABLE itself. According to Wikipedia,
    Affordable housing is a dwelling where the total housing costs are affordable to those living in that housing unit. In the United States and Canada, a commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income.


    The trouble in NJ is Affordable is defined as only for people making below about $50K for family of 4. I do understand how tough it would be for such family to afford decent housing in this expensive state.

    But also the issue in NJ overall affordability has significantly reduced by last 5 years of rising RE prices. I wish COAH takes that also into account.

  2. Realtors’ economist stayed sunny all year
    Commentary: David Lereah saw bottom in first quarter, second quarter …
    By Rex Nutting, MarketWatch
    Last Update: 5:31 PM ET Jan 25, 2007

    WASHINGTON (MarketWatch) — There are two universal truths at the National Association of Realtors: 1) It’s always a good time to buy or sell a home; and 2) We’ve seen the worst of the housing market correction.
    The second truth was in the script used throughout 2006 by David Lereah, chief economist for the NAR, even as sales plunged by 8.4%, the fastest decline in 17 years. See full story.
    With annual sales of 6.48 million, 2006 was the third best ever, but after five years of steady increases, it was a rough year for the industry. Through it all, Lereah never stopped smiling.
    At the beginning of 2006, Lereah was projecting home sales would fall about 4.4% to 6.79 million. In the end, however, the decline was about double what he’d projected. For 2007, Lereah is currently projecting a decline of about 0.9% to 6.42 million.
    Here’s what Lereah was saying throughout 2006 and into 2007, and what the market was doing.
    January 2006
    Lereah’s forecast: “The market is in the process of normalization.”
    Actual sales: Fourth-quarter sales fell at an annual rate of 12.6% to 6.94 million annualized.
    Lereah’s post-mortem: “The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead.”
    April 2006
    Lereah’s forecast: “Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau.”
    Actual sales: First-quarter sales fell at an annual rate of 8.6% to 6.79 million.
    Lereah’s post-mortem: “This is additional evidence that we’re experiencing a soft landing.”
    July 2006
    Lereah’s forecast: “The market should even out just below present levels.”
    Actual sales: Second-quarter sales fell at an annual rate of 6% to 6.69 million.
    Lereah’s post-mortem: “The market is stabilizing.”
    October 2006
    Lereah’s forecast: “We expect sales activity to pick up early next year.”
    Actual sales: Third-quarter sales fell at an annual rate of 22.2% to 6.28 million.
    Lereah’s post-mortem: “This is likely the trough in sales.”
    January 2007
    Lereah’s forecast: “The good news is that the steady improvement in sales will support price appreciation moving forward.”
    Actual sales: Fourth-quarter sales fell at an annual rate of 2.3% to 6.24 million.
    Lereah’s post-mortem: “It appears we have established a bottom.”
    It’s unfair, of course, to single out Lereah’s forecasts. He wasn’t the only economist who was surprised by the extent of the collapse in housing in 2006; some were just as wrong on the other side by predicting the housing bust would bring down the whole economy.
    But Lereah was the only one who presented his opinions alongside an economic indicator that’s treated as an objective gauge of the housing market. Along with his bully pulpit comes extra scrutiny.
    Lereah was traveling on Thursday and unavailable to comment. The senior economist at the NAR, Lawrence Yun, said in an interview the most recent sales trends show almost no movement up or down since August or September.
    “In hindsight, we did not anticipate how strong the demand from speculators had been,” Yun said of their 2006 forecast. “Now, with the speculators out of the market, and with low mortgage rates and steady job growth, we anticipate an improvement in sales.”
    It’s possible that Lereah may be right, finally. The bottom must come some time, why not now, some 19 months after the bubble peaked?
    But it’s also possible we could be far from the bottom, as in the housing bust of 1978-1982, when it took 42 months for the market to recover.
    If so, it could be a long year for David Lereah.
    Rex Nutting is Washington bureau chief of MarketWatch.

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