1. 1
UPDATED PUBLIC POLICY MEMORANDUM
Date: April 25, 2016
To: The Honorable Michael Venezia, Mayor, Township of Bloomfield, N.J. and
Dr. Wartyna Davis, Chair of Council Rent Control Study Committee
Copy: Corporation Counsel, Michael J. Parlavecchio, Esq.
From: Stephen V. St. Hilaire, homeowner, 11 HawthorneAve., Bloomfield, N.J.
_______________________________________________________________
Introduction
Thissupplemental update issubmittedtothe Council asa resultof Corporation Counsel Michael
Parlavecchio’sinvitationtothe publicatthe Twp. Council’sApril 18,2016 meeting. Thisisa
supplemental update tomyMarch 26, 2015 “PublicPolicyMemorandum –RentControl”whichI
submittedtothe Mayor, Council,TownshipAttorney, andDirectorof CommunityDevelopment. I
presentthisas a homeownerandnotin a representative capacityforanyindividual,groupor
organization. The March 26, 2015 memorandumpresented demographicdata,housingtrends,and
state and federal legal argumentsforthe Townshiptoconsiderinenactingarentcontrol ordinance
whichwouldbe protective of vulnerable renterhouseholds.
AfterI submitted the PublicPolicyMemorandum tothe Township onMarch 26, 2015, the
factual and legal contextunderMt.Laurel and otherlegal authorities changedsomewhatonfairshare
“presentneed”andthe “1999-2015 gap period”affordable housingobligationsof N.J.municipalities;
newrelevantdatahasbeenreleasedoruncovered fromthe Township throughOPRActrequests;the
U.S. Supreme Courtissuedadecisionon“disparate impact”underTitle VIIIof the CivilRightsActof
1968 (relatedtomunicipal governmentobligationsto“familialstatus”discriminationissuesinthe
provisionof affordablehousingopportunities);HUDdevelopednew fairhousingregulationsrelated to
families;and, HUD developednewHousingandCommunityDevelopmentregulationsrelatedtothe
obligationof municipalitiestoremove barrierstoaffordable housingrelated to“familialstatus”and
zoning. All of these newdevelopmentsare discussedbelow. (See “Conclusion”atpp. 27-28, here for
the call toaction.)
Thisupdatedsupplemental publicpolicymemorandum takesintoconsiderationthe Township’s
August21, 2015 response tomyOPRActrequestasto the lateststatusof the numberof residential
housingunits(bybedroomdistribution) of all of the projectsthathave beenconstructedand those
currentlyunderdevelopment(OakPond,Avalon,HartzMountain,etc.).
The Township’s174-page response tothatOPRAct request (APPENDIXF) containsresolutions
fromthe TownshipBoardsof PlanningandZoning. Idistilledthose pages intoaconcise summaryfor
you(APPENDIX C) of that Board’sapprovalsof site plansas tothe exactnumberof unitsbuilt--orunder
development--ineachprojectbybedroomdistribution;i.e., studio, 1, and2, bedroomunits.
2. 2
The updatedsupplemental memorandumthatIsubmittoyoutoday discusses,inpart,the
Township’s Mt.Laurel arguable “presentneed”fairshare obligationof 547 unitsof affordable housing
through2025 for Bloomfield lowandmoderate income residentscurrentlylivingin“deficient”housing
conditions;i.e.,overcrowded,lackingplumbingorkitchenfacilities. (Forthe legal andplanningcontext
on this,see the attachedstudybyDr. DavidN. Kinsey,pp.5-7,APPENDIXA,here,revisedinJuly2015,
on what“presentneed”meansandhisstudy’sattachedAppendix A (APPENDIXB,here).
The bottom line isthatthissupplemental memorandumpresentsdata,1
housingtrends (first
Memorandum, PARTSI & II,pp. 4-15) and legal analysisthatstrengthensthe argument thatthere isa
1 See for instance,recent articles and studies thatappeared after my original memorandum: “More Young
Women Waitingto Leave Home, Analysis of Census Data Suggests,” by Tamar Lewin, NY Times, p. 20 (Nov. 12,
2015) which reports on a PEW Research Center study (“[R]ents in some cities havebecome so high as to be
unmanageablefor many young adults,especially thosewith heavy student debt.”)
http://www.nytimes.com/2015/11/12/us/more-young-women-waiting-to-leave-home.html?_r=0 . See PEW
study itself,Nov. 11, 2015: http://www.pewresearch.org/fact-tank/2015/11/11/record-share-of-young-women-
are-living-with-their-parents-relatives/
See also,articleby MaryAnn Spoto, Newark Star-Ledger (NJ.com) entitled “Record number of N.J. residents living
in poverty, study says”(Nov. 12,2015) reportingon 2015 study conducted by Legal Service's Poverty Research
Institute, http://www.lsnj.org/PDFs/Benchmarks2015.pdf ("’The urgency to act is great, becausethe study
confirms that despite significantjob and economic recovery sincethe end of the Great Recession in 2009,poverty
in the Garden State has stubbornly remained at record levels not seen in 50 years,’[Melville] Miller said.”)
http://www.nj.com/news/index.ssf/2015/11/record_number_of_nj_residents_in_poverty_study_fin.html . See
also editorial in Opinion page,p. 20, of Newark Star-Ledger entitled “Finally, a real calculation of poverty in N.J.”
(Nov. 19, 2015)(“Our poverty rate is actually closer to 30 percent, as 2.8 million of our neighbors —including
800,000 children—can beclassified as poor.”)
See also,study, “Out of Reach: Low Wages & High Rents Lock Renters Out,” National Low Income Housing
Coalition (2015),pp.150-151(“In New Jersey [the 5th highest rental cost in the nation,after N.Y.], the Fair Market
Rent (FMR) for a two-bedroom apartment is $1,309.In order to afford this level of rent and uti lities — without
payingmore than 30% of income on housing — a household must earn $4,362 monthly or $52,347 annually.
Assuminga 40-hour work week, 52 weeks per year, this level of income translates into an hourly HousingWageof
$25.17.” For Essex County, the amount ($24.40) is slightly under the state average. Compare Essex Co. to all of
N.J. and to national averages. Essex Co. has 54%renter households compared to 34% for N.J. as a whole. For N.J.
data and national data,respectively,see http://nlihc.org/oor/new-jersey &
http://nlihc.org/sites/default/files/oor/OOR_2015_FULL.pdf .
See also,“America’s Rental Housing: ExpandingOptions for Diverse and Growing Demand,” (“Key Facts”), Joint
Center for HousingStudies of Harvard University (2015),p.3 (“Nearly half (49.3 percent) of all renter households
[in U.S.] spent more than 30% of income on housingin 2014,includingmore than one-quarter (26.4 percent)
devoted more than half of income to housing.) This national data is slightly lower than the Twp’s 2014 ConPlan,p.
16, which states that Bloomfield tenant households paid 51.1%of their adjusted gross incomefor rent and utilities
accordingto 2006-2008 estimates. See footnote 15, here. The “Key Facts” areat:
http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/2015_jchs_rental_report_key_facts.pdf . See entire 44-
pp. report, especially TableA-6,p. 43, on New Jersey statistics, at:
http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/appendix_tables_from_americas_rental_housing_2015_
web.pdf
See full 2015 update table of contents, “The State of the Nation’s Housing”:
http://www.jchs.harvard.edu/research/state_nations_housing
3. 3
“rational basis”and a “sufficientlocal need”forthe Twp.toexercise its“police powers”toenacta
strongrent control ordinance thatexemptsasfew apartments aspossible,withinreason,andthathas
no provision forvacancydecontrol. See, Inganamortv.Boroughof FortLee,62 N.J. 521, 537-538 (1973)
and HuttonPark Gardens,68 N.J.543, 564-565 (1975).
PARTVII: update of March26, 2015 Policy Memorandum(pp. 60-70)-- Response
to Mr. Simoncini’s allegationthat my Public Policy Memorandum, promoting
the enactment of a strong rent control ordinance withno provisionfor vacancy
decontrol, wouldproduce an unconstitutional result.
At the Twp’sCouncil’sConference meetingon April 11,2016, Mr. RonaldSimoncini,lobbyistfor
the local real estate interests,respondedtomy testimony thateveningduringwhichIappealedtothe
Council toretaina progressive attorneyspecialistin rentcontrol toassistinthe draftingof a rentcontrol
ordinance containingthe above-mentionedelements. (Mr.Parlavecchiohadnotyetassumedhis
responsibilities.) Mr.Simoncini statedthathe hadspokentothe formermunicipal attorney,BrianAloia,
Esq.,who allegedlytoldhimthatmyoriginal March26, 2015 PublicPolicyMemorandumwasbasedon
an illegal foundation;towit: mylegal premise forthe Council enactingarentcontrol ordinance was
unconstitutional becauseIwasusing rentcontrol to create a “housingprogram”;whereas,the true legal
foundationforavalidordinance—accordingtoMr. Simoncini/Mr.Aloia--couldonlybe sustainedbylegal
challenge incourtif itwas designed undera“consumerprotection”legal framework.
On the economic push of people leavingNYC for cheaper housing,see articleby Mireya Navarro,“The Great Wall
Divide,” NY Times, p. 1 & 6, “Metropolitan” section (Oct. 25, 2015)(On “hypergentrification”in Chelsea.)
http://www.nytimes.com/2015/10/25/nyregion/in-chelsea-a-great-wealth-divide.html?_r=0
“Savinga New York Neighborhood from Gentrification,”editorial, New York Times, April 22,2016: “[C]rushing
rents and tenant displacementthat have transformed so many working-classblocksof Brooklyn and Queens.”
http://www.nytimes.com/2016/04/23/opinion/saving-a-new-york-neighborhood-from-
gentrification.html?ref=opinion
Daniel McCue, “Staying Afloat: The Ongoing Struggle for AffordableHousing,” Posted on Shelterforce, October 10,
2012
http://www.shelterforce.org/article/2892/staying_afloat_the_ongoing_struggle_for_affordable_housing/
[“The rates of severe housingcostburdens for the lowest-income households arehigh and still growing.From
2007 to 2010,severe costburdens among households earningminimum wage or less rosefrom 64 to 68 percent.
Perhaps even more disturbingis thatthe number of households in this low-incomecategory is growingfaster than
any other group. … . Another path out of cost burdens for low-income renter households is rental assistance—if
they can find it. Accordingto the “2009 HUD WorstCaseNeeds report”:
http://www.nhi.org/go/WorstCaseHousing2009, only one in four very low-income households receivesuch
assistance.And needs are growingmuch faster than assistancelevels. … . With new construction generally unable
to providehousingaffordableto the lowest income groups,preservingthe existingaffordablerental stock is key to
stemming the growth in cost burdens. Declines in the number of low-costrental units over the pastdecade have
made itmore difficultfor low-incomefamilies to find affordablerents without assistance.”]
4. 4
On the assumptionthatMr. Simoncini accuratelycharacterizedMr.Aloia’slegal opinion—
because Ididnot have the same access to Mr. Aloia’scounselthathe apparentlyhad—itissubmitted
that the challenge tomylegal analysisis skewedand misplaced.
Rather, my publicpolicyand legal analysis are primarily foundedonthe State Supreme Court’s
legal conclusionthatamunicipalitymayutilizedstate statutory“police powers”toenacta rentcontrol
ordinance toprotectincome-vulnerabletenants wherethere isfoundtobe a “sufficientlocal need.”
