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Submitted By: Clinton Township, Hunterdon County, New Jersey

Honorable Nick Corcodilos, Mayor

Prepared By: Steven Balzano, ESI Consultants

Stuart Koenig, Esq. Special Counsel to Clinton Township

Date: March 21, 2008

Comments to Proposed Rules:

1) N.J.A.C. 1:30: The release of supplemental data a week prior to the close of public comment period

precludes the public from the opportunity to provide meaningful input on the rule proposal.

Under section 2.1 of the rules for Agency Rulemaking item (a)(6) states that in order to be accepted

for rule making "the document shall be sufficiently complete and informative as to permit the public to

understand accurately and plainly the legal authority, purposes and expected consequences of the

adoption, readoption or amendment of the rule or regulation." The supplemental data released by

COAH subsequent to the rule proposal date includes data that is essential to an understanding of

how the agency determined municipal growth allocations and as such affordable housing obligations

that are central to the purpose of the proposed rule.

Therefore, the public comment period should be extended for an additional 60 days and/or the rule

proposal should be re-noticed to comply with the Administrative Procedures Act.

2) N.J.A.C. 5:94 Economic Impact Statement: The rule proposal includes a change in growth share

method and a retroactive increase in municipal growth share obligation from January 1, 2004 to date

that will result in the expenditure of significant municipal tax revenue to address that obligation.

The proposed rules increases the amount of the growth share ratios from one unit per nine housing

units and one unit per 25 jobs from non-residential development to one unit per five housing units and

one unit per 16 jobs. In addition the rules increase the amount of an RCA contribution in Region 3

from $35,000 to $67,000, and change the non-residential growth share calculation method.

As a result of the retroactive provisions in the new rules, Clinton Township’s municipal obligation will

nearly double from about 60 units to 111 units based on Certificates of Occupancy issued between

January 2004 through November 2007.

On January 29, 2007 Clinton Township submitted a Third Round Housing Element and Fair Share

Plan to COAH which included an RCA component. The Township also adopted a Growth Share

Ordinance consistent with the guideline of COAH’s previously adopted third round rules.

The increase in RCA cost and the additional subsidy cost that will be necessary to address the

retroactive obligation will result in an expenditure of Clinton Township municipal funds of

approximately $10,000,000.00 over the next ten years. This cost will be incurred by the taxpayers of

Clinton Township because there is no mechanism in the proposed rules that would allow the

municipality to recover those costs. This cost will only increase over time because the fee structure in

the rules is also not sufficient to cover the subsidy cost of future obligations generated by new

development. The rules assume that the retroactive obligation can be addressed through inclusionary

development but establish a maximum set-aside of 20% of affordable units which is insufficient to

address the growth share obligation generated from that development alone.

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Section 52:27D-311 of the Fair Housing Act states that nothing in the public law "shall require a

municipality to raise or expend municipal revenues in order to provide low and moderate income

housing". However, as a result of the growth share method and retroactive provisions in the proposed

rules the Township will be forced to expend significant municipal revenue to satisfy the growth share

obligation envisioned by the new rules.

The Economic Impact Statement should address the municipal cost associated with retroactive

growth share obligation. The rule proposal should be amended to ensure that no provision in the

proposed rule would require a municipality to expend local tax revenues to comply with the Fair

Housing Act.

3) N.J.A.C. 5:94 Agricultural Industry Impact: The municipal growth obligations established in the

proposed rules will result in significant losses of agricultural uses and are inconsistent with state rules

and policies governing the retention of agriculture.

The rule proposal assumes conversion of all remaining non-preserved agricultural uses to residential

or non-residential development to justify the municipal growth allocations which serve as the basis of

a municipality’s affordable housing obligation. The wholesale loss of agricultural uses as envisioned

in the proposed rules will threaten the economic viability of agriculture in New Jersey. The Fair

Housing Act provides for the adjustment of prospective need to provide for adequate land for

recreational, conservation or agricultural and farmland preservation purposes.

The proposed rules should be amended to provide adjustments in prospective need consistent with

the state rules and policies pertaining to agricultural retention.

4) N.J.A.C. 5:94 Smart Growth Impact: The prospective need established in the proposed rules is

based on projections of growth that are neither consistent with the State Plan nor based on limitations

in infrastructure capacity as required under the Fair Housing Act.

"Adjustment" – the definition should be amended to also include "or reduce the municipal growth

share obligation" see also Comments on Adjustments at 5:94-5

"Durational Adjustment" – the definition should be amended to change "prior round affordable

housing obligation" to "fair share obligation" see also Comments on Adjustments at 5:94-5

"Realistic Development Potential" – the definition should be amended to change "prior round

affordable housing obligation" to "fair share obligation" see also Comments on Adjustments at 5:94-5

"Suitable Site" - the definition should be amended to also include "free of encumbrances or other

environmental constraints which would" see also Comments on Site Suitability at 5:94-3

"Un-Met Need" – the definition should be amended to change "prior round affordable housing

obligation" to "fair share obligation" see also Comments on Adjustments at 5:94-5

"Vacant Land Adjustment" - – the definition should be amended to change "prior round affordable

housing obligation" to "fair share obligation" see also Comments on Adjustments at 5:94-5

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6) N.J.A.C. 5:94-2.2(d) Growth Share: The proposed rules should allow a municipality to make

adjustments to prospective need based on more accurate projections of household and employment

growth as allowed for under the Fair Housing Act.

The proposed rules include growth share obligations that are based on household and employment

projections for each municipality according to information included in Appendix F of the proposed

rules. The rules prohibit a municipality from using alternative projections where those projections are

less than what are included by rule and prevent a municipality from making adjustments to growth

share obligations based on alternative projections.

