General
The Housing Element reflects the Township's prior activities as well as its intentions for completing its lower income housing obligation under the A-4 Zoning. The initial program totaling 150 units received Court approval December 1, 1986 for a 6-year period to December 1, 1992 as contained in the Judgment of Compliance and Repose.
Subsequent to the Mount Laurel II decision, the Legislature passed the Fair Housing Act and created the Council on Affordable Housing (COAH). It also created the State Planning Commission to adopt and keep current the State Development and Redevelopment Plan.
The Township received its Judgment of Compliance and Repose prior to the creation of COAH. Therefore the approval of inclusionary housing developments attempt to balance the requirements of the Judgment of Compliance and Repose with COAH's new rules.
The Township has proceeded with its 1984 plan and ordinance to allow bonus densities in the A-4 Zone together with an obligation that 20% of all the dwelling units be set aside for low and moderate income households. The concept of bonuses to achieve the low and moderate income housing was mandated by the Court and carried forward by COAH. The density of 6.5 units/acre was accepted by the Court. In fact, the proposed development has been revised to less than the permitted density as a result of converting from a townhouse development to a single family development, except for the low/moderate income units. COAH calls for a minimum density of 3-5 units/acre where the market units are detached single family homes and a minimum density of 6 units/acre where the market units are attached housing units [N.J.A.C. 5:93-5.6(b)].
In addition, the Township's Housing Element includes a passive rehabilitation program for those units in need of repair and occupied by low and moderate income households. It is not known where these units are located. The intent is to have some developers contribute cash to a housing fund ($250,000 from the "builders remedy" site as set forth in the Judgment), including any funds from a Development Fee Ordinance if one is adopted. The option is kept open whether a Developer Fee Ordinance will be adopted.
It is intended to use all funds contributed by developers for housing programs that would be appropriate for the Township and as permitted by COAH. For example, at least 30% of the funds will be used to render units more affordable [N.J.A.C. 5:93-8.15(c)] such as down payment assistance, low interest loans, and rental assistance. Not more than 20% will be used for administrative purposes [N.J.A.C. 5:93-8.15(e)] . The types of activities permitted by COAH's rules [N.J.A.C. 5:93-8.15(a)] include opportunities for rehabilitation, regional contributions agreements, and the financial assistance and administrative requirements noted above. New construction, purchase of land for low and moderate income housing, and infrastructure serving low and moderate income housing, although permitted by COAH, are not considered appropriate in Colts Neck.
The rehabilitation of additional units that are not up to code is intended as an appropriate response to meet the needs of existing lower income households. Rehabilitation is more appropriate than new construction in an area where the residential patterns are established and lower income households may not be able to move, or may not want to move, because of friends, family and job location. Rehabilitation also takes deficient units "off the books" whereas providing a new unit adds to the housing stock, but does nothing to correct existing deficiencies. Because the Township is unaware of any deteriorated units within its boundaries, it plans to appeal the indigenous number calculated by COAH. At the most, it is anticipated the Township might provide funding for a passive rehabilitation program so funds would be available in the event a family applies for assistance to do rehabilitation of their home.
With the total cost of rehabilitation, or a Regional Contribution Agreement, expected to be less than the potential sources of funding ($250,000 from "The GrandeÓ development plus the potential from any adopted Development Fee Ordinance), the funds will cover other contingencies such as higher rehabilitation costs, higher administrative costs, a lower rate of development than foreseen, and similar circumstances that might either reduce the amount of money received, or produce a greater need than currently anticipated. In all, it is felt there is sufficient assurance that enough money will be available to meet the proposed program inasmuch as the program is a modest undertaking in any event.
The Township's Housing Element was prepared in conjunction with other goals and objectives considering such things as proximity to major roads and access to utilities. The A-4 Zone can accommodate the Township's fair share obligation for new units as follows.
| Builder remedy site | 88 |
| Builder remedy rental units | 22 |
| Other Zoned site in A-4 Zone | 15 |
| Units on Farms Completed | 12 |
| RCA or Rehab* | 25 |
| Total | 162 |
* $250,000 to be provided from builder remedy site per Court Judgment.
Any funds used as loans to low and moderate income households are anticipated to become a lien upon the property with the condition that they only be repaid, partially or in full, depending on the occupant's length of residency. Any repayment would be made at the time the house is sold or title is changed following the removal of the affordability controls that limit the occupancy to low or moderate income households. In this manner, the housing is rehabilitated without expense to the low or moderate income household, but the Township recaptures all or a part of its investment once the owner sells the home at its appreciated value. The money can then be recycled for future housing needs.