The publicpolicyanalysisthatIpresented onMarch 26, 2015—based ondemographicanalysisand
housingtrends—aswell aslegal analysisof federallaw (CDBG,Title VIIIof civil rightsact, Section8, etc.),
and state law (N.J.Law AgainstDiscrimination, Mt.Laurel decisions), complementsandstrengthens that
argumentfora strongrent control ordinance thatis authorized underthe N.J.Supreme Court’s
conventional “police power”legal analysisthatisfoundedonthe abilityof municipalitiestoprotect
income-vulnerable tenantsfromharm where there isfoundtobe “a sufficientlocal need.” My
argumentisthat the Twp’s legal omissions,infailingtomeetits federal CDBG(dutytoremove “barriers
to affordability”),fairhousingand Mt.Laurel fair share programmaticobligations, exacerbatesthat
“local need”and createsthe obligationinthe Twp. toremedythatneedby enactinga rentcontrol
ordinance underits“police powers. Itisthe veryabsence of anadequate “programmatic”housing
plan—underCDBGregulations,fairhousinglaws,Mt.Laurel affordable housingobligations,andthe
Twp’s2008 inclusionaryzoningordinance--thatdrivesthe needforastrong rentcontrol ordinance
underthe Twp’s “police powers”to mitigate andcompensate forthese federal and State legal
omissions.
InHelmsleyv.Boro.of Ft. Lee,78 N.J.200, 209 (1978), the N.J.Supreme Courtsummarizedits
caseson the legal use of municipal police powerasthe foundationforthe enactmentof rentcontrol
ordinances:
Municipal authoritytoenactrent control ordinancesunderthe police powerdelegated
by N.J.S.A.40:48-2 was recognizedin Inganamortv.Boroughof Fort Lee,supra,62 N.J.
521 (1973). A rentcontrol ordinance isa validexercise of municipal powerif there isany
rational basisforthe enactment. Brunetti v.Boroughof New Milford,supra,68 N.J.at
594; Troy HillsVillage,supra,68 N.J.at 616; HuttonPark Gardens,supra,68 N.J.at 564-
65.
In sustainingthe municipal police powerstoenacta rent control ordinance underthe above
statute,the Supreme Courtin Inganamortv.Boroughof Fort Lee,supra,62 N.J. at 537-538, indicated
that the rightof propertymaybe restrained because of “asufficientlocal need”:
That control of rentsaffectsthe exercise of the righttocontract withrespectto
propertyisundeniable.Butthe righttocontract issubjecttothe police powerandno
lesssowhenthe police powerisexertedatmunicipal level. [Citationomitted.] Whether
an ordinance relatestozoning,orcontainsa housingcode,orimposesuponthe
landlorddutiesrelatingtohealth,itnecessarilylimitsthe use of propertyorthe right to
contract withrespectto it.That the ordinance imposesrestraintswhichthe State law
doesnot,doesnot spell outaconflictbetweenState andlocal law.Onthe contrarythe
absence of a statutoryrestraintisthe veryoccasionfor municipal initiative. The police
5. 5
powerisvestedinlocal governmenttothe veryendthatthe right of propertymaybe
restrainedwhenitoughttobe because of a sufficientlocal need.2
[Emphasismine.]
The Supreme Court,inthe earlypart of its decisionin Inganamort,supra,62 N.J.at 537, found:
We mustassume there isa critical shortage of the housingcoveredbythe several
ordinanceshere involvedandthattenants,trappedbythe fact, are beingexploited.The
judgmentswere enteredonpretrial motionsinwhichthisfactual premise wasnot
challenged.
There isclearlya “rational basis,”underHelmsley,supra78 N.J.at 209, for a municipality like
Bloomfield--givenitsdemographicprofile--toenactastrongrent control ordinance. The Supreme Court
inHutton Park Gardensv.West Orange TownCouncil,supra, 68 N.J. at 562, fn.8 (1975), elaboratedon
thistestwhenthere wasa substantive due processconstitutional challengetoa rentcontrol ordinance:
The sole task of the Court isto determine whetherthe legislationiswithoutareasonable
supportingfactual basisviewedasapolice powermeasure.Inanyevent,aswill be more
thoroughlydiscussedin TroyHillsVillage [v.Parsipany-Troy HillsTp.Council,68N.J.604], supra
at PointII,protectionof a landlord'sinvestmentisadequatelyprovidedbythe requirementthat
rentlevelingordinancespermitrecoveryof a"justand reasonable"rate of return. [Emphasis
mine.]
HuttonPark Gardens,supra, 68 N.J.543, 564-565, establishedaverydifficultburdenfora
challengerto meettooverturna municipal exerciseof itspolice powerinenactingarentcontrol
ordinance:
Municipalitieshave the powerandauthoritytoenactordinancesinsupportof the police
power.Municipal ordinances,likestatutes,carryapresumptionof validity.[Citationsomitted].
The presumptionisnotan irrebuttable one,[citationsomitted],butitplacesa heavyburdenon
the party seekingtooverturnthe ordinance.Legislativebodiesare presumedtoacton the basis
of adequate factual supportand,absentasufficientshowingtothe contrary,it will be assumed
that theirenactmentsrestuponsome rational basiswithintheirknowledgeandexperience.
[Citationsomitted.] Thispresumptioncanbe overcome onlybyproofsthatpreclude the
possibilitythatthere couldhave beenanysetof factsknownto the legislative bodyorwhich
couldreasonablybe assumedtohave beenknownwhichwouldrationallysupportaconclusion
that the enactmentisinthe publicinterest. [Citationsomitted.] The judiciarywill notevaluate
the weightof the evidence forandagainstthe enactmentnorreview the wisdomof any
determinationof policywhichthe legislative bodymighthave made. [Emphasismine.]
2 See also,Hutton Park Gardens v. West Orange Town Council,68 N.J. 543, 555-556 (1975): “Municipal rent
control is,of course,but one example of the larger and more pervasivephenomenon of governmental regulation
of prices under the policepower. For constitutional purposes,rentcontrol is indistinguishablefromother types of
governmental priceregulation.Despite the permanence and concreteness of real property, and the special place
accorded it by the common lawas expounded by the early commentators, its commercial useis no less subjectto
regulation under the policepower than other, more ephemeral, goods and services.[Citation and footnote
omitted.] The renting of residential property is as much an essential enterpriseas the retail saleof food-stuffs,the
extraction and processingof natural resources,the operation of a railroad,or the conduct of a banking business,
[citation omitted], and equally subjectto public regulation when the need arises.” [Emphasis mine.]
6. 6
In the presentBloomfield control rentdebate context,the Twp.hasadmitted,inseveral of its
documentsthathave been recently submittedtoHUDseekingCDBGfundingforlow- andmoderate
income households,thatthere is clearly asevere needforaffordablerental housingfor“cost-burdened”
local households andothers. Thisconstitutes“areasonable supportingfactual basisviewedasa police
powermeasure”underHuttonParkGardens,supra,at 562, fn.8.3
(See definition of “costburdened”at
pp.8-9, 11, of my March 26, 2015 PublicPolicyMemorandum;andneedforaffordable rentalhousingin
the Twp’s2010 Fair HousingPlan,pp. 24, 54-56, 61-66, 69; and its2014 Five-YearCDBGConsolidated
Plan, pp. 3, 5, 15, 16. In addition, the Twp.specificallystatesthatitswaitinglistforits270 unitsof it
Section8 HousingChoice Voucherprogram ishighandit has stoppedtakingapplicationsforthis
resource because of highdemand. See myPPM,at pp. 11 & 40-51, on needforHCV recipientstohave
opportunitiestohave housingchoice inraciallyandeconomicallydiversepartsof the Twp.)
On February26, 2016, I sentto youa recentstudy,datedDecember2015, on the 40-year
historyof rentcontrol inNewJersey. Isubmitthat it isuseful inrefutingmanyof the economicpointsin
the N.J.contextthatMr. RonaldSimoncini made inhispublicappearance atthe December14,2015
regularCouncil meeting: JoshuaD.Ambrosius,WilliamJ.Gilderbloom,WilliamJ.Steel,WestleyL.
Meares,and Keating,Dennis,“Fortyyearsof rentcontrol:Re-examiningN.J.moderate local policies
afterthe great recession,”Cities:The InternationalJournal of Urban& Planning,Vol.49,Dec. 2015, pp.
121-133. http://www.sciencedirect.com/science/journal/02642751/49 [See attachedstudyhere at
the orange icon.]
That study,at p. 131, referstoan article by Brenzel,K.“Rentcontrol battle inHobokenends
aftergroup pushingderegulationwithdrawschallenge,” NJ.com.(2014,February19, 2014)
<http://www.nj.com/hudson/index.ssf/2014/02/rent_control_battle_in_hoboken_ends_after_group_p
ushing_deregulation_withdraws_challenge.html>Retrieved07.03.14. Note that Brenzel’sarticle refers
to the work of the lobbyist,Mr.RonaldSimoncini,inHoboken. The Cities study,atpp.130-131, then
characterizesthe opponentsof rentcontrol inHobokenasa “contrived‘tax payer’organization.”
At pp.131-132 of this12-pp. report,underthe subtopic,“Policyimplicationsandconclusions,”
the authors of the evaluation of 40 yearsof rentcontrol in New Jersey,conclude,inpart:
Thisdebate isongoinginNewJersey—asdemonstratedbythe recentbattlesinHobokenand
othercitiesoverwhethertokeeporscrap rentcontrol.Our findingssuggestthatthispassion,
for or against,maybe misdirectedenergy.Itdoesnotappearthat these ordinances,netother
interveningfactors,have anycommunity-wide impactonrents,rental qualityorquantity,
propertyappreciation,orforeclosure ratesinthe citiesthathave them.Theymaybenefitthe
subsetof residentsenjoyinglowerrentsbypreventingrentgouging,buttheyhave nomacro
effectonthe medianrent.Perhapsadvocacy energiesare betterspentpromotingaffordability
throughothermeans.Perhapssupportersof the free marketshouldfindotherareasof
governmentregulationtolambast.Rentcontrol isnotharmingthe citiesof New Jersey. ….
3 Hutton Park Gardens, supra,68 N.J. at 562-563: “N.J. Const. (1947), Art. 1, § 1, likethe federal due process
clause,makes the constitutionality of governmental priceregulation dependent on neither the existence of an
‘emergency,’ [footnote 8 and citations omitted], nor any determination that the industry regulated is ‘affected by a
public interest’in some special manner. [Citations omitted.] Either of those factors may, however, reinforce the
reasonableness of a particular regulation under challenge.” [Emphasis mine.]
7. 7
[131/132] Acrossthe nationrental affordabilityworsensandrentsinNew Jersey(whetherrent
controlledornot) are muchhigherthanmost of the nation(National Low Income Housing
Coalition,2015).The intendedimpactsof New Jerseyrentcontrol ordinancesovera40-year
period seemminimalwhencomparedtocitieswithoutregulations.Housingactivistsand
policymakersneedtolookatadditional kindsof approachestoaddressthe post-crashrental
housingaffordabilitycrisis.
Landlordsare ultimatelyprotectedunderHuttonParkGardens,supra,68 N.J.at 572 in applying
for a hardshiprentincrease tomeettheirconstitutional righttoreceive afairreturnontheir
investment:
Everyrent control ordinance mustbe deemedtointend,andwillbe soread,topermitproperty
ownerstoapplyto the local administrative agencyforrelief onthe groundthatthe regulation
entitlesthe ownertoa justand reasonable rate of return.
In myMarch 26, 2015 PublicPolicyMemorandum,PARTVI.A,p. 54,it ispointedoutthat the
N.J.Supreme Courtin Helmsleyv.Boro.of Ft.Lee,78 N.J.200, 210-211 (1978) statedthat there are
three separate fair-right-of-returnformulastoaddress alandlord’sconstitutionalrighttoa fairreturn on
itsinvestment.4
So,if a landlordthinksthatitis notreceivingafairreturnon its investment,itfilesfora
hardshipapplicationandopensitsbookstothe RentLevelingBoard. The landlordthushasa
substantive constitutional due processremedy. The problemisthat some landlordsdonotwantto
opentheirbooks tothe lightof day,whichcan reveal mistakesand/orrefinancingtransactionswhich
can hide profits.