However, the Fair Housing Act allows for municipal adjustments to both present and prospective

need based on available vacant and developable land, and due consideration of other factors which

limit the development potential of a site, such as infrastructure capacity, as well as, environmental

and historic preservation factors.

The Fair Housing Act charges COAH with allowing for adjustments based upon the following

considerations:

preservation purposes,

In carrying out the their duties, the Fair Housing Act charges COAH with giving appropriate weight to

pertinent research studies, government reports, decisions of other branches of government, and the

State Plan in determining present and prospective need.

Appendix F of the proposed rules rely on two primary sources of information to determine prospective

need – the Econsult Report which allocates each municipalities growth based on projected increases

in household and employment through 2018, and the NCNBR Report which estimates whether there

is sufficient land and capacity to support the growth envisioned in the rule..

The Econsult Report states that the information contained in the report formed "the base data for

COAH to determine the statewide affordable housing obligations". The report further states that one

of the primary data sources used in projecting growth was the capacity estimates provided in the

NCNBR Report which was used to "verify that the physical growth capacity is not exceeded".

However, in section 4.7 of the NCNBR Report it states that they "did not use water and wastewater

treatment capacity data to evaluate whether the vacant land capacity estimates … generate water

demand that exceeds the capacity of the local provider or ground water resource, or effluent flows

that exceed the treatment capacity of any sewer service area". Therefore, COAH has not yet

determined that there is sufficient infrastructure capacity available to support the growth envisioned in

the proposed rules, as required by the Fair Housing Act.

The growth projections in the proposed rules did not allow for the preservation of historic resources;

did not allow for adequate provisions for recreational, conservation or agricultural and farmland

preservation purposes; did not use the most current information available in the State Plan; and did

not determine if there was adequate public facilities and infrastructure capacities available to support

the growth envisioned in the rules despite the fact that there were numerous "pertinent research

studies (and) government reports" available to COAH prior to the rule proposal date. As a result, the

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growth projections included in the rule are artificially inflated because the rules are based on

projections that do not address the requirements of the Fair Housing Act to establish present and

prospective need according to infrastructure capacity, as well as, environmental and historic

preservation factors.

By prohibiting a municipality from using alternative projections where those projections are less than

what are included by rule, and to prevent a municipality from lowering its growth share obligation

based on alternative growth projections, the proposed rules run contrary to the provisions of the Fair

Housing Act. The rules should be amended to allow for adjustment in the municipal growth share

obligation based on further consideration of growth projections that are based not only of available

vacant and developable land, but also in due consideration of other factors which limit development

potential and are allowed for under the Fair Housing Act, such as, infrastructure capacity,

environmental and historic preservation factors

7) N.J.A.C. 5:94-2.2(e) Actual Growth Share: The proposed rule creates an unrealistic compliance

mechanism that will preclude a municipality from fully complying with the Fair Housing Act.

The rules establish that a municipality is only required to provide for affordable housing in direct

proportion to the growth share obligation generated by the actual growth. However, the rules obligate

a municipality to "… continue to provide a realistic opportunity for affordable housing to address the

projected growth share through inclusionary housing or other mechanisms…". The rules therefore

obligate a town to zone for development that will likely exceed the realistic opportunity or capacity of a

municipality to support that growth, that will likely be inconsistent with other applicable state and

federal laws and/or will require the expenditure of municipal revenues to meet a projected growth

obligation that may never materialize. In addition, there is no provision in the rules that would allow

for adjustments in the growth share obligation based on new rules or regulations that may be

promulgated over the next ten years that may further limit the realistic growth potential within a

municipality.

By requiring a town to provide for a realistic opportunity based on growth projections that are

unrealistic, the proposed rules will hinder a municipality from being able to meet its constitutional

obligation to provide opportunities for low and moderate income housing as envisioned in the Fair

Housing Act. The rules should be amended to allow for adjustment in the municipal growth share

obligation based on further consideration of growth projections that are based not only of available

vacant and developable land, but also in due consideration of other factors which limit development

potential and are allowed for under the Fair Housing Act, such as, infrastructure capacity,

environmental and historic preservation factors, or other considerations that may be required under

other state or federal law.

8) N.J.A.C. 5:94-3.13 Site Suitability: The proposed rule needs to clarify that a site shall be deemed

"suitable" only if the intended use of that site is consistent with state and/or federal rules and

regulations governing land use in New Jersey.

In determining whether a site is suitable to provide for affordable housing, the proposed rules include

a reference to the State Plan planning area designation but limit the applicability of other state and or

federal rules and/or regulations that may limit the use and/or development potential of that site. A site

should be deemed "suitable" only if it can be reasonably demonstrated that the proposed use of the

site is consistent with the State Plan AND other applicable laws, regulations and standards

established by other government agencies that have delegated responsibility over land use in New

Jersey. That may include, but is not limited to, the Department of Community Affairs, the New Jersey

Department of Environmental Protection, the US Environmental Protection Agency, the US Fish and

Wildlife Service, as well as regional planning agencies such as, but not limited to, the Pinelands

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Commission, the Meadowlands Commission, the Delaware River Basin Commission and the

Highlands Council.

Within the Highlands Region the proposed rules at 5.94-3.13(b)(3) unnecessarily restrict the criteria

for determining site suitability based on the rules at N.J.A.C. 7:38. N.J.A.C. 7:38 includes

development standards that are only applicable to the Preservation Area of the Highlands Region.

