Dispute Over Affordable Housing Obligations

By Briana Vannozzi

A five-bedroom, nearly $500,000 house in South Jersey with a salt water pool. A 3.5-bath, sprawling estate in Toms River with a fitness room, also listed for half a million dollars.

These are some of the homes affordable housing advocates say have been included in municipalities’ data to reduce their affordable housing obligations.

“The towns came out with a study in the past month or so that revealed they thought half million dollar plus houses, not just a few — tens of thousands of homes over $300,000 to $400,000 they claim are affordable and should reduce what towns have to allow in their borders,” said Fair Share Housing Center Executive Director Kevin Walsh.

It’s the latest controversy in an ongoing dispute between Econsult — a private firm hired by 250 municipalities fighting affordable housing calculations — and Fair Share Housing Center.

“We’ve predicted for a 26-year period from 1999 to 2025 the need for housing for working families, people with disabilities and seniors on fixed incomes is over 200,000 homes. The municipalities’ experts have said it’s less than 40,000,” Walsh said.

The group analyzed Econsult’s database of low income housing units.

In it, they found 20,000 homes sold for $300,000 or more and more than 400 properties had sold for $500,000. Walsh explains the firm used a method called filtering — for aging homes — in their calculations.

“What Econsult did was look at half a million transactions that took place between 2000 and 2014 and looked at a unit that was sold twice in that window. If a unit went from unaffordable to affordable, it filtered down. If it went the from affordable to unaffordable, it filtered up. And what they did was they netted how many units filtered down,” said Attorney Jeffrey Surenian.

An attorney for Econsult explains the formula — with its margin for error — has been used and approved by courts for decades. Arguing those half a million dollar homes account for just a fraction of a percent in the overall number.

Should those homes even at one-tenth of a percent of the total units listed at half a million dollars be included at all though?

“At the end of the day, you need a methodology that makes sense and what’s important is does the method as a whole make sense than any outliers or cherry picked numbers?” Surenian said.

Surenian says experts within the firm are looking at the data and will be responding with a report in coming days.

Municipalities contend Fair Share Housing’s numbers have stifled any settlements because they’re unattainable.

“In the heyday when COAH was hitting all four cylinders and fully functional, there were about 2,000 affordable housing units constructed a year. If you look at what they’re demanding now, they’re demanding 32,000 units a year — 16 times the number that was achieved in COAH’s heyday,” Surenian said.

The state Supreme Court took responsibility for writing the housing rules a year ago, after it dismantled the agency tasked — and failed — in doing so. Trials will begin in May and June in different counties throughout the state.