Some owners after2001, whenthe interestrateswere low,refinancedtheirmortgages and
saveda bundle. Then,some tookthe profitsfrom those transactionsandboughtotherrental properties
at a time whenthe rental marketwasboomingandincreasedtheirprofits further. Bloomfield’srental
vacancy rate, as reflectedinthe 2010 U.S. Censuswas3.07%: a rate lowerthanitwas at the time the
Twp’srentcontrol ordinance wasenactedinthe late 1980s. (The rentcontrol ordinance was
terminatedin1994, exceptfor“grandfathered”tenanthouseholds.) Thislowertenancyvacancyrate,
driven,inpartby home foreclosureswithformerhomeownerslookingforapartments,ledtoanupward
pushon rents; i.e., lowervacancyratesledto higherrentswithtenantincome remainingflatthroughout
the 2007-2008 recessionandbeyond. [See myMarch 26, 2015 PublicPolicyMemorandum, PARTVII,
pp.60-70, fora full discussionof the dataand trends.]
4 See, 78 N.J. supra.at210-211,were the Supreme Court outlined the history of the constitutional question,
discussingthree basic approachesto defining“fair return”:
“There are at leastthree basic approaches to definingfair return. In an early regulatory case,the United
States Supreme Court decreed that return on fair valuemust be the criterion for confiscation.[footnote
omitted.] Smyth v. Ames, 169 U.S. 466 (1898), decree modified, 171 U.S. 361 (1898).The Court later
modified this position,approving(butnot mandating) the useof return on investment. Federal Power
Comm'n v. Hope Natural Gas Co., 320 U.S. 591 (1944). A third standard,the fraction of gross income
comprised by operating profits,was employed in the now-expired New Jersey Rent Control Law, L. 1953 c.
216. We upheld its constitutionality in Jamouneau v. Harner, 16 N.J. 500, 526-28 (1954),cert. denied, 349
U.S. 904 (1955).”
8. 8
At the April 18, 2016 regular Twp. Council meeting I submitted the following
suggestions to strengthen the draft ordinance that the Council ultimately tabled and did not
introduce as a first reading:
• The definitionof capital improvementistiedtoIRSdepreciable items. Thatis a mistake.
It shouldonlybe fornewphysical changesthatprovide anew benefittoall tenantsthatwasnot
provided before. Maintenance replacements(notsimplyrepairs) like roofsandboilersdonotprovide
anythingnew. Theygetdone whenthe costof repairisgreaterthan the cost of replacement. Thatisa
cost of doingbusinessthatisbuiltintothe rent. Anefficientoperatorwill have areserve for
replacements.
• As to the definitionof “rent,”the provisionshouldbe changedtoread: “Nocharges
shall be permittedforlate rent,whethertermedalate rental fee orinterestonrentpaidlate,inexcess
of [Twenty($20.00)] Thirty-Five ($35.00) Dollars,returnedcheckfeesinexcess[Twenty($20)] Thirty-
Five ($35.00) Dollars,or any othersimilarcharges.
• Exemptingdwellingswith5or fewerunitsdoesnotmake anysense. Tenantsinsmaller
buildings have justasmuchneedtobe protectedfromunreasonable rentincreasesasthose inlarger
buildings. Infact,tenantsinsmallerbuildingsare typicallyof lowerincome andhave more questionable
credithistories. Theyare more vulnerable,notless.The ideathatthe ownersof smallerbuildingshave
some special needtobe able togouge rentsis unsupportable. Theyare runningbusinesses,justasina
largerbuilding,are notlimitedintheirinitial rentlevels,andshouldthereforebe able tobe limitedto
reasonable rentincreaseswithoutbeingdeprivedof ajustand reasonable return. Theyare,also,
frequentlyownersof manysuchsmall buildings,andthustotallycomparabletoownersof a large
building. The onlyexemptionthatmightmake sense is forowner-occupied2- or3-unitdwellings,as
these are not protectedbythe EvictionforJustCause law. Rent control withoutevictionprotectionhas
limitedvalue. Fewerexemptionsprovidesformore affordable housingopportunitiesforlow- and
moderate income households:(1) Over51% of tenanthouseholdsinthe Twp.whoare low- and
moderate income (i.e.,earninglessthan80% of medianincome) paymore than30% of theiradjusted
gross income inrentandutilities;(2) the lowerthe numberof unitsexempt,the higherthe opportunity
of tenantswithSec.8 voucherstobe successful infindingapartmentsthatare affordable;(3) the
vacancy rate for rental housinginthe Twp.is 3.07% makingitdifficultforcost-burdenedtenant
householdstolocate affordable housing; and, (4) loweringthe numberof exemptunitspromotesmore
housingopportunitiesforracial minorityandfamiliestomove fromareasof highracial andlow-income
concentrationinthe Twp. (See myMarch 26, 2015 PublicPolicyMemorandum, pp.60-70,for a more
exhaustivereasonsforthiscoverage andwhynovacancy decontrol shouldbe permittedinan
ordinance.)
• Delete: “Section435-7D. Paymentof rental increase fortwoconsecutiveyearsshall be
construedtobe an agreedincrease and notsubjecttothe provisionsof thischapterexceptthatinthe
eventthatthe Board determinesthatthe landlordhasnotserveduponthe tenantthe rental statement
setforth in§ 435-1. The Board shall waive the two-yearlimitationsperiod.” Thisisa large loophole for
owners. Waivernotionsshouldbe decidedbycourtsusingstatutoryandcommonlaw principles.
9. 9
• The partial newconstructionexemption(redevelopmentbased) isirrelevant,aspost-
1987 newconstructionisexemptfromrentcontrol for 30 years(or lengthof conventionalmortgage)
understate law.
• The formulafor fairreturnon landlord’sinvestment: Mostof “fairnet operatingincome”
(FNOI) formulasare arbitrary(60%expense ratioiscommon - there are many profitable buildings,
usuallyolderones,thatare above 60%). An investmentbasedformulais,imo,preferable,butitshould
be made clear that the investment,inthiscase equityinvestment,mustbe reducedbyanywithdrawals,
whichusuallyoccurat refinancing. (See 435-10, I and J.) The Boardmust be able to see all refinancing
information. Excessivepurchase price whichresultsinaninflatedmortgage interestexpenseand
inflatedinvestment,shouldbe disallowed. The (new orexisting) ownermustbe bothanefficient
operatorand an efficientinvestor. Suchan investorwouldneverbuyabuildingthatwouldimmediately
(or withinayearor two) and predictablybe ina hardship. The purchase price,investment,and
mortgage interestexpensemustbe reduced,forthe purpose of ahardshipdetermination,tothatwhich
wouldhave beenreasonable. Thismaybe partially,butnotfullyaddressed. One more thingon
hardships. Expensesthatare not expectedtorecureachyear,but ratherhave a useful lifeof more than
one year,shouldbe prorated(dividedbythe numberof yearsintheiruseful life). The Boardshould
receive 5years’worthof annual income/expensestatements(certified) sothatcomparisonsfor
reasonablenesscanbe made,andnon-recurringexpensesidentified.
There shouldbe a severe limitationonvacancyallowances,asvacanciescouldbe filledatlower
rents,yieldinghigherincome andlowerhardship. Managementexpense shouldnotbe allowedinself-
managedbuildings,andshouldbe limitedtonomore than 5%. Administrative(office/lease writing)
expensesare includedinmanagementexpenses.
All contractedexpensesmustbe arm’slengthandeveryexpense mustbe reasonable.
• There have beencomplaintsthatarent levelingBoardwouldhave highadministrative
costs. The answer,inpart, isto use part of HUD CDBG funds(over$800,000 per year) which,under
federal law,issupposedtogoforthe needsof low- andmoderate income persons. Rightnow,a lotof
those CDBG fundsgo to pave streetsandforpublic relationstopromote the luxurydevelopmental area
inthe BloomfieldAve.corridor. Partof the housingmarketanalysisthatBlfd.isrequired,forinstance,
to provide isidentificationof “barrierstoaffordable housing,”24 CFR §91.210(e): “[The consolidated
planto HUD] mustexplainwhetherthe costof housingorthe incentivestodevelop,maintain,or
improve affordablehousinginthe jurisdictionare affectedbypublicpolicies,particularlybypoliciesof
the jurisdiction,includingtax policiesaffectinglandandotherproperty,landuse controls,zoning
ordinances,buildingcodes,feesandcharges,growthlimits,andpoliciesthataffectthe returnon
residentialinvestment.” (Formore detail onhow the CDBG program worksfor the benefitof low and
moderate income householdsinthiscontext,see federal regulationsinmyMarch 26, 2015 PublicPolicy
Memorandum,pp.15-18 and the Twp’s2010 CDBG 5-yearConsolidatedPlanthatwassubmittedto
HUD. Appendix Btomy PPMforsummaryof HUD’s ConPlan regulations.)
10. 10
PARTIII.E. update of March 26, 2015 Policy Memorandum (pp. 25-40) onMt.
Laurel issues:Twp’s affordable housing “present need”obligation. (Afterthe
date of that Memorandum, the N.J. trial courts have determinedthat there is an
additional affordable housing “gap period”obligation5
for municipalities for the
period1999-2016. Bloomfield’s possible “gap”obligationis not yet resolved.)
Bloomfield’s“PresentNeed” Obligation
In March 2015, the NewJerseySupremeCourtissuedadecisionand anorder statingthatthe
N.J.Council onAffordable Housing(COAH) hadnotmetitsN.J.constitutionalobligationtolow- and
moderate-income households(i.e.,householdswhose income wasunder80 percentof medianincome)
inits failure topromulgate rulessettingthe obligationsof municipalitiesinthe State todeterminetheir
respective fairshare obligationstodevelopaffordable housing forthese vulnerablehouseholds.
Because of COAH’sfailure toact, the Supreme Courtruledthat regional SuperiorCourttrial judgeswere
to be assignedthistaskand municipalities,likeBloomfield,were giventhe opportunitytofile
declaratoryjudgmentmotionstoestablishwhethertheyhada fairshare obligation—calleda“present
need”and/ora “prospective need”—tofacilitate the developmentacertainnumberof affordable
housingunits intheirmunicipalities. Itappearsthatthe Twp. electednottofile sucha motion according
to a response tomy OPRActrequest.
Since the Supreme Court’s decision,the FairShare HousingCenter,one of the petitionersbefore
that Court,commissionedastudyby DavidN.Kinsey,PhD.,FAICP,PP,Kinsey&Hand,to create a
methodologytopresenttothese regional trial courtstoassistthose courtsin calculatingthe fairshare
obligationsof municipalitieswhoare withintheirrespectivevenues. Dr.Kinseyauthoredhisstudy
entitled“New JerseyLowandModerate Income HousingObligationsfor1999-2025 CalculatingUsing
the NJ COAHPriorRound (1987-1999) Methodology”(April16,2015, revisedJuly2015).6
(See Dr.
Kinsey’s APPENDIX A forhis analysisof “presentneed,”pp.5-7.) The formulathathe usedresultedin
5 See analysisbelow,pp. 19-20,for discussion of pending Mt. Laurel fair share“gap” obligation litigation.
6 The New Jersey League of Municipalities commissioned Econsult,Philadelphia,Pa.,to critiqueof Dr. Kinsey’s
study which was issued on September 24, 2015 which challenged his methodology and argued that his “present
need” and “prospective need” fair shareobligationsfor municipalities were inflated. See
http://www.njslom.org/letters/2015-0928-afford-housing.html. The Township of Bloomfield has failed to filea
timely motion for a declaratory judgment in the Superior Court of New Jersey usingthe Econsultcritiqueto
challengeDr. Kinsey’s analysis. See Dr. Kinsey’s updated report, March 16, 2016 in the Ocean Co. context on the
“present need” analysis,pp.13-20. (Full copy of that update at p. 18, fn. 19, here.)
https://www.dropbox.com/sh/pfcj1ccrrtzld3p/AAB3iPYE7hf8DrWLnYrE5V2za/4-6-16%20-%20Barnegat-
%20Appeal%20-in%20support%20of%20amicus%20mtns-%20%20Omnibus%20Appendix%20-final%20s.pdf?dl=0 )
The Twp. has presented no alternativedocumentation demonstrating that its “present need” fair shareobligation
is less than what Dr. Kinsey claimed in his September 24,2015 report. It appears that Bloomfield is content to
ignore the entire Mt. Laurel declaratory judgment process and to hope that no person or entity chal lenges its
performance. It is assumed thatif legally challenged on the “present need” obligation,itwould cite as a defense
the Econsultcritiqueof Dr. Kinsey’s analysis. But,it is disingenuous for Bloomfield to just“sitand wait” for a
possiblelegal challengein the faceits local at-risk “costburdened” renter population given its professed
commitment to the Twp’s “quality of life.”