The rules do not acknowledge the standards in the Highlands Regional Master Plan that will apply to

the entire Highlands Region. In addition, the proposed rules reference the "NJ Freshwater Wetlands

Maps" and the "US Fish and Wildlife Service National Wetlands Inventory Map" which do not have

any regulatory standing and are inconsistent with the site constraint criteria used by COAH in

determining growth capacity in the proposed rules. This section also includes reference to "steep

slopes" but excludes other considerations that may limit site suitability such as protection of

groundwater quality (nitrate dilution), groundwater recharge or critical habitat areas where there is an

ordinance in place that uniformly regulates development in such areas.

The proposed rules need to clarify that in order for a site to be deemed suitable that it must be

consistent with the State Plan AND all other applicable state and federal rules, regulations and

standards. The title of this section should be amended to read "Site Suitability Criteria and

Conformance with the State Development and Redevelopment Plan and Other Applicable Statutes".

The proposed rules should be amended to include a clarifying statement at 5.94-3.13(a)(5) such as

"The site can be developed consistent with other applicable state and federal rules, regulations and

standards." The proposed rules should provide a clarifying statement at 5.94-3.13(b)(3) to include

"The Highlands Regional Master Plan". The proposed rules should be amended to provide a

clarifying statement at 5.94-3.13(b)(4) to reference the NJ Freshwater Wetlands Protection Act and

Section 404 of the Federal Water Protection Act as appropriate, delete reference to "NJ Freshwater

Wetlands Maps" and the "US Fish and Wildlife Service National Wetlands Inventory Map", and

"provide for the consideration of other environmentally constrained lands such as, but not limited to,

steep slopes, where there is an ordinance in place that uniformly regulates development in such

areas".

9) N.J.A.C. 5:94-3.16 Coordination with Other State Agencies: The proposed rules need to clarify

that COAH will not compel or require a Municipality to conform to the State Plan or any other regional

plan where that conformance is not a mandatory provision in the applicable statute.

The proposed rules provide that a municipality that seeks Substantive Certification from COAH are

encouraged to seek State Plan endorsement and will be required to provide the status of the

endorsement application as part of COAHs review of the Fair Share Plan. The rules further require

COAH to consult with other planning entities of the State to determine whether the Fair Share Plan

creates a realistic opportunity for the provision of affordable housing.

Both the State Planning Act and Highlands Water Protection and Planning Act make endorsement

and/or conformance with the respective plan a voluntary process. The State Plan is now 3 years late

in releasing an updated State Planning Map based on the results of Cross Acceptance, and the

Highlands Council is also two years late in adopting a Regional Master Plan. It is unlikely that either

of these plans will be completed prior to COAH’s adoption of the proposed rules. Therefore, until such

time as these plans are completed in accordance with their respective legislated mandates, a

municipality can not make a determination of whether a Fair Share Plan prepared in accordance with

the requirements of these rules satisfy the requirements of either the State Plan or Highlands

Regional Master Plan.

COAH should not assert itself into these independent processes which may cause or contribute to a

violation of its statutory authority and/or be contrary to the provisions of applicable law. In addition,

the process of State Plan Endorsement and/or Highlands Plan Conformance will require the

expenditure of significant municipal revenues and is not necessary for COAH to make an

independent determination whether a Fair Share Plan is "consistent" with the State Plan as allowed

for under the Fair Housing Act.

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The proposed rules should be clarified to amend the language at 5.94-3.16(a) to exclude reference to

encouraging endorsement or requiring the status of an endorsement application and replace that

language with "require a municipality to provide a statement of consistency with the State Plan". A

clarifying statement should also be provided at 5.94-3.16(c) that states "The Council shall not require

conformance with a state and/or regional plan where that requirement is not mandatory under the

enabling statute."

10) N.J.A.C. 5:94-5.1 Vacant Land Adjustment Applicability: The proposed rules should not prohibit a

town from seeking an adjustment in prospective need as allowed under the Fair Housing Act.

The proposed rule includes household and employment projections for each municipality which serve

as a basis for determining a municipality’s prospective obligation. The rules at N.J.A.C. 5:94-2.2(d)

prohibits a municipality from using alternative projections where those projections are less than what

are included by the proposed rule unless a vacant land adjustment is approved by COAH. However,

the proposed rule limits the applicability of a vacant land adjustment to only address a prior round

obligation.

The proposed rule states that a municipality can only seek to adjust its prospective need by obtaining

a vacant land adjustment, an adjustment that is precluded by rule. Not only is this circular logic but

prohibiting adjustments to a municipalities growth share obligation runs contrary to the provisions of

the Fair Housing Act.

The Fair Housing Act allows for municipal adjustments to both present and prospective need

whenever that adjustment is warranted due to factors which limit development potential. These

factors, such as the adequacy of infrastructure capacity, may limit development potential below the

growth projections included by rule because these factors were not taken into consideration by COAH

at the time of rule proposal.

The rules should be amended to allow for adjustment in the municipal growth share obligation based

on further consideration of growth projections that are based not only of available vacant and

developable land, but also in due consideration of other factors which limit development potential and

are allowed for under the Fair Housing Act, such as, infrastructure capacity, environmental and

historic preservation factors, or other considerations that may be required under other state or federal

law.

11) N.J.A.C. 5:94-5.2 Development Suitability: The proposed rules for determining whether a site is

suitable for development need to be consistent with other applicable state and federal laws governing

land use in New Jersey.

The proposed rules establish the procedures for requesting a vacant land adjustment from COAH

based on whether a property is available and suitable for development. Section 5:94-5.2(d)

establishes the criteria for determining whether a site is suitable for development.

