Al Pelham of the Montclair Branch of the NAACP and Chris Napierala of the Montclair Justice Coalition hosted a Community Forum on Affordable Housing for local residents on April 11 at the Wally Choice Community Center in Glenfield Park.
The forum was sponsored by the Justice Coalition and featured a four-person panel comprising 4th Ward Councilwoman Renee Baskerville, MD; Steven Cooper, Senior Mortgage Banker at Alterra Home Loans in Jersey City; Deirdre Malloy, Property Compliance Manager at HomeCorp; and William Scott, Chair of the Montclair NAACP Housing Committee and Co-Chair of the Montclair Housing Commission.
Councilwoman Baskerville began her comments by discussing the Mt. Laurel decision regarding affordable housing, and saying that Montclair had gone “above and beyond” in their efforts to provide affordable housing. However, she pointed out that with new housing coming into Montclair with rents from $2000-$4000, there is concern about how this will affect people who have historically lived in the township’s low and moderate-income neighborhoods.
She also discussed gentrification, saying that it’s “not necessarily an all-bad thing,” as it sometimes serves a need for economic stimulus. “Some people feel some types of gentrification can be a positive thing. But people who’ve been in Montclair for decades, and whose families have shaped the township and given their all for generations, they may not be able to afford to live in their neighborhoods.” She questioned whether this trend would “push black and brown people out of their community.”
Referring to new, upscale shops coming in to the area, she asked how this would affect the community if they push out small groceries or community centers. “There’s no short answer to any of these questions – there’s no right or wrong – but it does mean bringing people together who care about it,” she stated.
Baskerville also pointed out that many people say they want to keep the “character of the community,” but that her constituents feel the new developments are “wiping out the character of the community” to achieve other goals.
She said that for affordable units that would be required under COAH (Council on Affordable Housing), Montclair would be one of several towns within a certain region and the units would be part of a pool in that region rather than focusing on Montclair residents.
“What we’re trying to do is… if we don’t have to come under that region for creating affordable housing, what do we have to do as a township to provide affordable housing for teachers, firefighters, police and township employees so they can stay here, thrive, live where they work,” she said.
Baskerville said the new developments in the township all have a certain number of affordable units and that affordable units should be spread throughout the township, not only in the 4th Ward. In addition, she said the township owns four lots on Wildwood Terrace and in the Brookdale Park area that have been designated for affordable/moderate income residency.
William Scott spoke next, crediting his involvement with affordable housing in Montclair to Councilwoman Baskerville, who he said nominated him to be on the Housing Commission eight years ago.
He recalled a study done by a consultant in 2012 to evaluate how much affordable housing Montclair would require. The results showed a need for 4000 units; however, the consultant recommended a more realistic 1800-1900 units. So far, Scott estimated about 630 affordable units have been built.
He said although the COAH requirements for affordable housing that followed the Mt. Laurel decisions have been in litigation for the past 15 years, “Montclair has basically been a leader in affordable housing. However, from a moral standpoint, there’s always room for improvement.”
Scott stated that, although it is still unknown what Montclair’s final legal obligation for affordable housing will be, “The township is going to step up and provide a 10% obligation for Montclair residents.” Therefore, in a development such as the Seymour Street development or the development planned for Lackawanna Plaza, 10% of the units will be affordable units set aside for Montclair residents. Scott also added there are a number of smaller developments that will be coming into the township in the next 3-5 years which will provide additional affordable units.
Steven Cooper of Alterra Home Loans discussed FHA mortgages and other opportunities for home ownership. He explained that his role is to ensure that a buyer won’t be a “quick default.” He said they have to analyze “everything about a client….The worst thing I can do is have somebody buy a house and they call me up 3-6 months later and say they can’t make the payment,” he explained.
Cooper went into detail about some of the challenges facing mortgage lenders. He said before the recession, people weren’t as challenged economically, whereas now there are people who are working 2-3 jobs. This makes it more difficult to qualify the clients, he explained, since some are part-time jobs. In addition, if a client requires a co-signer, this has to be taken into consideration.
Cooper said his firm was one of the few that still maintains 100% financed FHA mortgages (requiring no money down).
He emphasized that potential buyers should not ignore houses that are in disrepair and need work. He cited an example of a client who bought a house for $150k and obtained a $190k rehab mortgage to have money left for repairing the house. Once the repairs were complete, the after-repair home value was $250k, giving the buyer built-in equity from the start. Cooper also suggested buyers consider two-family affordable homes so that one side can be rented out to a tenant at an affordable rent.
Deirdre Malloy of HomeCorp explained the process by which residents could access their services.
“When someone comes in there’s a certain required process they have to go through to lease an apartment or if they are already a tenant, to recertify,” she explained.