11. 11
hisassessmentof fairshare obligationsforeverymunicipalityinthe state,includingthe Twp.of
Bloomfield. He determinedthatBloomfielddidnothave a“prospective need”fairshare obligation;
however,he determinedthatithasa “presentneed”fairshare obligation of 547 affordable units
(combinedrental andhomeowner). (See“AppendixA”of hisstudyfor Region2 under“Bloomfield”
whichislabeled APPENDIXB to thisupdatedMemorandum.)
In orderto understand“presentneed”affordable housingobligation,itisuseful tosummarize
Dr. Kinsey’sreportinsalientpart. He statesthat: “COAH excludedcost-burdenedhouseholdsandtheir
affordable housingneedsfrommunicipalhousingobligationsunderthe [NJ] FairHousingAct,a
determinationupheldbythe Supreme Court. Consequently,andconsistentwiththe Supreme Court’s
decision,the housingneedsof cost-burdenedhouseholdsare notincludedinthe fairshare housing
methodologypresentedinthisreport. “ [p.2].
“Cost-burdened”householdsare those whoare low and moderate income households (i.e.,who
have incomesunder80% of the area medianincome) whoare payingmore than30% of theirmonthly
adjustedincome forhousingandutilities. Itisto be notedthat these Bloomfieldcost-burdened
householdsare clearlyincome-vulnerable andof concernto the U.S. Departmentof HousingandUrban
Development(HUD) inevaluatingthe Twp’slegal requirementtoremove “barrierstoaffordability”(also
knownas “affordabilityimpediments”) underthe federal HousingandCommunityDevelopmentActof
1974, as amended,andTitle VIIIof the Civil RightsActof 1968, and regulationsthereunder; however,
for the purpose of determiningthe Twp’s“presentneed” legal obligationunderthe state N.J.Fair
HousingAct (i.e.,“Mt. Laurel” legislation), the needsof Bloomfield’s“cost-burdened”households donot
factor intoDr. Kinsey’s“presentneed”calculation underAppendixA of hisstudyto increase the Twp’s
obligationtoprovide more thanthe 547 affordable housingunits.
Dr. Kinsey presented inhisstudyabrief historyof how the N.J.Supreme Courtdevelopedits
“presentneed”standardunderthe N.J.FairHousingActas part of the Court’sconstitutional
interpretation:
The Supreme Courtdirectedthatthe PriorRoundmethodologybe usedtocalculate municipal
presentneed.AsdefinedbyCOAHin itsSecondRoundRulesin1994, “Presentneed”meansthe
sumof indigenousneedandreallocatedpresentneed…. However,the Supreme Courtalso
upheldCOAH’sdecisions,initsthree iterationsof ThirdRoundrule-making,tonolongerinclude
“reallocatedpresentneed”inthe fairshare methodology. The PriorRoundmethodology
defined “indigenousneed”’asdeficienthousingunitsoccupiedbylow andmoderate income
householdswithinamunicipality…. In effect,suchhousingisinneedof rehabilitationtocomply
withapplicable housingcode standards.The PriorRoundmethodologycalculatedthe numberof
lowand moderate income familieslivingin‘deficienthousing’ata subregional level,due to
constraintsonthe availabilityof dataatthe municipal level,andthenallocatedindigenousneed
to municipalities. [Emphasismine.]
Dr. Kinseythenstatesthatdata isnow available atthe municipal level fromthe U.S.Census
Bureauin itsdecennial censusanditsAmericanCommunitySurveyof samplesof the population. He
thenstatesthat hisreport:
[U]sesthe term“PresentNeed,”asdirectedbythe Supreme Court,tomeanthe numberof
deficienthousingunitsoccupiedbylow andmoderate income householdswithina
12. 12
municipality.” PresentNeedisacomponent of amunicipality’sfairshare housingobligations,
whichmay be addressedunderCOAHSecondRoundrules byeitheralocal housing
rehabilitationprogramorbycreatingnew unitsof affordable housing. [Emphasismine.]
Dr. Kinseythenexplainsthe process thathe utilizedincalculatingthe “presentneed”fairshare
affordable housingobligationof municipalitiessuchasBloomfield:
PresentNeediscalculatedinatwo-stepprocess,similartothe processCOAHhas usedto
determine the RehabilitationShare inatwo-stepprocess,mostrecentlyin2014.
First,COAHidentifiedtotal deficienthousingbymunicipalitybyusingthree surrogatesor
indicators:(a) overcrowdinginhousingbuiltbefore 1960,(b) housinglackingcomplete plumbing
facilities,and(c) housinglackingcomplete kitchenfacilities.InitsMarch 2015 decision,the
Supreme Courtruledthatuse of these three surrogateswasacceptable. COAHalsofound
throughPUMS data in2014 that about14.86% of deterioratedunitshadmultipledeficiencies
and made an adjustmenttoavoiddouble counting.
Second,COAHdeterminedthe degree towhichovercrowdedanddeterioratedhousingwould
be occupiedbylowor moderate income householdsineachcounty,using2007-2011 American
CommunitySurveydata,findingarange from48.6% in Sussex Countyto85% inHunterdon
County,withabouta 65.3% statewide average.
COAHthenappliedthose countypercentagestothe non-double-counteddeficienthousingin
each municipality tocompute the RehabilitationShare for eachmunicipality. [Emphasismine.]
In an attemptto ascertainhowDr. Kinseymostlikelyarrivedat547 affordable units as
Bloomfield’s“presentneed”fairshare obligation,we mustlooktosome recentreliabledatasources
that countonlylowand moderate income households(i.e.,incomesunder80% of median) whoare
currently livinginBloomfieldandin overcrowdedanddeterioratedhousing conditions. Recall this
involvescountingonlythose householdswhoare overcrowdin housingbuiltbefore 1960, lackcomplete
plumbingfacilitiesandhousinglackcomplete kitchenfacilities. However,we are NOTto count “cost-
burdened”households(i.e.,those paying30% or more of theiryearlyadjustedincomeforhousingand
utilities).
For thisdata we cite the Twp. of Bloomfield’s 2015-2019 ConsolidatedPlan(“ConPlan”) and
2015 One-YearActionPlanthatthe Twp.,signedbythe Mayor on May 1, 2015, that wassubmittedto
HUD underthe requirementsof the federal Housing&CommunityDevelopmentActof 1974 and
regulationspromulgatedthereunder.7
The Table at p.15 of the CP (below),entitled“HousingNeeds
7 For legal authorities on how the CDBG program works, see HUD’s regulations: 24 CFR §§91.200 to 91.253 and
§§570.302, 570.303,570.495 & 570.496. (See also,Appendix C, p. 130,of the Twp’s 2010 Fair HousingPlan for the
full text of HUD’s “Equal Opportunity & Fair HousingReview Criteria for 24 CFR Subpart O, §570.904(a)(1)(ii)). (The
civil rights protected classes includes “familial status”in addition to the traditional protected classes such as race,
origin,etc. The CDBG regulations requiringtheTwp. to remove “barriers to affordability”arefound at See 24 CFR
§91.200(a), 91.210(e), 91.215(h) and §91.220(g)(j) & (k). Because local governments are required to obey state
laws under HUD regulation 24 CFR §91.225(b)(8), the N.J. Law AgainstDiscrimination (LAD), N.J.S.A. 10:5-4 and
N.J.S.A. 10:5-5 also provides protections to those not expressly referred to in the federal Fair HousingAct: “marital
status,” “affectional or sexual orientation,”“gender identify or expression,”and “source of lawful incomeused for
rental...payments.” (“Familial status”is a protected classunder both federal and state law.)
13. 13
SummaryTables: HousingProblems,”liststhe numberof householdsinBloomfield--bythe separate
categoriesof “renters”and“owners”as well as byincome—whofall withinfourlisted“needs”: (1)
“substandardhousing –lackingcomplete kitchenorplumbingfacilities”;(2) “severelyovercrowded –
with> 1.51 people perroom(andcomplete plumbingorkitchen)”;(3) “Overcrowded –with 1.01 - 1.5
people perroom(andnone of the above problems)”;and,(4) “Housingcostburdengreaterthan 50%
of income (andnone of the above problems)”.8
For purposescheckingDr.Kinsey’scalculationthatBloomfieldhasa“presentneed”obligation
of 547 unitsof affordable housingwe needtoignore itemfour(4) onthe above listand we are notto
count anyof the renterand homeownerhouseholdslistedinthe Table whose incomeis80% or above
the area median(i.e.,”>80-100% AMI”).9
So,the categoriesof householdsinthe three listed“needs”—items(1),(2) and(3)—forrenters
is729; and the for homeownersitis175. The total for bothrentersandhomeownersis904.
As notedthere isa difference of 357 unitsinDr. Kinsey’scalculationof “presentneed”of 547 in
Appendix A of hisstudy and904 unitsfoundinthe Twp’sConPlan,p.15, Table below. UnlessDr.
Kinseyunderstated the “presentneed”fairshare obligation forBloomfield,the difference inthe
numbersmaybe accountedfor statisticallybyDr.Kinsey’sreference inhisstudyatp. 6: “COAHalso
foundthroughPUMS data in 2014 that about14.86% of deterioratedunitshadmultiple deficienciesand
made an adjustmenttoavoiddouble counting.”
8 HUD considers “cost-burdened” those lowand moderate income households (i.e., those with incomes 80% of
area median) who arepayingmore than 30% of their net adjusted income for rent and utilities. See my March 26,
2015 Public Policy Memorandum, p. 8, for more detail on this which is also found in the Twp’s 2014 CP, p. 15.
9 Although not all of lowand moderate income tenants (i.e., households with income under 80% of area median)
who residein “deficient” housing--for Mt. Laurel “present need” purposes—are“cost-burdened,” it is reasonable
to assumethat at least51% arebased on the Twp’s 2006-2008 estimates. See Twp’s 2014 Consolidated Plan,p.
16, submitted to HUD. Extracts arein APPENDIX A to my March 26, 2015 Public Policy Memorandum.
14. 14
Once the “presentneed”fairshare obligationisset--asdeterminedbyDr.KinseyforBloomfield
at 547 affordable housingunits--the nextquestionthatneedstobe addressediswhetherthose units
can be addressedby“eitheralocal housingrehabilitationprogramorbycreatingnew unitsof
15. 15
affordable housing.” See p.6 of Kinsey’sstudyandhisfootnote referencetoCOAH’sregulation,NJAC
5:93-5.1. Clearly,Bloomfieldhassome discretionhere touse bothmethods. However,thatdiscretionis
seriouslycircumscribedby“factsonthe ground”; i.e., (1) by the fact that accordingto the Twp’sCP,
Table,p.15, only125 lowandmoderate income households,of the total listed,are inrental households
that lackplumbingorkitchenfacilities;(2) the vastremainderof the households (approximately422)
whoare in“deficient”housingare overcrowded;and,(3) Bloomfieldhasnotprovidedforthe
developmentof affordable unitsinthe luxuryhousingthatithas promotedinthe face of its municipal
inclusionaryzoningordinance,Chapter112, whichrequiresthe constructionof one (1) affordableunit
for everyfour(4) marketrate unitsthatare developed. Itisto be notedthatit almostimpossible to
abate and rehabilitate the deficientconditionsof overcrowdedhouseholdswithoutrelocatingthemto
affordable units! And,where wouldthoserelocationresourcesbe if notbythe Twp. “creatingnewunits
of affordable housing”?
