Tuesday, April 18, 2017

'Affordable' McMansions in NJ?

Like many states, New Jersey has an “affordable housing problem." And like other states, the problem is largely caused by government interference.

In NJ, the state requires local municipal zoning boards to “provide” for affordable housing within their borders. Not surprisingly, some towns may be gaming the system. That is the subject of a New Jersey Star-Ledger editorial. In How can some N.J. towns call McMansions affordable housing?, the Star-Ledger observed that some towns are classifying $500,000 and up homes as “affordable.” But as the Star-Ledger wryly asks, “What real estate agent is going to show a hairdresser a half million-dollar home?”

I left these comments, slightly edited for clarity:

We in New Jersey are all familiar with the Mount Laurel case. In 1070, Jacob’s Chapel, an African Methodist Episcopalian congregation in Mount Laurel, sought approvals to build 36 low income housing units on its own land. The town turned it down, highlighting the fundamental problem: It’s the zoning, stupid! The Mount Laurel episode led to lawsuits that resulted not in invalidating the zoning powers, but to the court ruling establishing the convoluted “affordable housing doctrine,” which requires towns to “provide ‘reasonable opportunity’ for the creation of affordable housing.” This,  in turn, led to 1985 legislation creating the Council on Affordable Housing (COAH).

How’d that work out?

In the 1980s, in my Hunterdon County hometown, a developer submitted plans to build a 2200 home project on three farms totalling over 500 acres. I thought it was a pretty darn good proposal. The homes spanned the entire price range from low income to McMansion. The main access road came off of a major highway, route 202, minimizing impact on local roads. The project was surrounded by natural buffers to soften the effect for the existing houses (mine included) bordering and facing the project. The developer even included building a school and giving it to the town, along with some open space.

The town turned it down, claiming that it had already met the COAH’s “affordable housing quotas.” The developer sued under what was then called the “builder's remedy.” The town won, and the three farms are now “preserved” at taxpayer expense. 2200 homes not built. Again, COAH and all, It’s the zoning, stupid!

Zoning is the major culprit, followed by regulations. Turn the page of this same Perspective edition of the Star-Ledger and you’ll find a Bloomberg article, What Makes Housing Too Expensive? Bloomberg reports, “The main barrier to housing construction in [coastal metropolitan areas like NJ] is local regulation -- zoning ordinances, environmental requirements, even affordable-housing rules.” These restrictions limit not only affordable home building, but all home building, driving up the cost of all housing, including older housing on the low price end.

Zoning is not the only cause of high housing costs. But it is an elephant in the room. Until local zoning power is vastly reigned in—I think zoning should be eliminated—so market forces can be allowed to work and property rights are protected as Jacob’s Chapel’s should have been, the problem can not begin to go away.

In reply to one correspondent who challenged me on my opposition to zoning, I answered:

No zoning doesn’t have to mean no protection for existing property owners from disruptive new development. I lived in Cranford, in a residential zone sandwiched between two commercial zones. The commercial zones came after we moved in. On one side, the boundary cut my block in half, so that my backyard bordered on factories. Two blocks the other way was a long-existing city dump, which was converted into a commercial/industrial park. Guess what? No problem coexisting with industry. The test should be whether new development violates existing property owners’ rights by physically disruptive consequences, not central planners’ trying to mold the “character” of the town to existing residents’ liking. Neither of the developments I cited above should have been blocked unless it could be proven that neighbor’s property rights would have been violated, which was definitely not the case. The burden of proof should be on those who want to block the developments.

Related Reading:

More Freedom, not More Government, Will Solve New Jersey's "Housing Crisis"

1 comment:

Mike Kevitt said...

Advocating that zoning powers be vastly reigned in should be done as an interim measure in the context of the publicly stated intention to totally eliminate all zoning, and THAT should be done within a publicly stated program to establish laissez-faire nationally. It should be publicly plain that lesser measures are taken with that big national program as the goal, with 'political' barriers broken down in the meantime.