Section 5:94-5.2(d)(4) of the proposed rules creates a bifurcated process for determining whether a

site includes environmentally sensitive lands according to where the property is located. The rules

differentiate between those properties that are located within the Pinelands, Highlands, Coastal Zone,

or Meadowlands; and those properties that are not in any of the aforementioned geographic regions

of the state. The proposed rules then limit which state regulations that affect development suitability

can be used by a municipality to determine if a site is suitable for development based on where the

site is located.

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Most state and federal statutes that regulate land use and limit development suitability apply

regardless of where you are in the state. For example, development constraints associated with

Category One waters apply in the Highlands, as well as, all other areas of the state. However, the

proposed rules suggest that Category One waters are excluded from consideration for determining

whether a site is suitable for development if, for example, that site is located in the Highlands Region.

In addition the proposed rules arbitrarily limit the applicable statutes that can be used for determining

whether a site is suitable. For example, Category One waters have implications on development

suitability in accordance with not only N.J.A.C. 7:15 as specified in the proposed rules but also

N.J.A.C. 7:8, N.J.A.C. 7:9B, N.J.A.C. 7:14, and N.J.A.C. 7:14A. Other rules such as the Freshwater

Wetlands Protection at N.J.A.C. 7:7A apply in the Pinelands, Highlands and Coastal Zone in addition

to the remaining areas of the state with the exception of the Meadowlands which is under the

jurisdiction of the US Army Corps of Engineers in accordance with Section 404 of the Federal Clean

Water Act.

Some rules only apply depending on where you are in the state and possibly in a region such as the

Highlands. If you are in the Preservation Area of the Highlands then N.J.A.C. 7:38 applies. If you are

in the Planning Area of the Highlands then N.J.A.C. 7:38 generally does not apply. However,

regardless of whether you are in the Highlands, the development suitability of a particular site may be

affected by one or more of the following regulations including but not limited to: the Highlands

Regional Master Plan N.J.S.A. 13:20-1, NJ Freshwater Wetland Protection N.J.A.C. 7.7A, Flood

Hazard Area Control N.J.A.C. 7.13, Stormwater Management N.J.A.C. 7:8; Water Quality

Management Planning N.J.A.C. 7:15 and Pollution Discharge Elimination System N.J.A.C. 7:14A that

are not included by reference in the proposed rules.

Therefore, the proposed rules need to more clearly specify the criteria to be used to identify

environmentally sensitive lands that do not arbitrarily limit consideration based solely on geographic

areas by excluding applicable regulations that legitimately affect development suitability on a site.

The criteria for defining development suitability in this section should also be consistent with site

suitability criteria in other sections of the rule such as in section 5.94-3.13. The proposed rules

should provide a clear statement of intent such as - "For a site to be deemed suitable for development

it must be able to be developed consistent with all applicable state and federal rules, regulations and

standards." Or if you prefer, "For a site to be deemed unsuitable for development it must

demonstrated that the development of the site would be inconsistent with one or more applicable

state and federal rules, regulations and standards." The proposed rules should also provide a

clarifying statement including consideration of the "The Highlands Regional Master Plan" whenever a

site is located within the Highlands region. The Fair Housing Act allows for adjustments to present

and prospective need based on the consideration of infrastructure capacity which should also be

included as a criteria for determining development suitability in this section of the rules. In addition,

the proposed rules should "allow for the consideration of other environmentally constrained lands

such as, but not limited to, steep slopes, where there is an ordinance in place that uniformly regulates

development in such areas".

12) N.J.A.C. 5:94-5.2 Realistic Development Potential: The criteria used for establishing Realistic

Development Potential in the proposed rules should be consistent with the State Plan, applicable

regulations governing land use in New Jersey, and compatible with the established pattern of

development in the community as envisioned in the Fair Housing Act.

The proposed rules establish procedures for determining the Realistic Development Potential of a site

that is suitable for development in accordance with the requirements for seeking a vacant land

adjustment. The rules do acknowledge that COAH shall rely on appropriate regulatory agency’s

regulations in determining whether there is sufficient capacity to support development on a site.

However, section 5.94-5.2(h) requires COAH to consider sites or parts thereof for inclusionary

development based on a minimum presumptive density of 6 units to the acre. Establishing a

minimum presumptive density and uniformly applying that to all areas of the state is inconsistent with

the provisions of the Fair Housing Act and will force municipalities to zone for uses of land at

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unrealistic and arbitrary presumptive densities because the rules do not require that the presumptive

densities be established consistent with applicable land use law.

The Fair Housing Act allows for adjustments to present and prospective need so as to not drastically

alter the established pattern of development in the community and to avoid a pattern of development

that is contrary to the planning designations in the State Plan. The Fair Housing Act further provides

that in carrying out its duties, COAH shall give appropriate weight to pertinent research studies,

government reports, decisions of other branches of government and implementation of the State

Plan.

As part of it’s rule making COAH has previously conducted a vacant land analysis which was included

in Appendix F of the proposed rules. The NCNBR Report included a determination of residential

densities that are appropriate given the specific region of the state and the planning area designation

in the State Plan. Section 4.1.1 of the NCNBR report states "Existing residential and employment

densities vary considerably from municipality to municipality, and region to region, and future growth

will be impacted by the location of available lands in different State Planning Areas … To address

these variations, the Center constructed a residential density matrix that divided the State into its six

COAH Regions and each of these into five land use categories based on State Planning Area… and

community type." These land use categories resulted in a range of residential densities from 1.35 to

22.73 dwelling units per acre. This data was then used to calculate a median residential density for

each land use category within each of the six COAH Regions that attempted to be sensitive to

established patterns of development and consistent with the planning area designations in the state

plan.