The N.J.Supreme Court,initsMarch 10, 2015 opinion,__N.J.__ (2015) (slipop.at p. 45),
lookedbeyondthe narrowexclusionof “cost-burdened”householdsinthe fairshare methodology
analysis,andembracedthe trial judge’sconcernfor“cost-burdened”householdsin AMGRealtyCo.v.
Twp.of Warren,207 N.J.Super.388, 422-23 [(Law Div.1984) as to a municipality’saddeddutiesto
“cost-burdened”residentsof amunicipality:
In addressingthe firstiterationof ThirdRoundRules,the AppellateDivisionalsoapprovedthe
“exclu[sionof] the cost-burdenedpoorfromthe presentneedor rehabilitationshare
calculation.”Inre Adoptionof N.J.A.C.5:94 & 5:95, supra,390 N.J.Super.at 36. Indoingso, the
appellate panelnotedthatpre-FHA courtsalsohadallowedexclusionof the “cost-burdened
poor” fromthe fair share formula.Id.at 35 (citingAMG Realty[Co.v.Twp.of Warren],207 N.J.
Super.[388] at 422-23 [(LawDiv.1984)]). The court foundthat COAH’sdecisiontoexcludethe
cost-burdenedpoorwasapermissible exercise of discretion.Id.at36.
Althoughthe BloomfieldTwp’s“cost-burdened”local populationisexcludedfrombeing
countedinthe Mt. Laurel methodologytodeterminethe Twp’s“presentneed”fairshare obligation,itis
significantthatthe Supreme Courtwrote withapproval of the AMGRealty case andintimatedthat it
expectsaTwp. to meetitsotherobligationstothisvulnerable classof low- andmoderate-income
households. In AMG Realty,supra,207 N.J.Super.at 424, the trial judge wrote:
Nothingthathas beensaidhere concerningexclusionof afinancial componentshould
countenance amunicipality'sfailuretoundertake anaggressiveprogramof pursuingany
available rentsupplementprogramswhichmaybe availabletoassistthose whoare infinancial
need.
It istherefore submittedthatthe State case law language in AMG Realty isconsistentwiththe
more rigorousfederal HUDConsolidatedPlanregulations whichrequire aCDBG-recipientTwp.tonot
“fail”(language of “omission”)—inthe wordsof AMGRealty--to“undertake[] aggressive program[s]”
which“may be available toassistthose whoare infinancial need.”
It issubmittedthat,underthe trial court’sabove omissionlanguagein AMGReality, itwouldbe
disingenuousand inequitable forthe Twp.of Bloomfield toallege thatits547 “presentneed”fairshare
obligationislimitedtoa“RehabilitationShare” strategy—i.e.,use of onlyarehabilitationprogram,as
distinguishedfromproviding newconstruction affordable rental housingforlow andmoderate income
16. 16
householdswhopresentlyreside in “deficient”overcrowdedrentalhousing-- inthe lightof the Twp’s
consciousdecisionorculpable neglectin: (1) failingtoenforce itsinclusionaryzoningordinance,Chap.
112, to create one affordable unitforeveryfourmarket-rate unitsinpastand pendingresidential
developments;(2) building-out(exhausting) all of itsvacantlandfor luxuryrental housingdevelopment
therebyeliminatingthe opportunityinthe future toconstructaffordable rental housinginthe future;10
(3) withthe physical impossibilityof relocating—through“checkerboard,”orphaseddevelopment--547
“presentneed”overcrowdedrental householdsresidingin“deficient”multifamilydwellings; and,(4)
relyingsolelyonits federallyunderfunded Section8HCV program to meetitsHUD ConPlanobligations
to lowand moderate income renterhouseholds.
For equitable reasons,itissubmittedthatthe Twp’s Mt.Laurel obligationmustbe broadly
interpretedtoincludeprotectinglowandmoderate income “presentneed”households. The contextof
the Supreme Court’sfavorable reference tothe AMG Realty language cannotbe narrowlyinterpretedto
be limitedtothe Twp.applyingformore Section8 HCV Program fundswhenitknowsverywell thatthe
Congressional appropriationswill notbe forthcominginface of ahistoryof massive budgetcutsto that
program.11
In addition,failuretoadopta rentcontrol ordinance wouldviolate HUD’shigherConPlan
regulatorystandardsandwouldconstitute aregulatory“omission” toprotectthe “presentneed”Mt.
Laurel classof lowand moderate income beneficiaryhouseholds livingin“deficient”housing until a
multi-yearnew construction/rehabilitationremedial planiscompleted. A rentcontrol ordinance islikely
neededformanyyearsto come to protect thisprotected Mt. Laurel classgiventhe Twp’s 2008
admissionthatthe Twp.is“built-out”;i.e.,lackinginvacantland forresidential.
In myMarch 26, 2015 PublicPolicyMemorandumtothe Twp., p.35, I wrote that since the Twp.
submitted toNJCOAHits 2008 HousingElementandFairShare Planand2008 inclusionaryzoning
ordinance (requiring “aset-aside forprojectsthatgenerate five [5] ormore residentialunitsof one [1]
affordable housingunitforeveryfour[4] marketrate units”),itappearedthatnone of the luxuryrental
developmentsthathave beencompleted,andnone currentlyunderdevelopment,have anyinclusionary
zoningaffordable-rental-unitsetasidesintheirdesigns. Atpage 35 of my Memorandum, Ilistedseveral
of these luxurydevelopmentincluded: 44 ParkStreet,Avalon,HartzMountain,Block243
RedevelopmentPlan(“AnnieSez”),andOakesPond. OnJuly29, 2015, I sentan OpenPublicRecordsAct
requestaskingthatthe Twp.provide the exacttotal unitsineach project underdevelopment—aswell
as those notcitedin myPolicyMemorandum—aswell as the bedroomdistributions foreach of these
projects.
The Twp’s respondedtothisrequestonAugust21,2015 with174 pagesof Twp. Planningand
ZoningBoard projectsite approvals withthisdata.12
See APPENDIXC, here fora site-by-site summaryof
10 See footnote 24, here, on Twp’s 2008 admission in its 2008 HousingElement submission to COAH of the “ build-
out nature of Bloomfield (96% developed), [and that] the Township’s overall land usepattern has remained
substantially unchanged duringthe past10 years,and only moderate future growth is expected to occur. … .”
11 See footnote 17, here, for the limited Congressional commitment to fundingthe Section 8 HCV Program.
12 The Twp’s August 21,2015 OPRAct response to me states: “The followingrecords arebeing provided in their
entirety and are the ONLY documents in the Township’s possession responsiveto your request: [1]. Resolutions
from the Township’s PlanningBoard for 110 Washington Street, 252-303.[ 2]. 262 Liberty Street-56 Broad Street,
17. 17
those distributions. Note inthe “remarks”portionof thatgrid the discussionof the school funding
issuesrelatedtoeachluxurydevelopment,andthe factthat “OakesPond”appearsto be the only
residentialdevelopmentwhere possiblefundingfromtax contributionstothe BOE forthe additional
studentswasrecommendedbythe Twp.PlanningBoardtobe exploredbythe Twp.Council.13
Thisand otherdata obtainedfromthe Twp.throughotherOPRActrequestsin2015 confirms
that, as of the date of St. Hilaire’sOPRActrequest, thatthe Twp. had completed,orhasunder
development,the followingunits:
Total units 1-bedroomunits Studios 2-bedroomunits
Rental units 1,438 627 120 693
Ownershipunits 12 0 0 12
Grant total rental
& ownershipunits
1,45014
627 120 705
Aside fromthe 82-unitHeritage Villageseniorcitizens’project(74,1-BR units& 8, 2-BR units)
and the 12-unithomeownershipprojectat92-102 Willow St., none of these residential developments
have Twp-enforcedprovisionsforaffordable housing setasides underthe Twp’sinclusionaryzoning
ordinance whichcallsfora ratio of 1 affordable unitforevery4market-rate unitsdeveloped. This
92-102 WillowStreet, 390 Franklin Street, 221-225 BellevilleAvenue, 5 Lawrence Street, 192-200 Bloomfield
Avenue, ParkingDeck in Block 228 and 44-58 Park Street, all in responseto Item No. 1.0 of your request, … of your
request (174 pages).” (The Twp. Department of Community Development on December 7, 2015 sent me an email
responsethat stated that the 177 Franklin St.project (the old South Junior High School) was slated for the
development of 104 apartments.)
This responsewas to my July 29, 2015 OPRAct request: “Provide me with the number of units--broken down by
rental units and ownership units-- for each of the followingresidential development project sites,and indicatethe
bedroom distribution for each project(i.e., the number of 1, 2, 3, 4, etc. bedrooms) for rental and homeownership
units: 44 Park Street, Avalon Bloomfield Station on Glenwood Ave.; Hartz Mountain Redevelopment area (16.5
acres);Block 243 Redevelopment Plan (“Annie Sez”);…; Oakes Pond Redevelopment area; Fairways atBrookdale
(“Liongate”); 177 Franklin Street redevelopment area;and 110 WilliamSt. redevelopment area.” (Liongate was
not utilized for housing;instead,the site is beingused for other non-housingpurposes.)
13 It is not clear whataction the Twp. Council took on this PlanningBoard suggestion.
14This total excludes the 361-unitPrismproject(the old “Westinghouse” plant), the housingcomponent of which is
really physically located in EastOrangebut has a Bloomfield address for “marketing” purpos es. This 1,450 unit
total does includethe 114-unitproject at177 Franklin St. that is under development (site of old South Junior High
School). On July 13,2015, I had sent to the Twp. a request that it table a resolution on the redevelopment plan for
the rehabilitation of this former school for residential development and to amend the ordinanceto includein the
study consideration of the Twp’s ordinancefor the provision of affordablehousingunder the Twp’s Chapter 112
ordinancewhich callsfor a 1:4 ratio of one unitof such housingfor every four market-rate units. The Council
declined my recommendation.
18. 18
means that 1,368 other unitshave no affordable housingset-asides.15
Twenty-percent(20%) of this
latter amount—274 affordable units16
—were notdevelopedunderthe Twp’szoning ordinance,
Chapter 112, and could have beenaffordable housingresourcesfor current low and moderate income
householdslivingin“deficient” housing,classifiedas“presentneed” households.
But for the Twp’s omissioninfailingtoenforce itsordinance,asubstantial numberof low and
moderate income householdscurrentlyresidinginBloomfieldinthe categoryof “presentneed”
householdslivinginthe Twp.in“deficient”housing—i.e.,overcrowded,lackingplumbingor kitchen
facilities—havemissedthe opportunityforaffordable,safe andsanitaryhousing.
The devastatingeffectof thisisthatalthoughthe Twp.has until 2025 to meetDr. Kinsey’s547-
unit“presentneed”fairshare obligationunderthe constitutionalrequirementsof the N.J.Supreme
Court’sMt. Laurel case law;however,because the Twp.hasused-uppracticallyall of the availablespace
inthe Twp.to build luxury rental housing, the Twp.islackingvacantcurrenthousingdevelopmentsites
for future affordablehousingtomeetits“presentneed”Mt.Laurel obligation:an awful omission.
Recall,these householdswouldnotburdenthe school districtwithadditional studentsbecause
these “presentneed”households alreadyliveinthe Twp.andtheirchildrenare alreadyin District
schools.
It appearsthat onlyone residential development—OakesPond—hascommitteditself tohelp
financiallywiththe costof schoolinginthe BOE district. Itdoesnot appearthat any otherof the
housingdevelopershave beencalledupon—orvolunteered—toprovideassistancetothe BOE fortheir
privilegetogentrifythe Twp. See my“remarks”onBOE issueson the gridIn APPENDIX C which
summarizesthe Twp.PlanningBoardorZoningBoardresidential developments providedbythe Twp.in
itsAugust21, 2015 OPRActresponse. Itisnot clearwhythe PlanningBoardandTwp.Council have not
appliedthe same school costreimbursementconcepttoall of the otherdevelopmentsotherthanOakes
Pond.