She said there is a focused attention to ensure that people understand budgeting, credit ratings, and how to repair their credit. There is also a landlord-tenant counseling service.
“There is a foreclosure piece, where we have people who have million dollar homes that come for help, and people who are working class individuals,” she said, pointing out that everybody can have financial problems or hardships, such as the loss of a loved one, a job, or a medical situation. She said HomeCorp works with people, helps them with their applications, and refers them to other organizations if they have a situation that HomeCorp cannot address.
She told the audience that if they are having trouble paying their mortgage, they should come to HomeCorp before it becomes an emergency. They can help clients understand how to speak to realtors, know what questions to ask and what steps to take.
She also urged residents to bring their issues to the Housing Commission. “The Housing Commission meeting is open to the public. If you have an agenda item or serious concern regarding housing, bring it to us. Have a plan or at least have an issue that is really pressing, and we will discuss it and make suggestions as to next steps.”
The panel also discussed Piazza & Associates, which is the affordable housing administrator that processes the applications for Montclair and for every developer that has to adhere to the affordable housing guidelines. There is a waiting list, so the first step for a potential renter or buyer is to fill out a preliminary application on their website.
Piazza is currently administering affordable Montclair rental units in the residential buildings at Valley & Bloom, 24 Elm Street, Montclair Residences at Bay Street Station, as well as the various rental units under HomeCorp’s purview. They also offer affordable housing for purchase in several locations in town.
The panel discussion was followed by a Q & A session. Audience members asked fairly specific questions about their own situations, as well as questions of a more general nature.
One resident asked what the word “affordable” specifically means. Steven Cooper responded, saying the affordable housing cost is based on 30% of median income for low income housing, and 50% for moderate income housing.
“People think affordable housing means people who aren’t working,” he said. He explained they can be working in good jobs and still not be able to afford housing. He also said the amount considered affordable depends on the area in which they live. Median incomes in areas in Alpine or Chatham are higher, and therefore the housing costs considered affordable would be at a higher level.
He and William Scott also pointed out the lack of tenant turnover as a limiting force for available affordable rental units.
In response to questions about the potential for a rent control ordinance in Montclair, Councilwoman Baskerville said she had “floated” the idea in the past, and agreed that with new developments coming in that are high end, it has a trickle-down effect.
Earlier, she had also proposed an idea that if a new residential development is being built in a designated “Area in Need of Redevelopment,” perhaps rents could be restrained to be more in line with those in the nearby neighborhood, and thus better maintain neighborhood character.
Al Pelham wrapped up the meeting with a call to action for the audience, urging them to hold their elected officials accountable and encouraging them to get involved in the process.
Chris Napierale reminded the public to pick up the many informational handouts available and announced two upcoming events. He said the first will be a working session of the Montclair Justice Coalition to be held on Saturday, April 22, from 10 a.m. to 1 p.m. at the Wally Choice Community Center, and on Sunday, April 30, a Community Potluck supper at the same location from 5 p.m. to 7 p.m.
At what point do affordable housing advocates own up to and admit that affordable housing is tax subsidized by all other Montclair property owners and taxpayers? That it’s not just the greedy developers who have to pay and shift around their profits.
All Montclair taxpayers must then carry the on-going yearly tax burden of subsidizing those who live here in affordable units. That’s because there is no such thing as a free lunch.
Why? Every affordable housing unit here pays only a fraction of the actual market rate taxes normally collected – like just $2,500 for school related taxes only. So if that affordable unit has say 3 school age kids who just moved into town, our current taxpayers have to cover approximately $48,000 a year in uncollected tax revenue to pay for those kids to attend Montclair public schools. That’s an intentionally created deficit of $48,000 from just one, 3 bedroom type unit or home. From 20 new 3 bedroom units with 3 kids each: the total deficit is $960,000 yearly.
Forget the necessary tax subsidization for all other municipal services (like garbage, police etc.) — by building more single-family affordable housing here – as housing advocates want — they will create massive tax deficits for the entire township.
Yes, that means HomeCorp and the Montclair Housing Commission — while not thinking or talking about it — are actually encouraging us to go broke. Especially current town residents with less already who can barely afford to live here now and where another tax increase on their homes will push them over the edge. That’s right, adding more new affordable, subsidized single-family affordable housing here will actually force those at the lower economic brackets out of town — further losing our racial and economic diversity. It’s the very opposite of what housing advocates want.
But that’s because they don’t ever t consider the economics of their advocacy or their policies. And no one wants to talk about all this.
Building bigger, mixed use housing developments is different. There, the total tax rateables added from the development is still a tax plus for the township even with some percentage of affordable housing units calculated within. That makes much more sense as a policy to both help the housing need and to not over-burden current residents.
But building new, or converting single-family homes here — like HomeCorp is creating on Talbot Street now, or that Baskerville still advocates on Wildwood, is an economic disaster for existing residents. It will only add more tax burdens and deficits for our entire community.