In order to be consistent with the Fair Housing Act, COAH should amend the rules to provide a

mechanism whereby the minimum presumptive density for calculating Realistic Development

Potential can be adjusted based upon the location, the existing pattern of development, and the

planning area designations of the State Plan rather than rely on a "one size fits all" approach.

13) N.J.A.C. 5:94-5.2 Unmet Need: The rules should be amended to allow a municipality to satisfy its

fair share obligation before addressing its unmet need.

The proposed rules establish the procedures for how a municipality addresses the "Unmet Need" or

that portion of a municipal obligation that can not be satisfied due to limitations in development

potential such as may occur through a vacant land adjustment or in a situation where the growth

projections of a municipality were unrealistic and the growth never occurs. The rules provide that

whenever there is an unmet need that any production of affordable housing units must first go to

satisfy that unmet need before the municipalities fair share obligation can be addressed. This

provision in the rule will prevent a municipality from satisfying its obligation under the Fair Housing

Act wherever the growth projections included in the rules create an unrealistic municipal obligation

that is contrary to the requirements of the Fair Housing Act.

The proposed rules need to be amended to allow a municipality to be able to address its fair share

obligation before it is required to satisfy any unmet need.

14) N.J.A.C. 5:94-5.4 Durational Adjustment: The prospective need established by rule does not

address limitations in water and wastewater capacity and the procedures for durational adjustment

are contrary to applicable state law.

Appendix F of the rules includes household and employment projections that are used to calculate

each municipalities prospective need. Section 5:9.4-2.2 of the rules prohibits a municipality from

using alternative projections where those projections are less than what are included by rule unless a

vacant land adjustment pursuant to N.J.A.C. 5:94-5.6 is approved by COAH. Section 5:94-5.1 in the

proposed rules precludes a municipality from seeking a vacant land adjustment to its growth share

obligation based on limitations to growth such as those that may occur because the projected growth

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envisioned by the rules did not consider limitations in water and wastewater capacity. However, the

Fair Housing Act charges COAH with making adjustments to municipal present and prospective need

based in part on a consideration of "adequate public facilities and infrastructure capacities" and yet

the proposed rules clearly state that COAH "did not use water and wastewater treatment capacity

data" in determining prospective need even though that data was available at the time of rule

proposal. For example, the Supplemental Data that was recently released by COAH and used in

determining growth potential in municipalities includes information on the capacity within sewer

service areas that could have been used for establishing growth capacity limits if desired. Within the

Highlands region information is available on water capacity that could have also been used by COAH

in establishing growth capacity limits if desired.

In determining a municipalities growth potential, COAH failed to assess limitations in water or

wastewater capacity even though that information was available to COAH prior to rule making. The

rules as currently constructed simply obligate a municipality to "endorse all applications to provide

infrastructure to a site for the development of low and moderate income housing for identified in the

Fair Share Plan" without consideration of limitation in capacity or environmental constraints as

allowed for in the Fair Housing Act and as required by other applicable state statutes.

New Jersey’s surface and ground waters are a finite resource that belong to each and every resident,

held in trust and managed by the State of New Jersey. One of the regulatory tools that the NJDEP

utilizes to assure that both current decision making and future planning adequately take into account

protection of water quality and quantity is the Water Quality Management Planning rules, N.J.A.C.

7:15.

The WQMP rules are intended to evaluate whether appropriate and adequate wastewater treatment

capacity is available to accommodate the needs of existing and future development in consideration

of environmental constraints. Under the existing rules, NJDEP requires that to obtain approval an

applicant must first conduct "an environmental constraints analysis (ECA) … to account for the

constraints to development that arise because of the presence of environmentally sensitive areas and

the need to protect them. The ECA is needed to assess the proposed sizing of the treatment facilities

and the appropriate location and extent of the proposed sewer service areas." The requirements in

these rules is very similar to the criteria that should be used by COAH to address the requirements for

site suitability, or development suitability and Realistic Development Potential under sections 5:94-

3.13 and 5:94-5.2, respectively.

So the rules as currently proposed create unrealistic obligations that are inconsistent with the Fair

Housing Act, prohibit municipalities from seeking adjustments as allowed under the Fair Housing Act,

and then create an unrealistic compliance mechanism that will impede a municipality’s ability to

produce affordable housing. This is because COAH’s rules exclude consideration of the limitations of

water and wastewater capacity in establishing prospective need and then propose procedural

requirements for establishing "durational adjustments" that run contrary to other state statutes.

The rules should be amended to allow for adjustment in the municipal growth share obligation based

on further consideration of limitations of infrastructure capacity as allowed for under the Fair Housing

Act. In addition, the rules should include a requirement that "an endorsement of any application for

water and wastewater capacity shall be in accordance with applicable law" similar to the provisions in

the proposed rules pertaining to Realistic Development Potential.

15) N.J.A.C. 5:94-5.6 Adjustments of Household and Employment Projections: The criteria used for

making adjustments to household and employment projections should be consistent with the State

Plan, applicable regulations governing land use in New Jersey, and compatible with the established

pattern of development in the community as envisioned in the Fair Housing Act.