The Twp. statesthat the 82-unitHeritage Village,acrossfromTownHall,isan affordable
housingresource fordisabledandelderlypersonthatisavailable tolow andmoderate income
householdswhomayfall intothe housing“deficiency”category—noplumbing,kitchenfacilitiesor
overcrowd. However,that project is oflimitedusefulnesstothis“presentneed” protectedclass
because: (1) the projectisforlimitedbeneficiariesdue tothe factthat all of the unitsare one-
bedrooms,exceptforfour(4) two-bedroomunits;(2) thisresource isnotconducive forfamiliesinthe
“presentneed”housing“deficiency”category;and,(3) there isno indicationthathouseholdsinthis
“presentneed”categoryare receivingatenantselection“preference”bythe developerforadmissionto
thisproject,a fact that can onlybe ascertainedafterall 82 unitsare occupied.
15Ironically,these higher income renter households areprotected from rent control for 30 years while the Twp’s
low and moderate income rented households,especially thosewho are “cost-burdened,” remain vulnerable. See
N.J.S.A. 2A:42-84.2, L.1987, c.153,s.2 & s.3; amended 1999,c.291, s.1. N.J.S.A. 2A:42-84.2.
16 1,450 minus 94 units = 1,368; times 20% = 274 of affordableunits which should havebeen set asideunder the
Twp’s inclusionary zoningordinance,Chap.112. This could have gone to meet the Twp’s “present need” Mt.
Laurel fair shareobligation,however established,either by Dr. Kinsey or by Econsult.
19. 19
The existence of astrongrent control ordinance withminimumdwellingunitexemptionsand
withno provisionforvacancydecontrol wouldmitigate the problemof relocationuntil suchtime that
the Twp. expeditiouslyconstructsaffordable unitstomeetthe Mt. Laurel “presentneed”obligation
through2025. Althoughrentcontrol isnot a “housingprogram,”the failure tothe Twp.to provide
affordable housingisacomponenttothe “police power”requirementthatthere be a“sufficientlocal
need”foran ordinance. Failure tomeetthisobligationaggravates“local need.” Thisisparticularly
importantinthe face of the fact that the Bloomfield’sHousingAuthority(PHA) hasonly270 HUD-issued
vouchersof Section8 Tenant-BasedProgramthatare alreadydistributedtoincome-vulnerable tenants;
and the PHA hasover430 householdsonitswaitinglistwhichhasbeen“frozen”withnoother
householdsbeing able togetonthat waitinglist. The paltryincrease Congress’sFY16HUD
appropriationsforthisfederal program,signedbythe presidentonDecember 18, 2015, is unlikelyto
make much of difference in increased voucherfundingforthe BloomfieldPHA to meetitswaitinglist
demand.17
Bloomfield’spossible “gap period” affordable housingobligation
It iswithinthe realmof possibilitythatthe Twp.of BloomfieldhasaMt. Laurel fairshare
obligationthatisbeyondwhatever“presentneed” obligationthatEssex CountySuperiorCourtdecides
as a resultof the N.J.Supreme Court’sMarch10, 2015 decisionin Inre Adoptionof N.J.A.C.5:96 & 5:97
by N.J.Council onAffordableHousing,__N.J.__ (2015)(M-392-14).
That Court declaredthatCOAHhad abdicateditsconstitutionalobligationtoimplementthe Mt.
Laurel legislationleadingthe Courttoassigntoeverycountyjudicial vicinageatrial judge whowould
entertainmunicipal motionsfordeclaratoryjudgmentstodetermine municipalaffordable fairshare
obligations. Those trial courtsare to establish“prospective”and“presentneed”obligations,if they
exist. Thensomethingnewoccurredwhenatrial judge inOceanCounty,Hon.Mark A.Troncone, J.S.C.,
commissionedaspecial master(RichardB.Reading) toassisthimwiththe fulfillmentof hisjudicial
obligationsunderthe Supreme Courtdecision. Mr. Readingreviewedfairshare planningdata thatthe
Fair Share HousingCenter(FSHC) submittedtothe Court, includingdocumentation fromDr.David
Kinsey.18
17 See footnote 33 of my March 26, 2015 Public Policy Memorandum for federal budget problems in FY15. The
federal FY16 Omnibus Spending Act was passed by the Congress and signed by the president on December 18,
2015. The HUD appropriations by programappears in the National Low Income HousingCoalition budgetchart, as
of December 18, 2015, at: http://nlihc.org/sites/default/files/FY16HUD-USDA_Budget-Chart.pdf . There was a
negligiblefundingincreasein HUD’s Tenant-Based Rental Program (Section 8 Vouchers) for contractrenewal set-
asides from$17.486 billion in FY15 to $17.681 billion in thecurrent FY16 budget. Itis doubtful that the Twp. PHA
will receiveanythingbut a negligibleincrease—if any--beyond the present contractauthority subsidy for its
current 270 Sec. 8 voucher units.
18 See Dr. D. Kinsey’s March 24, 2016 analysisthatwas the FSHC’s submission in the Ocean Co. context that
included a discussion of “present need” atpp. 13-20,especially pp.19-20 that discusses theSpecial Master
Reading’s report to Judge Troncone. (Note that Reading has been commissioned by Judge Carey, Essex Co. in the
pending cases involvingW.Caldwell,Maplewood and Fairfield):
https://www.dropbox.com/sh/pfcj1ccrrtzld3p/AAB3iPYE7hf8DrWLnYrE5V2za/4-6-16%20-%20Barnegat-
%20Appeal%20-in%20support%20of%20amicus%20mtns-%20%20Omnibus%20Appendix%20-final%20s.pdf?dl=0
20. 20
The FSHC statesthat thisrulingcouldleadtothe constructionof thousandsof new homesfor
NewJerseyfamilies. Judge Troncone,inadecision inthe contextof OceanCounty,19
datedFebruary18,
2016, Dkt.No. OCN-L--2640-15, rejectedargumentsbythe New JerseyState League of Municipalities
and several individual municipalitiesthattheyshouldbe able toignore the housingneedsof working
families,people withdisabilities,andlow-income seniorsthatarose overthe past15 years.
(Municipalities,includingthe N.J.League of Municipalities, filedaninterlocutoryappeal inlate March,
earlyApril 2016, to Judge Troncone’sFebruary18,2016 order in thisOceanCountycase to the
Appellate Divisionwhere the “gap”obligationissue ispendingdecision.)
FSHC statesthat the OceanCounty decision, whichmayhave far-reachingeffectsbeyondOcean
County,will helpensure thattensof thousandsadditional New Jerseyansgetaccesstonew housing
opportunities.Itwill alsosubstantially increase municipalfairhousingobligationsbeyondthe
unrealisticallylownumbersproposedbyaconsortium (throughitsstudybyEconsult) of over200
municipalities.Judge Troncone rejectedthe central conclusionof areportsubmittedonbehalf of more
than 200 townsthat was designedtoexclude workingfamilies,seniorsandthose withdisabilitiesfrom
permanenthomes.Itarguedthattownsshouldnothave to provide fairhousingopportunitiesfora 15-
yearperiodthat beganin1999, whenthe state’sfairhousinglawswere influx.
The rulingreliedonthe analysisof courtspecial masterRichardB. Reading,whohasbeen
appointednotonlyinOceanCountybutalsoin Essex County,byJudge Carey,toadvise the courtas to
fairshare obligations. Reading,inareportto Judge Troncone, recommendedthatthe courtinclude
housingneedsfrom1999 to 2015 as part of municipal fairshare obligations.Similarreportshave already
beenrequestedfromReadingbyJudge Carey. InhisMarch 24, 2016 schedulingorderinMt. Laurel
casesinvolvingthe Essex Countymunicipalitiesof WestCaldwell,Maplewoodand Fairfield, Judge Carey
orderedthatMr. Readingevaluate whatthe “gapperiod” fairshare obligationforall of the other
municipalitiesinEssex County, presumablyincludingthe Twp.of Bloomfield.
So,that pendingcase—whichBloomfieldisnota party to—will conceivably bearonthe Twp.of
Bloomfield’s ”presentneed”and“gapperiod”fairshare affordable housingobligation underthe N.J.
Fair HousingActand the N.J.Supreme Court’sMarch 2015 Mt. Laurel decision. Bloomfieldhasmade a
19 See opinion at: http://fairsharehousing.org/images/uploads/160218_Troncone_Opinion.pdf
Judge Troncone’s Order states, in part: “ Based upon the findings of this opinion, the Special Regional Master
[Mr. Richard B.Reading] is hereby “ORDERED to prepare his final reportso as to:
“1. Include,as a separateand discretecomponent, the affordablehousingneed which aroseduringthe “gap
period” encompassingthe period from the end of the second round housingcyclein 1999 to the present into his
methodology in determining the statewide and regional housingneed and the allocation of thatneed to the
constituent Ocean County municipalities.
“2. Apply FHA’s 1000 unit cap provision as directed by this opinion. A municipality’s presentand prospective need
for the third round housingcycletogether with the gap period need shall all besubjectto the cap. A municipality’s
present and prospectiveneed shall beaccounted for firstand then the gap period need is to be added. … .”
[Emphasis mine.]
Mr. Reading’s report, “Bridging the Gap: 1999-2015 ‘Gap Period’Affordable HousingNeeds” (Feb. 17, 2016),that
Judge Tronone accepted on methodology for the “gap period” is found at:
http://files.ctctcdn.com/b3ea0b6a001/5ad8ffd4-0138-4054-bf33-fc8106523fea.pdf .
21. 21
decisionnottofile adeclaratoryjudgmentactioninthe Essex Countyvicinage toseekclarificationonits
fairshare obligationand itisapparentlywillingtoacceptthe judicial findingof obligation—without
participating--inthe upcomingtrial of these three Essex Countymunicipalities.
PARTIII.C. update of March26, 2015 Policy Memorandum (pp. 21-23) onTwp.
obligationtocomply withthe federal Fair Housing Act of 1968 toavoid
“disparate impact “ on families inits implementationof municipal residential
zoning powers.
The Supreme Courtof the UnitedStatesissuedanopiniononJune 25,2015 in TexasDepart.of
CommunityAffairs,___ U.S. ___ (No.13-1317)20
thatinterpretedthe federal FairHousingAct,42, U.S.C.
§§3601-3619 et seq.,to permithousingdiscriminationactionswherethere isa“disparate impact”on
certaincivil rights protectedclassesunderthatstatute. The case dealswithissuesof race;however,the
Fair HousingActalsoincludes“familial status”asamongthe protectedclassesregardlessof the race of
the householdsaffected. Althoughthe legal issuesare complex andnoattemptwill be made here to
explore the full applicationof the Court’sholdingtothe Bloomfieldcontext forthe provisionof
affordable housingforfamilies,itisclearthat the Fair HousingActappliestothe denial of housing
opportunitiesforprotectedclassestoincludeincome-vulnerablefamilies,regardlessof theirrace.
The Court indicatedthatsuitstargetingunlawful zoninglawsandotherhousingrestrictionsthat
unfairlyexclude minoritiesfromcertainneighborhoodswithoutsufficientjustification are atthe heartof
disparate-impactliability.See,e.g., Huntingtonv.HuntingtonBranch,NAACP,488 U. S. 15, 16–18. It
ruledthatrecognitionof disparate-impactliabilityunderthe federal FairHousingAct playsanimportant
role inuncoveringdiscriminatoryintent:itpermitsplaintiffstocounteractunconscious prejudicesand
disguised animus thatescape easyclassificationasdisparate treatment. Clearly,municipalitiesmay
provide allegedly“neutral”reasonsfortheiractions;however plaintiffs are notrequiredtoprove
discriminatoryintenttoprevail inthese zoningcases.