This section of the ordinance requires an amendment so the Township can implement a program to recapture between 50 and 100 percent of the appreciated value of an affordable unit that is sold after the affordability controls are removed at the end of 30 years. The ordinance currently looks for a 50% recapture of the capital gain on each unit. The proposed new amount is intended to be related to the length of time the owner owned the unit when the controls are removed. For example, a person who purchased the unit a week prior to the removal of the affordability controls would realize none of the increase in value. The family who lived their 30 years would share in half the gain with the homeowner's share increasing from zero to 50% over 30 years. For each year the person lived in the unit at the end of the 30 years, 1.667 of the increased value would go to the owner. The remainder would go into the Affordable Housing Program to assist in financing future housing needs.
It is intended that the proportion of low and moderate income units will be evenly divided. Where a project results in an uneven number of lower income units, the odd unit is expected to be a moderate income unit.
Phasing the lower income units into a development shall be required according to COAH's schedule [N.J.A.C. 5:93-5.6(d)]. This will require the ordinance to be amended.
| % of Market Housing Units Completed | % of Lower Income Units to be Completed |
| 25% | 0 |
| 25% + 1 unit | 10% |
| 50% + 1 unit | 50% |
| 75% + 1 unit | 75% |
| 100% | 100% |
Newly constructed lower income units are to remain "affordable" for at least 30 years. While this is more than COAH's 20 year minimum, it is consistent with their rules since it exceeds their "minimum". The Development Regulations Ordinance should be amended to increase this to a 30 year period.
It is also the Township's goal to keep the pricing of sales units the same as the existing ordinance so the owners pay no more than 28% of their income for housing assuming a 5% down payment [N.J.A.C. 5:93-7.4(d)]. However, if funding is available, the Township's program intends to provide subsidies for mortgage down payments and closing costs from the housing fund. This will reduce the purchaser's out-of-pocket expenses and make entry into the home-ownership market more realistic. Rental units are to be priced so the unit will cost no more than 30% of the homeowner's income [N.J.A.C. 5:93-7.4(e)].
Any rehabilitated units are to be subject to affordability controls for a minimum of 6 years for owner-occupied units and a minimum of 10 years for renter-occupied units [N.J.A.C. 5:93-5.2(g)]. At the end of the period of affordability controls, the Township plans to recapture some of the rehabilitation costs depending on the number of years the resident remained in the unit (each year the amount of funding that would remain with the unit and not get repaid to the Township would equal 16.67% of the cost for owner-occupied units and 10% for renter-occupied units). Funds returned to the Township are to be deposited into the Affordable Housing Program.
COAH's rules call for a bedroom distribution as follows [N.J.A.C. 5:93-7.3(a)] with at least one-third of all units in each category being for low income households [N.J.A.C. 5:93-7.2(c)]. This will require the ordinance to be amended.
In an effort to provide a range of affordability, the Township intends to require a distribution of prices to conform to COAH rules as best as practicable. The goal is to attain a maximum average price and rent level based on 57.5% of the median income [N.J.A.C. 5:93-7.4(a) and (b)]. The method of establishing the price spread across the low and moderate income sales units is to establish prices so that for every six units one is priced at 43.0% of the median income, two are priced at 48.0%, and one each is priced at 59.5%, 71.5% and 75% of the median income. Rental units are to be based on having one low income and one moderate income unit for each bedroom type to result in a distribution of rents averaging 57.5% of the median income. For purposes of establishing unit types and rent levels, the following has been established by COAH:
| Efficiency unit | 1 person |
| 1-Bedroom unit | one-half the units for 1 person, and one-half for 2 people |
| 2-Bedroom unit | one-half the units for 2 people, and one-half for 3 people |
| 3-Bedroom unit | 5 people |
The Township anticipates complying with the minimum rental requirements [N.J.A.C. 5:93-5.14(a)] and not exceeding the limit on age-restricted units [N.J.A.C. 5:93-5.13(a)]. The following calculations assume a reduced fair share obligation as shown in the following section.