Under this section of the proposed rules the procedures for making adjustments to municipal

household and employment projections are established. The rules are unclear how these

adjustments will affect a municipalities growth share obligations or the projected need using the

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growth share methodology. In sections 5:94-5.6(e) and 5:94-5.6(f) the rules establish minimum

presumptive densities for residential and non-residential use, and prevent any adjustment in

household and employment projections from resulting in a concurrent reduction in the actual growth

share obligation. COAH has again applied a one size fits all presumptive density for the entire state

that is contrary to the provisions of the Fair Housing Act and inconsistent with other state laws

governing land use in New Jersey.

Establishing a minimum presumptive density and applying that to all areas of the state will force

municipalities to zone for uses of land at unrealistic and arbitrary presumptive densities because the

rules due not require that the presumptive densities be established consistent with applicable land

use law. In Appendix F of the proposed rules it states "no new development would occur at densities

more than 25 percent higher than the municipality’s current average density". Yet the presumptive

densities included in the rule is higher than 70% of the land use categories used in the vacant land

analysis that was based in part on existing patterns of development.

The Fair Housing Act allows for adjustments to fair share so as to not drastically alter the established

pattern of development in the community and to avoid a pattern of development that is contrary to the

planning designations in the State Plan. The Fair Housing Act further provides that in carrying out its

duties, COAH shall give appropriate weight to pertinent research studies, government reports,

decisions of other branches of government and implementation of the State Plan. Many state

regulations impose limitations on development suitability and limit the density that the land can

support, such as the State Plan, Highlands Plan, NJDEP Water Quality Management Planning Rules

to name a few. So the proposed rules as currently envisioned will require a municipality, in the

interest of maintaining its Substantive Certification, to zone for uses of lands at presumptive densities

that are inconsistent with the Fair Housing Act and other applicable state rules and regulations.

Prior to rule adoption COAH should explain how adjustments made to household and employment

projections will affect a municipalities growth share obligations or the projected need using the growth

share methodology.

16) N.J.A.C. 5:94-10.2 Unnecessary Cost Generating Requirements: The proposed rules should

clarify that this section shall not apply to standards that are consistent with the requirements under

applicable state rules or regulations (e.g. NJDEP stormwater rules or Highlands Regional Master

Plan).

17) N.J.A.C. 5:94-10.4 Special Studies/Escrow Accounts: The proposed rules should clarify under

what jurisdiction is COAH empowered to impose standards of review that are contrary to the

Municipal Land Use Law.

18) N.J.A.C. 5:94 - APPENDIX A Growth Share Ratio Methodology: The Growth Share Methodology

should be adjusted to be consistent with the State Plan, and exclude population in state penal

institutions from the calculation of total projected need for low and moderate income housing.

Appendix A establishes the basis upon which COAH determined a total projected statewide need for

low and moderate income housing of 115,666 units.

The proposed rules rely on growth projections that are unrealistic and significantly greater than what

was included in the 2001 State Plan. According to the 2000 Census, there were 3,116,867

households in 1999. Econsult anticipated 3,693,378 households by 2018 or an average annual

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increase of 30,342 housing units. Allowing for a 5.4% vacancy rate in 2018 total housing units, as per

the growth share methodology, the net change in housing units from 1999-2018 is anticipated in the

rules at 377,190 units with a prospective need of 115,666 units. However, utilizing information on

household projections in the State Plan, as envisioned in the Fair Housing Act, the statewide

prospective need would be much less. The CUPR data from the 2001 State Plan anticipated

3,526,633 total households by 2020 or an average annual increase of approximately 19,513 housing

units. Therefore, the State Plan only anticipated a total of 3,487,608 households by 2018,

approximately 205,770 units (45%) less than what was envisioned by Econsult in the proposed rules.

Therefore, using the projected growth in households from the State Plan net housing change from

1999 to 2018 would be only 182,416 units (allowing for a 5.4% vacancy rate in 2018 total housing

units as per the growth share methodology). Based on the State Plan, the Total Prospective Need

from 1999-2018 should only be 53,777 units, much lower than the 115,666 units envisioned in the

proposed rules.

The methodology used by COAH in calculating total projected need also allows for an adjustment to

projected need based on "Non-Institutional Group Quarters". According to Appendix A in the rules,

Group Quarters seems to include population estimates for "correctional facilities" as well as other

needs such as the homeless and assisted living facilities. As such, the Growth Share methodology

seems to artificially inflate projected housing need based on a hypothetical increase in prison

population. The rules estimated the 2000 Group Quarters population at 36,139 contributing to an

additional housing need to address Group Quarter demand of 8,812 units statewide. According to the

NJ Department of Corrections, the prison population in New Jersey in 2000 was approximately

30,000. Subtracting the prison population from the calculation of Group Quarters would further

reduce the prospective need from 53,777 to 50,101 units.

Prior to adoption of the proposed rules the Growth Share methodology should be revised to

incorporate more reasonable estimates of growth in households based on the State Plan, as well as,

exclude prison population from the calculation of total prospective need.

19) N.J.A.C. 5:94 - APPENDIX F Allocating Growth to Municipalities: The household and employment

projections are not consistent with the State Plan, are not sustainable given limitations in water and

wastewater capacity and are therefore inconsistent with the provisions of the Fair Housing Act.

In carrying out its duties, the Fair Housing Act charges COAH with determining present and

prospective need based on a consideration of the following factors:

preservation purposes,

branches of government, and the State Plan in determining present and prospective need.

COAH established the projected need for affordable housing based on household and employment

projections that are included in Appendix F of the rules. These projections do not give adequate

weight or consideration of the factors enumerated in the Fair Housing Act, including:

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or agricultural and farmland preservation purposes,

decisions of other branches of government.