In the Bloomfieldcontext,itistroublesome thatthe Twp.hasconsistentlyfailedtoapplyits
inclusionaryzoningordinance,Chapter112 of the Municipal Code,toitsdevelopmentandfacilitationof
hundredsof unitsof luxuryhousing. Thatordinance callsforthe developmentof one affordable housing
unitfor everyfourmarket-rate unitsdeveloped. CurrentBloomfieldresidentincome-vulnerable
householdswhoare inthe categoryof beneficiariesof the Twp’s Mt. Laurel “presentneed”fairshare
obligation—i.e.,547 lowandmoderate income households,21
manyof whomare familiesresidingin
“deficient”housing—have beendeniedthe opportunitytoparticipate in residingin the over700 two-
20 See also,articleby Adam Liptak in the New York Times, “Justices Take Broad View Of Bias Suits In Housing,”
June 26, 2015. See also, Morgan Williams, “Symposium:An endorsement of forty years of effective fair housing
enforcement,” SCOTUSblog (Jun. 25, 2015,8:38 PM), http://www.scotusblog.com/2015/06/symposium-an-
endorsement-of-forty-years-of-effective-fair-housing-enforcement/ .
21 See footnote 6, here, on The New Jersey League of Municipalities commissioned Econsult,Philadelphia,Pa.,to
critiqueof Dr. Kinsey’s study. The Twp. is a member of the League, but the Twp. has been silenton its position on
Dr. Kinsey’s estimate.
22. 22
bedroomunitsdevelopedasluxuryhousing,none of whichprovidearealisticaffordable housing
opportunityfor“costburdened”renterhouseholdsinthe “familialstatus”protectedclassunderthe
federal FairHousingActof 1968.
No attempthere ismade to evaluate the full meritsof sucha “disparate impact”discrimination
claim. However,there isacolorable basisforthe Twp.to examine the implicationsof itsactionsin
failingtoaddressthe affordable housingneedsof this Mt.Laurel “presentneed”classof familylowand
moderate income householdswho presentlyreside indeficienthousinginourtown.
The U.S. Supreme Court’sdecisioninthe above case wasprecededbythe U.S.Departmentof
HousingandUrban Development’s(HUD) promulgationof its“disparate impact”enforcement
regulations,24C.F.RPart 100, whichdefined“disparate impact”andsetforththe procedure for
assessingthe meritsof aclaimfor discrimination. (See APPENDIXE fora relevantportionof the
regulation,24C.F.R.§100.500.)22
HUD’s comments, 78 Fed.Reg. at11468, to its final regulationsare
instructive onthe Twp’somissionsinnotenforcingitsinclusionaryzoningordinance;anditsfailure to
enacta strongrent control ordinance,thathasa novacancy decontrol provision andfailstominimize
the numberof dwellingunitscovered:
HUD agreeswiththe … commenterthatthe [U.S. FairHousing] Actis bestinterpretedas
prohibitingactionsthatpredictablyresultinanunjustifieddiscriminatoryeffect.HUD’s
interpretationissupportedbythe plainlanguage of the FairHousingAct,whichdefines
‘‘aggrievedperson’’asanypersonwho‘‘believesthatsuchpersonwill be injuredbya
discriminatoryhousingpractice thatisaboutto occur,’’and whichspecificallyauthorizesHUDto
take enforcementactionand [AdministrativeLaw Judges] ALJsandcourtsto orderrelief with
respectto discriminationthat‘‘isabouttooccur.’’Moreover,courtsinterpretingthe Fair
HousingAct have agreedthat predictable discriminatoryeffectsmayviolatethe Act. [Footnotes
omitted.][Emphasismine.]
My March 26, 2015 PublicPolicyMemorandumdocuments23
--throughvariousfactual sources
(includingdatainthe Twp’sown2010 FairHousingPlanand 2014 ConsolidatedPlan/Annual Plan)--the
adverse disparate impactthatthe Twp’sinclusionaryzoningomissionsandrentcontrol omissions
22 See HUD’s comments to its final regulationsin 78 Fed.Reg. at 11460, et seq. (Feb. 15, 2013).
http://portal.hud.gov/hudportal/documents/huddoc?id=discriminatoryeffectrule.pdf
23 See, for instance,PARTS I and II,pp. 4-15, of that Memorandum and Appendix C of this Supplemental
Memorandum on the Twp’s failureto include affordabletwo-bedroom and higher dwellingunits in the 1,368
luxury units that have no affordablehousingset-asides,notwithstandingtheTwp’s inclusionary zoningordinance’s
call for a ratio of 1:4 of affordableunits to market-rate units. The Twp. admits in its 2010 Fair HousingPlan and
2014 ConPlan that 51% of rental households are“cost-burdened.” The Twp. wrote: “[T]he Township of Bloomfield
has many residents who experience a cost burden, most likely dueto the high cost of livingin this area.
Approximately one-third of the Township’s residents pay 30 percent or more of their income on housingcosts.
Based on this statistic,more affordablehousingis needed in Bloomfield and throughout the County. With the cost
of housingincreasingeach year,Essex County risks losingresidents to more affordableareas.… . Of households in
Bloomfield that spent 30 percent or more of their household income on housing,58.1 percent of all owners with
mortgages, 34.2 percent of all owners without mortgages, and 51.1 percent of all renters accordingto 2006-2008
estimates. These percentages represent an increaseof 25.4 percent, 24.1 percent and 33.7 percent respectively
from 2005-2007 estimates.” [Twp’s 2014 Consolidated Plan,p.16, submitted to HUD.][Emphasis mine.]
23. 23
presentlyhave,andpredictablyhave,ondiminishingaffordable housingopportunitiesforthe protected
“familial statusclass”of income-vulnerable householdsinthe Twp.24
It isimportantto note that the
federal FairHousingActwasamendedtoinclude the “familial status”protectedclasstothe classes
foundinthe original Act; i.e., race,national origin,etc. The commentsto the final HUD regulations,78
Fed.Reg.at11469, are clearin statingthatthe “familial status”classmustbe readintoHUD’s and the
case law’sconcernforestablishing trulyintegratedandbalancedlivingpatterns:
Recognizingliabilityforactionsthatimpermissiblycreate,increase,reinforce,orperpetuate
segregatedhousingpatternsdirectlyaddressesthe purpose of the [federal FairHousing] Actto
replace segregatedneighborhoodswith‘‘trulyintegratedandbalancedlivingpatterns.’’25
PARTIII.B. update of March 26, 2015 Policy Memorandum(pp. 15-20) the federal
Housing and Community Development Act of 1974 andregulations that relate to
the Twp’s obligationtohave appropriate strategies for the removal of
affordability impediments (barrierstoaffordability).
Subsequentto mysubmittingthe PublicPolicyMemorandumtothe Twp.on March 26, 2015,
HUD promulgatedregulations,called“AffirmativelyFurtheringFairHousing (AFFH),”onJuly16, 2015 at
80 Fed. Reg.42271-42371, 24 CFR §§5.150-5.168,26
whichstrengthenedthe fairhousingcomponentsof
the CommunityPlanningandDevelopmentregulations--24CFR§§91.200 to 91.253 and §§570.302,
570.303, 570.495 & 570.496--that I citedat pp.15-20 (andAppendix2, there) of thatMemorandum
concerningthe obligationof municipalitieslikeBloomfield initsfuture 5-yearConPlansandOne Year
ActionPlanstoaddress the removal AffordabilityImpediments(AI) and barrierstoaffordabilityfor
24 The Twp’s 2008 HousingElement & Fair SharePlan to COAH, p. 17,states that “[d]ue to the build-outnature of
Bloomfield (96% developed), the Township’s overall land usepattern has remained substantially unchanged during
the past10 years,and only moderate future growth is expected to occur. The majority of future growth and
development in the Township will begenerated by redevelopment activity in the Bloomfield Station
redevelopment area, and Township-wide as the entire Township was declared as an Area in need of Rehabilitation
pursuantto the [NJ] Local Housingand Redevelopment Law in 2002.” [Emphasis mine.]
25 As to the issueof the Twp’s inclusionary zoningordinancethatwas not enforced to provide a 1:4 ratio set-aside
of affordableunits to market rate units,HUD’s comments, 78 Fed.Reg. at 11478,are perhaps instructional that
“familial status”disparateimpacteffects can occur where housingis rendered “unavailablebecauseof [this]
protected characteristic”:
Because the illustrated conductmay violatethe Act under either an intent theory, an effects theory, or
both, HUD also finds itappropriateto replace‘‘in a manner that has a disparateimpactor has the effect
of creating, perpetuating, or increasingsegregated housingpatterns’’ becauseof a protected
characteristic with ‘‘otherwise make unavailableor deny dwellings becauseof’’ a protected characteristic.
As discussed in the ‘‘Validity of Discriminatory Effects Liability under the Act’’ section above, the phrase
‘‘otherwise make unavailableor deny’’ encompasses discriminatory effects liability.[Emphasis mine.]
26 See new regulations at www.hud.gov/AFFH .
24. 24
income-vulnerable households incertain civil rightsprotectclasses,toinclude racial and“familial
status” classifications.
Althoughthe newAFFHregulations(summarizedbelow) donottechnicallytake effectforfive
years,twothingsare important relative tothe needtoenact,now,astrong rentcontrol ordinance and
enforce itsinclusionaryzoningordinance,Chap.112: (1) HUD’s currentCDBG and fairhousing
regulations are still ineffect thatgovernthe Twp’sobligationto analyze and remove affordability
impedimentsandbarrierstoaffordabilityforincome-vulnerablerenterhouseholdsandhouseholdsin
the “familiarstatus”protectedclass underfairhousingstatutes;27
and(2) if the Twp.in the future isto
submitan adequate AFHandConPlantoHUD, itwill needtoshow that ithad beenimplementinga
strategy, all along, thatwas consistentwith protectingthese vulnerablegroups if itisto avoidfair
housingculpability andsanctionsatthattime. It wouldbe disingenuousfive yearsfromnow forthe
Twp.to representtoHUD that it justrecognizedthe needsof these at-riskpopulations—whenall of the
available landforhousingdevelopmentislost--whichare clearlyidentifiedinthe Twp’s2010 Fair
HousingPlan, 2014 ConPlanandAnnual Plan.
That said,I nowturn to a brief summaryof HUD’s new AFFH regulationsthatwere finalizedafter
I submittedthe PublicPolicyMemorandumtothe Mayorand Council onMarch 26, 2015. Then,I will
restate the view,expressed inthatMemorandum, thatHUD’s currentCDBG and fairhousingregulations
governthe Twp’s needtoenact a strong rentcontrol ordinance andenforcingitsinclusionaryzoning
ordinance toprovide affordablerental housingset-asides.
On July8, 2015, HUD announceditsfinal regulationstofurtherfairhousing.28
The pressrelease
statedinpart:
The U.S. Departmentof HousingandUrban Development(HUD) announcedafinal rule todayto
equipcommunitiesthatreceiveHUDfundingwithdataand toolsto helpthemmeetlong-
standingfairhousingobligationsintheiruse of HUDfunds.HUD will alsoprovide additional
guidance andtechnical assistance tofacilitatelocal decision-makingonfairhousingpriorities
and goalsfor affordable housingandcommunitydevelopment.
For more than fortyyears,HUD fundingrecipientshave beenobligatedbylaw toreduce barriers
to fairhousing,soeveryone canaccessaffordable,qualityhousing.Establishedinthe Fair
HousingAct of 1968, the lawdirectsHUD and itsprogram participantstopromote fairhousing
and equal opportunity.Thisobligationwasintendedtoensure thateverypersoninAmericahas
27 HUD has prepared instructional guided for jurisdictionssuch as Bloomfield on whatis expected of them under
CDBG regulations thatpreceded the August 17, 2015 effective date of the new AFFH regulations: HUD AFFH
webpage, http://1.usa.gov/VFQbbE; HUD’s Fair Housing Planning Guide, Vol. 1 (#HUD1582B-FHEO),
www.hud.gov/offices/fheo/images/ fhpg.pdf . In addition,for a good summary of the HUD regulations thatgovern
the Twp’s CDBG Affordability Impediment’s obligation atthe current time, see Appendix AA, here, which is an
extract from an articleby Ed Gramlich from the National Coalition for Low Income Housingentitled “Affirmatively
Furthering Fair Housing”(2015),written after publication of HUD’s proposed regulation,but prior to HUD’s
issuanceof the final AFFH regulations on July 16,2015.