Categories | Maximum Age Restricted Units | Minimum Rental Units Required |
| Reductions | 149 | 149 |
| Calculated Need | 13 | 13 |
| Sub-Total | 162 | 162 |
| Less Indigenous | n/a | -0 |
| less Spontaneous Rehab* | n/a | +4 |
| Total | 162 | 166 |
| percent allowed | x 0.25 | x 0.25 |
| Units Permitted | 41 | 42 |
* This number is added since the spontaneous rehabilitation number is a negative number in COAH's formula. Therefore, subtracting a negative number results in an addition.
Capacity to Accommodate Fair Share [N.J.A.C. 5:93-5.1(b)5]
Credits and Adjustments. Subsequent to April 1, 1980, Colts Neck provided reasonable housing opportunities for low and moderate income households. This activity included not only the completion of "The Grande" development including its 88 low and moderate income units with 22 family rental units, but zoninged areas not yet built, convertinged and rehabilitatinged units on farms, and making a cash contribution of $250,000 approved by the Court for either Township rehabilitation or entering into a Regional Contribution Agreement.
| Plans Approved | 88 |
| Rental Credits[1] | 22 |
| Zoning in Place | 15 |
| Units on Farms | 12 |
| RCA, Rehab[2] | 25 |
| Total | 162 |
The Housing Element for 1993-1999 proposes to continue the Township's previous planning and zoning policies. As indicated, when rental credits, cash, and land already zoned, but not yet built, are considered, the existing plan provides sufficient capacity to assure meeting a housing obligation of 162 units through 1999.
It is suggested that COAH's estimates of the Township's housing obligation be reduced to give the Township appropriate credits and adjustments for the program it has completed together with reductions based on the results of the survey of deteriorated and indigenous units [N.J.A.C. 5:93-2.2(b)] and a reduction in "reallocated present units" and/or "prospective need" based on preserving agricultural land and an absence of water and sewer services [N.J.A.C. 5:93-4.2 and 4.3].
Although the neither the survey nor the appeal to COAH has been undertaken at this writing, it is assumed at this time that the Township's obligation will be amended so that the existing zoning and funding for rehabilitation will be sufficient to meet the end result. The only modification in the existing program might be the need to adopt a Development Fee Ordinance to raise additional funds to assure either local rehabilitation or entering into a Regional Contribution Agreement.
| COAH 1987-93 | COAH 1993-99 | Proposed 1993-99 | |
| 1. Actual Deteriorated Units | 4 | 38 | 0 |
| 2. Indigenous Units | 4 | 33 | 0 |
| 3. Reallocated Present Units | 6 | 10 | 10 |
| 4. Present Need (2 + 3) | 10 | 43 | 10 |
| 5. Prospective Need | 199 | 106 | 106 |
| 6. Total Need (4 + 5) | 209 | 149 | 116 |
| 7. Prior Cycle Prospective Need | n/a | 103 | 103 |
| 8. Adjustments: | |||
| Demolitions | 0 | +3 | +3 |
| Filtering | -7 | -3 | -3 |
| Conversions | -1 | -1 | -1 |
| Rehabilitation | -3 | -4 | -4 |
| Reductions** | n/a | -149 | -149 |
| Credits | n/a | 0 | 0 |
| Undeveloped Land Cap | n/a | 0 | 0 |
| 20% Cap | n/a | 0 | 0 |
| 8. Calculated Need (6 - 7) | *197 | 97 | 62 |
Development Fee Ordinance [N.J.A.C. 5:93-8.1].
and Spending Plan [N.J.A.C. 5:93-5.1(b)6 and (c)]
At this writing, a determination on whether to adopt a Development Fee Ordinance has not been made. If such an ordinance is adopted, a Spending Plan will need to be prepared and adopted as an amendment to this Housing Element.
Under COAH's rules, the fees from a Developer Fee Ordinance may not exceed a percentage of the equalized/assessed value of the development -- 0.005 for residences and 0.01 for non-residential uses. The fees may be set at a lower rate than COAH's maximum and certain land uses or zoning districtdistricts may be selectively excluded. Any residential development including the construction of low and moderate income housing would be exempt from paying the developer fee since they are already participating in the housing program.
As indicated above, if the Township experiences the 30 new units a year estimated previously and the average value is $300,000, a fee of 0.005 for each unit would produce annual fees of $45,000. Assuming an average cost of $10,000 to rehabilitate a dwelling unit [$8,000 rehab and $2,000 administration - N.J.A.C. 5:93-5.2h), or a minimum of $20,000 a units as part of a Regional Contribution Agreement [N.J.A.C. 5:93-6.4(b)] either four units a year could be rehabilitated or two units a year could be transferred. To the extent these funds might be piggy-backed with funds from any government sources, the combined programs have a long-range capacity to rehabilitate even more units. A few more units might result under other programs permitted by COAH such as alternative living arrangements, accessory apartments, and financial assistance designed to render units more affordable as outlined in the next section.