Based upon a preliminary analysis conducted by Clinton Township the regional and statewide

projected growth in households is as much as 20-50% greater than that envisioned in the State Plan

and would require an increase in the rate of employment by more than 400% when compared with

historic trends.

Prior to rule adoption, COAH should clarify the discrepancy between projected increases in

household and employment when compared with comparable data available from the State Plan and

NJ Department of Labor. In addition, COAH should explain what the likely affect will be to household

and employment projections included in the proposed rules if all the factors for determining present

and prospective need enumerated in the Fair Housing Act are taken into consideration.

20) N.J.A.C. 5:94 - APPENDIX F Analysis of Vacant and Its Capacity to Support Future Growth: The

analysis of vacant land and development capacity included in the rules is not consistent with the

provisions of the Fair Housing Act and as such can not be used to validate the household and

employment projections included in the rules.

In the Smart Growth Statement the proposed rules assert that the delivery of affordable housing is

based on availability of infrastructure and consistency with the state plan. The proposed rules further

state that it has determined that the housing need could be accommodated in the State’s growth

areas, based upon a vacant land study conducted by Rutgers University (the NCNBR Study).

However, in section 4.7 of the NCNBR Report it states that they "did not use water and wastewater

treatment capacity data to evaluate whether the vacant land capacity estimates … generate water

demand that exceeds the capacity of the local provider or ground water resource, or effluent flows

that exceed the treatment capacity of any sewer service area". Therefore, COAH has not yet

determined that there is sufficient infrastructure capacity available to support the growth envisioned in

the proposed rules, as required by the Fair Housing Act.

The proposed rules relied on state planning designations from the 2001 State Plan even though the

State Planning Commission (SPC) has been undergoing Cross Acceptance with Hunterdon County

for several years. In January 2007 the SPC released a preliminary State Plan Map based on updated

information provided by state agencies, and subsequently amended the preliminary state plan map in

August of 2007 as a result of changes agreed to during cross acceptance which were available at

The growth projections included in the proposed rules do not reflect changes made in the State Plan

as a result of cross acceptance.

Clinton Township is also within the Highlands Region of New Jersey. The State Plan establishes the

Highlands Region as a Special Resource Area including a goal to "undertake a regional capacity

analysis to determine levels and locations of growth that can be sustained within the Highlands

Region while maintaining the functional integrity of the regional ecosystems, agriculture, water

supplies and local community character". As a result of the passage of the Highlands Water

Protection and Planning Act in 2004 the duty for conducting that regional capacity analysis was given

to the Highlands Council. Numerous studies and reports on the Region’s development capacity have

been released by Highlands Council prior to the rule proposal date and are available at

available to COAH for use in developing its rules. According to these studies there is clearly

insufficient water and wastewater infrastructure or capacity to support the growth envisioned in the

proposed rules.

The capacity of growth envisioned in the rules for Clinton Township does not reflect the changes

made to the State Plan agreed to by the Office of Smart Growth, nor does it recognize limitations in

water or wastewater capacity, and anticipates as much as a 30 fold increase in growth capacity from

what is envisioned by other government agencies.

As such the prospective need established in the rules are neither realistic nor consistent with the

provisions of the State Plan or Fair Housing Act which acknowledges the need to provide adjustments

in prospective need "whenever…adequate public facilities and infrastructure capacities are not

available"

The proposed rules should be amended to include growth projections and prospective need that are

consistent with the State Plan and the Highlands Plan, based upon limitations in infrastructure

capacity giving appropriate weight to pertinent research studies, government reports, and decisions of

other branches of government.

21) Supplemental Data: COAH should provide additional opportunity for public comment based on

supplemental information in support of the rule proposal that was released after the rule proposal

date.

The following comments are provided in response to the supplemental technical information released

by COAH one week prior to the close of public comment period:

1) The information released by COAH includes data that is essential to an understanding of how the

agency determined municipal growth allocations and as such affordable housing obligations that are

central to the purpose of the proposed rule that were released after the date of rule proposal. For

example, the data released provides the technical basis of how the agency determined whether there

was sufficient vacant land and capacity to support projected increases in population and employment,

and how they estimated increases in population and employment through 2018 which served as the

basis for determining the regional and statewide affordable housing need and a municipalities fair

share in accordance with the requirements and authority under the Fair Housing Act.

2) The information includes data that was not previously publicly available such as information on

environmentally constrained lands, development potential of lands, estimates on population and

employment growth projections. In many cases this information is either not attributed to a public

source or represents the proprietary work product of consultants retained by COAH to establish the

technical basis of the proposed rule.

4) There is no explanation of the source or terms of art used in the information to allow an

interested party the opportunity to understand its meaning. For example, the data released by COAH

includes the calculations of each municipality's historical build-out levels in the respective County that

are an essential element to establishing a municipalities growth share obligation. This information

includes data referred to as "hank_post02_capacity_units" without providing any explanation of what

that term means anywhere in the rule proposal.

5) There are factual errors and omissions in the published information that need to be addressed

prior to rule adoption. The data released by COAH included a GIS file entitled "DEP Septic Density

Limits" which was used to determine the growth capacity of a municipality. The information contained

in this file includes terms of art that are not explained in the rule proposal, and erroneously shows

portions of Hunterdon County as draining to the Maurice River (Cumberland County) and Toms River

(Ocean County).