“Building bigger, mixed use housing developments is different. There, the total tax rateables added from the development is still a tax plus for the township even with some percentage of affordable housing units calculated within.”
Actually, it isn’t a tax plus. It is just a different tax. I think you are trying to say it is revenue positive, but all development is revenue positive otherwise we would not incentivize it. Large planned developments in Montclair all share a common subsidy – increased density over what normal zoning allows – for which we tax them at a higher level. Smaller developments don’t get this and therefore are taxed at a lower rate. Yes, we are taxing corporations versus individuals, but there is no net gain for individual property owners.
Developers of multifamily or mixed use projects can get a financing benefit for setting aside 20% of the residential units for lower income residents, thereby creating attractive affordable housing opportunities for eligible families or individuals. This ameliorates some of the subsidy borne by the taxpayers, and creates an incentive for developers.
Now. Get over the straw man arguments supporting the use of the Wildwood parcel for affordable housing. Beyond the optics and “feel good” press, there don’t seem to be any realistic economic arguments that in favor building low income housing adjacent to Brookdale Park. Not enough people would benefit. Why not take a public/private partnership approach to develop market rate homes on the land, and use a portion of the profits from their sale to put toward re-development of existing housing stock that is in need of re-habilitation?
In addition, she [Councilor Baskerville] said the township owns four lots on Wildwood Terrace and in the Brookdale Park area that have been designated for affordable/moderate income residency.
First, this is not true. The land has not been designated for AH. Groups have advocated for a range of uses: open space, affordable housing and a community center to name 3.
Second, this 2.62 acre tract of undeveloped land is contiguous to other open space (Brookdale Park). Our government has & is advocating significant growth in Montclair’s population. Surprisingly, of the two metrics the Environmental Commission uses to measure recommended open space, one says we are at a surplus and the other says we are at a deficit. Since all of our land use experts strongly recommend new open space set asides in our redevelopment areas, I’ll go with the latter metric that says we are at a deficit.
Third, the choice of open space v. affordable housing is a trade-off between two of our primary public policies. We have other AH options to pursue in the 1st Ward & 2nd Wards. I’m not aware of other open space options.
If we are going to designate these properties, I would want them designated for open space.
The present system to create permanent affordable housing is very, very broken.
Here is a novel idea for affordable housing….the free market! Fair for everyone. Simple, you live where you can afford to live.
Flipside said: “Here is a novel idea for affordable housing….the free market! Fair for everyone. Simple, you live where you can afford to live.”
This just flys in the face of our “diversity” goals. We do want some affordable housing here. But housing advocates never admit that that this costs residents already living here any money. Worse, advocates believe that the housing market should be totally manipulated to actually force affordable housing into areas where property values do not sustain below market rate construction.
More kids added to the schools from affordable housing units creating a revenue loss and therefore school deficits to cover needed operations? Just ignore it. That’s their policy. It’s delusional.
Their push back. These kinds of comments are back door racist…class warfare when you suggest that the town tax revenue losses from putting affordable housing on say Wildwood — should not just be ignored.
So Ok Rubacky, open space v. market housing pm Wildwood is a policy choice. Affordable housing there v. market housing is economically dumb. There are other places to put affordable homes and as suggested above — Montclair can use the profits from selling Wildwood lots as market homes with then market rate tax revenues yearly — to create some affordable units elsewhere. Elsewhere where there optimum tax revenue generation is not lost and where land values are not as high.
In other words, it’s not enough that we provide some affordable housing in town and actually view it as the subsidy it is — because we do live in a market environment. Instead, Montclair Housingistas think those who can’t afford to live in an area should just be forced there — to maintain not just townwide — but also intra-ward diversity.
It’s this kind of misguided, post-60’s failed policy thinking — like when we tried to just achieve all of our social policy goals in 2000-2008 — that almost pushed the township in bankruptcy and created massive debt service.
It’s debt service that then prevented us from doing anything – because taxes rose so high — and still inhibits our actions today.
therealworld,
I’m not following how your suggestion relates to my choice to designate it as open space. If it is not going to be open space, then it doesn’t matter to me whether we build or sell the land for the proceeds.
As far as fiscal policy is concerned, I don’t believe in selling our public assets, particularly undeveloped land, for a public good that is treated as an expense to taxpayers. Obviously asset sales it is not a sustainable policy and our past similar sales tend to come back to haunt a few of us.
Also, if affordable housing is a benefit, by turning over the social engineering argument ‘against’ and I can say that the 1st & 2nd Wards are not getting the neighborhood diversity benefit AH brings. To concentrate AH in the 3rd and 4th Ward, at a minimum, lessens the benefit, and, at a certain point, will result in the costs exceeding the returns.