Although non-residential development is not expected to be significant, adopting a Development Fee Ordinance requiring a payment of 0.01 of the equalized/assessed value of non-residential development, additional, but modest, revenues for the housing fund would be generated.
Lands Most Appropriate for Affordable Housing [N.J.A.C. 5:93-5.1(b)7]
The program to meet the Township's 1993-1999 fair share is proposed to be a continuation of the plan that has existed since 1984, with perhaps the adoption of a Development Fee Ordinance to assure the Township's fair share number can be met. It is expected that funds from such an ordinance would be used for existing and future rehabilitation efforts (either in the Borough or as part of a Regional Contribution Agreement). These funds might also allow for other activities permitted by COAH as summarized below [N.J.A.C. 5:93-5.8] subject to the cost, bedroom size, senior citizen limitations, appropriateness, and related regulations of COAH.
Other options permitted by COAH such as purchasing units that have never been occupied and purchasing units that have been vacant for at least 18 months are not considered a realistic program given the high cost of housing in the Township. Likewise, improvement of land to be used for low and moderate income housing and extensions and/or improvements of roads and infrastructure to low and moderate income housing sites [N.J.A.C. 5:93-8.15(a)] are not deemed realistic given the lack of a core area appropriate for this type investment, the absence of utility services throughout the Township, the agricultural nature of much of the remaining land, and considering high water tables, poor percolation, and other site-specific conditions limiting the location of on-site wells and septic systems on many properties.
Appropriate Sites. The plan assumes no new zoning for higher density residential development considering that the A-4 Zone was approved as part of the Court's Judgment of Compliance and Repose and considering that the absence of water and sewer services has been, and remains, a major obstacle to higher density housing. The A-4 zoneing district provides a bonus density up to 6.5 units per acre (with certain environmental conditions deducted from the acreage of the site) conditioned on a setaside of 20% of the units for low and moderate income households. The ordinance also requires 25% of the units to be rental units unless the developer provides a sum of money to assist low and moderate income households purchase units that are for sale. Detached single family homes, two-family homes, quadplexes, patio homes, atrium houses, townhouses, garden apartments and other forms of housing are permitted. Senior citizen units are permitted at up to 10 units per acre. The existing zoning therefore complies with COAH's presumptive densities [N.J.A.C. 5:93-5.6(b)] of 3 to 5 units per acre for detached single family homes and 6 units per acre for attached housing, with the zoning district permitting a diversity of housing types.
Sites for Low/Moderate Income Housing [N.J.A.C. 5:93-5.1(b)8]
The A-4 Zone was adopted in 1985 and has not changed. The zone is located in the Township's southwestern corner adjacent to Freehold Township where water and sewer services were eventually made available after considerable difficulty. The issues were ultimately resolved with assistance from the Court in conjunction with the development of "The Grande". The difficulties in obtaining utility services for any expanded zoning are expected to remain.
COAH's rules require the owners of sites zoned for the development of low and moderate income housing to be identified. The following names are of those owners whose sites remain undeveloped and have neither an application pending nor plan approval. "The Grande" produced the 88 low and moderate income units (plus the 22 rental units) and was completed in November 1995.
Water and Sewer Availability [N.J.A.C. 5:93-5.1(b)9] Development in the A-4 Zone is connected to public water and sewer services. Providing both utility services was a financial responsibility of the developer at the developer's expense. Since both utility services were provided by entities outside the Township, and because the approval to connect the development in the A-4 Zone into these systems was delayed by litigation and negotiations (ultimately resolved by a Court Order), it is not considered a realistic opportunity for affordable housing if the Township were to provide additional A-4 zoning.
Accordingly, it is anticipated that COAH should consider the absence of utilities and the agricultural preservation goals as the basies for approving a fair share number that will be related to the Township's actual number of deteriorated units and the capacity of the existing A-4 Zone.
Fair Share Plan (Ordinance)
It is proposed that only those amendments be made to the Development Regulations Ordinance as outlined above.
In the event a Developer Fee Ordinance is to be adopted, this Ordinance will be a new ordinance separate from the Development Regulations Ordinance.