Mayor Nick Corcodilos: Clinton Township

Mayor Frank Mazza: Union Township

Mayor Patricia Flannery: Township of Bridgewater

Mayor Christine Schaumburg: Town of Clinton

Mayor Tom Auriemma: Readington Township

Mayor William Voyce: Tewksbury Township

Mayor David Dempski: Washington Township (Warren)

Mayor Rob Walton: Borough of Hampton

Mayor Steven Tarshis: Franklin Township

Mayor Mark Paradis: Lebanon Borough

February 5, 2008

Joseph V. Doria, Jr., Commissioner

New Jersey Department of Community Affairs

101 South Broad Street

P. O. Box 800

Trenton, New Jersey 08625-0800

Re: Proposed Affordable Housing Regulations

Dear Commissioner Doria:

We are members of The 7 Town Group, an assembly of mayors of municipalities on or near the Interstate

Route 78/State Route 22 Corridor, and others. (The Group was formed several years ago to address

regional issues of common interest to our towns, and it has grown beyond its name.) We write to express

our objection to the Third Round Affordable Housing Rules made public on December 17, 2007. Our

concerns will be outlined further in forthcoming resolutions from our elected bodies, and in formal

comments to COAH.

These regulations, if adopted, will impose unreasonable requirements upon our municipalities, create

unsustainable Growth Share ratios, impose large retroactive obligations which will serve to undermine

prior compliance efforts, have a negative impact upon economic development, and require taxpayers in

our municipalities to suffer a higher tax burden. We urge the proposal be substantially revised or rejected

by the Council on Affordable Housing.

Under the proposal, our municipalities are being required to plan for affordable housing based upon

growth which is unlikely to occur. We view the approach by the consultants to be flawed in many

respects. They viewed only a very narrow window of development that occurred prior to Highlands

Legislation, Wastewater Management Regulations, and other regulatory provisions, and then made faulty

assumptions about continued growth from 2002 through 2018. No real consideration was given to the

impact of the Highlands Regulations, requirements for septic and ground water discharge, the impact of

Joseph V. Doria, Jr., Commissioner

Category 1 Streams, the lack of sewer infrastructure, and the extent of the availability of developable land

in each municipality, as well as a host of other practical considerations affecting development.

Economic development will be negatively impacted by these aggressive Growth Share ratios. For

instance, municipalities will be required to provide one affordable unit for: each four residential market

units; each 5,714 square feet of office space; each 9,412 square feet of retail space. Municipalities may

pass along the obligation to a developer based upon a Growth Share Ordinance, collect a development

fee of up to 1.5% of market value for residential development, and 3.0% for commercial development, or

collect a payment in lieu of construction capped at $145,903. Developers will struggle to satisfy the

Growth Share ratios in prospective development, whether it be satisfied by actual construction or

payment in lieu. Payment in lieu, alone, will add over $25 per square foot to the cost of office

construction. These added costs and obligations are sure to have impact on attracting quality

development as we in the Route 78 Corridor continue to compete with Pennsylvania.

Moreover, municipalities that do not opt to impose this heavy construction burden on developers, will be

forced to burden property taxpayers for this prospective Growth Share obligation. The cost of Regional

Contribution Agreements is to be increased to $67,000 per unit with no commensurate funding source.

We note that no rationale has been provided as to why the cost of an RCA is being increased to such an

extent, and we have concern the proposal will create a chilling effect upon the statutorily recognized

compliance mechanism which will ultimately harm rural, suburban and urban municipalities alike. At even

a 1.5% development fee, in order for four new residential units to fund an RCA unit, the new units would

have to sell for an average price of over $1.1 million, far above the existing average sale price. An office

building, even at a 3.0% development fee, would have to have a value of almost $400 per square foot to

fund an RCA, again, far above market value. The shortfall that will result will be forced to be paid for by

property taxpayers. Similarly, payments in lieu of construction are insufficient to pay for municipal

construction of units, because the proposal understates construction costs and overstates the average

sale price of units. Again, recourse would have to be the property taxpayer. The lack of funding sources

to satisfy the compliance mechanisms, the arbitrary increase in the cost of compliance, and the artificial

caps placed upon revenue sources will all have the effect of burdening our property taxpayers. We view

such burden to be in violation of the Fair Housing Act, which provides the system shall not be designed to

require municipalities to raise or expend municipal revenues to provide for affordable housing.

The retroactive obligation being imposed by the proposed regulations is even more insidious to the

taxpayers. Many municipalities adopted Growth Share ordinances under the 2004 regulations, which

provided residential developers had to construct one affordable housing unit for each eight market rate

units constructed. These proposed regulations reward those efforts by assigning an even higher

affordable housing obligation based upon those developments, with no means to recapture the obligation.

Additionally, Second Round obligations, back to 1987, are proposed to be revised, and a retroactive

Growth Share obligation, more aggressive than the earlier regulations, is to be imposed back to 2004. All

of these modifications will have dramatic impact upon property taxpayers. The same problems we had

identified with reference to the prospective Growth Share obligation, the mechanisms for compliance and

funding sources, applies more so to this retroactive obligation. Developers, struggling to satisfy their

prospective Growth Share obligation, will not be able to be used to satisfy any retroactive obligation. As a

result, the various funding mechanisms, whether they be through RCA agreements or municipal

construction, will have to be paid for by the local property taxpayer. While it may be argued there is some

funding mechanism provided for the prospective Growth Share obligation, it is abundantly clear there is

no funding mechanism provided for the large retroactive obligations now being imposed.

We implore you, the members of the Council, and the COAH staff, to recognize that there is a limit to

what municipalities and developers can be called upon to satisfy in terms of an affordable housing

obligation. Growth Share, as a concept, can work on a prospective basis, if the ratios are reasonable and

sustainable. These proposed regulations are unworkable, will have negative impact upon economic

development in the State, and most importantly to us, will over-burden our property taxpayers.