28 See also,articleon this new regulation by Binyamin Appelbaum in N.Y. Times, “Helping Families Move Far From
Public Housing,”July 8, 2015,pp. 1 & B6: “Housing vouchers,likeschool vouchers,are sometimes criticized for
helpinga few whileleavingmany behind. ‘A child’s courseof lifeshould notbe determined by the ZIP code she’s
born in,’President Obama declared lastyear.”
25. 25
the right to fairhousing,regardlessof theirrace,color,national origin,religion,sex,disabilityor
familial status.The final rule aimstoprovide all HUDprogramparticipantswithclearguidelines
and data theycan use to achieve those goals. [Emphasismine.]
At itswebsite,HUDdescribedthe purposesof thisnew AFFHplanningregulation:
HUD’s rule clarifiesandsimplifiesexistingfairhousingobligationsforHUD granteestoanalyze
theirfairhousinglandscape andsetlocally-determinedfairhousingprioritiesandgoalsthrough
an Assessmentof FairHousing(AFH).Toaidcommunitiesinthiswork,HUD will provideopen
data to granteesandthe publiconpatternsof integrationandsegregation,raciallyand
ethnicallyconcentratedareasof poverty,disproportionatehousingneeds,and disparitiesin
access to opportunity.ThisimprovedapproachprovidesabettermechanismforHUDgrantees
to buildfairhousinggoalsintotheirexistingcommunitydevelopmentandhousingplanning
processes.Inadditiontoprovidingdataandmaps,HUD will alsoprovide technical assistance to
aidgranteesas theyadoptthisapproach. [Emphasismine.]
HUD commentedonthe AFFHon the applicabilityof fairhousingassessment of amunicipality’s
zoningordinances,80Fed.Reg.at 42310:
[T]he purpose of thisassessmentistoenable HUD programparticipantstobetterfulfilltheir
existinglegalobligationtoaffirmativelyfurtherfairhousing,inaccordance withthe FairHousing
Act and othercivil rightslaws.
It isimportantto note…that,while zoningandlanduse are generallylocal mattersasstatedby
the commenters,whenlocal zoningorlanduse practicesviolate the FairHousingActorother
Federal civil rightslawssuchastitle VIof the Civil RightsAct,section504 of the Rehabilitation
Act, or the AmericanswithDisabilitiesAct,theybecome aFederal concern,aswithanyviolation
of Federal lawthatoccurs at a local level.See,e.g., U.S.v.Cityof Black Jack,Missouri,508 F.2d
1179, 1187-1188 (8th Cir.1974), cert. denied,422 U.S. 1042 (1975); U.S. v. YonkersBoard of
Education,etal.,837 F.2d 1181 (2d.Cir. 1987), cert.denied,486 U.S. 1055 (1988).
Inclusionof zoningandlanduse isnot intendedtoassume these issueswillhave such
implicationsformostor manyprogram participants.However,includingzoningandlanduse for
considerationisneededtogainanaccurate overall picture of local housingandneighborhood
issues,suchasthe availabilityof affordable rentalhousinginadiverse setof communities.
The newregulationsrequirethateachConPlanprogramparticipantandeach PHA participating
witha local governmentindevelopinganAFHsubmitanAFH at leastonce everyfive years.PHAs
undertakingtheirownAFHwould be requiredtohave annual updates. Unlike the AI,the AFHwouldbe
submittedtoHUD for reviewandapproval.HUDcould decide nottoaccept an AFH,or a portionof one,
if it isinconsistentwithcivil rightslawsorif the assessmentissubstantiallyincomplete.29
Forexample:
29 HUD’s final AFFH regulation,24 CFR §5.126 (“Review of AFH”), contains certain reviewstandards of
municipalities such as Bloomfield:
“(b) Nonacceptance of an AFH. (1) HUD will not acceptan AFH if HUD finds that the AFH or a portion of
the AFH is inconsistentwith fair housingor civil rights requirements or is substantially incomplete.In
connection with a regional or jointAFH, HUD’s determination to not accept the AFH with respect to one
26. 26
• If the AFHwas developedwithoutcommunityparticipationorconsultation.
• If the AFHfailsto satisfythe requiredelementsof the regulation,suchasprioritiesthatare materially
inconsistentwithdataandotherevidence.Inorderfora ConPlanorPHA Planto be approved,and
therefore aprogramparticipantto receive funds,anapprovedAFHwouldbe necessary.
The ConPlan’s“StrategicPlan”(five-yearplan) wouldhave todescribe how ajurisdiction’s
prioritiesandspecificobjectiveswill affirmativelyfurtherfairhousingbyhavingstrategiesandactions
consistentwiththe goalsandotherelementsof the AFH.The ConPlan’sAnnual ActionPlanwouldhave
to describe the actionsajurisdictionplanstocarryout inthe upcomingyeartoaddressfairhousing
issuesidentifiedinthe AFH.The rule refinesthe currentdefinition of “certifying”thata jurisdictionwill
“affirmativelyfurtherfairhousing”bystating in24 CFR §1.561(e) that each program participant ”must
certifythatit will take meaningful actionstofurtherthe goalsidentifiedinitsAFHconductedin
accordance withthe requirementsin§§5.150 through5.180 and24 CFR91.225(a)(1), 91.325(a)(1),
91.425(a)(1), 570.487(b)(1), 570.601, 903.7(o), and 903.15(d), as applicable.”
Although,technically--because BloomfieldjustsubmittedaConPlanandOne-YearAnnual Plan
in2015--the new AFH regulations donotrequire the Townshipto submitanAFHwitha ConPlanfor
quite some time intothe future. However,these newregulations require jurisdictionssuchas
Bloomfieldtofollow the currentCDBGConsolidatedPlan/Annual Plan obligations"asrequiredof the
program participantbyone or more of the HUD programs [suchas the CDBG program] listedin§5.154,
inaccordance withrequirementsineffectpriortoAugust17, 2015.”30
[Emphasismine.]
program participant does not necessarily affectthe acceptance of the AFH with respect to another
program participant.(i) The followingareexamples of an AFH that is inconsistentwith fair housingand
civil rights requirements:(A) HUD determines that the analysis of fair housingissues,fairhousing
contributingfactors,goals,or prioritiescontained in the AFH would resultin policies or practices that
would operate to discriminatein violation of the Fair HousingAct or other civil rights laws;(B) The AFH
does not identify policies or practices as fair housingcontributingfactors,even though they resultin the
exclusion of a protected classfromareas of opportunity. (ii) The followingareexamples of an AFH that is
substantially incomplete:(A) The AFH was developed without the required community participation or
the required consultation;(B) The AFH fails to satisfy a required element in §§5.150 through 5.180. Failure
to satisfy a required element includes an assessmentin which priorities or goals arematerially
inconsistentwith the data or other evidence availableto the program participantor in which priorities or
goals arenot designed to overcome the effects of contributingfactors and related fair housingissues .”
[Emphasis mine.]
30 24 CFR §5.160 (2015) “Submission requirements”: (a) FirstAFH—(1)….; (2)…; (3) Compliance with existing
requirements until first AFH submission. Except as provided in paragraph (a)(4) of this section, until such time as
program participants arerequired to submitan AFH, the program participant shall continue to conduct an
analysis of impediments, as required of the program participant by one or more of the HUD programs listed in
§5.154, in accordance with requirementsin effect prior to August 17, 2015.” [Emphasis mine.] This cited new
regulation,§5.154(a)(“Assessment of Fair Housing(AFH)”), applicableto Bloomfield, states,in part: “For HUD
program participants already required to develop plans for effective uses of HUD funds consistentwith the
statutory requirements and goals governingsuch funds,an AFH will beintegrated into such plans.” The new
§5.154(b) includes jurisdictionssuch as theTwp. of Bloomfield that receives CDBG funds grants (referring to 24
CFR part570, subparts D and I) and to Public HousingAuthorities,such as the Twp., which receives assistance
under sections 8 of the U.S. HousingAct of 1937 (42 U.S.C. 1437f or 42 U.S.C.1437g). The reader is invited to
review my Public Policy Memorandum, dated March 26, 2015,which discusses thecivil rights and Affordability
27. 27
We have nowcome to full circle onthe questionof whetherwhatIwrote inthe previous
memorandumisstill avalidanalysisof the Twp’s currentHUD regulatoryand statutory responsibilities.I
submitthatit is. Recentdevelopments,describedinthissupplemental memorandumhave only
strengthenthe original analysis.
The readeris againinvitedtoreview the Twp’sConPlanobligationsfoundinmyMarch 26, 2015
PublicPolicyMemorandum, PARTIII.B.,pp.15-20,previouslysubmittedtothe Mayor and Council.The
effectivedate of the final AFFHregulationswasAugust17,2015: afterI submitted thatMemorandum.
However, whatIwrote thenisstill legallyapplicable. Although24CFR §5.160(a) of the final regulation
doesnotapparently require Bloomfieldtosubmitanew five-yearConPlan toHUD witha AFH inanother
five (5) years,the Twp. isstill requiredto complythe HUD regulations in existence priorto August 17,
2015 relatedto documentingand strategizing for the removal of AffordabilityImpedimentsand
barriers to affordabilityunderthe HUD regulationsthatwere ineffectpriortothatdate: 24 CFR
§§91.200 to 91.253 and §§570.302, 570.303, 570.495 & 570.496, and HUD’s “Equal Opportunity&Fair
HousingReviewCriteriafor24 CFR SubpartO, §570.904(a)(1)(ii)). The CDBG regulations,requiringthe
Twp.to remove “affordabilitybarriers”and “barriersto affordability”are foundat 24 CFR §91.200(a),
91.210(e), 91.215(h) and §91.220(g)(j) & (k).
CONCLUSION
The factual, CDBG andfederal andstate regulatoryandstatutoryanalysisof the Bloomfieldof
municipal performance, dataandhousingtrends thatissetforth inmy previousMemorandum, pp.4-
20, isstrengthenedbysubsequentlegal,demographicandpublicpolicyevents,includingthose related
to Mt. Laurel,31
federal courtand HUD’ fairhousing rulingson“disparate impact,”andHUD’s July16,
2015 AFFH planningregulations governingthe Twp’sadministrationof itsCDBG program.
Impediment programmatic requirements that were in effect before August 17, 2015. See footnote 1 of that
memorandum as well as pp. 15-20 for an analysisof why the absence of a strong rent control ordinancewould be
an omission with CDBG and fair housinglegal implications.
31 See my March 26, 2015 Memorandum, pp. 25-40, on Mt. Laurel and this supplemental memorandum, pp. 9-20,
on the “present need” analysis for Bloomfield. Also,see footnote 1, here, on The New Jersey League of
Municipalities commissioned Econsult,Philadelphia,Pa.,which critiques Dr.Kinsey’s study which was
commissioned by the Fair Share HousingCenter. For purposes of argument, even if Dr. Kinsey’s 547 “present
need” calculation was inflated by 50%--a challengewe do not concede—it is clear thatthe Twp., pp. 17-18 of this
Supplemental Memorandum, developed 1,368 other units have no affordablehousingset-asides under its
inclusionary zoningordinance. [See footnote 24, here, on Twp. admission on the “build-out nature of Bloomfield
(96% developed)”.] Twenty-percent (20%) of this latter amount—274 affordableunits —were not developed under
the Twp’s zoningordinance,Chapter 112, and could havebeen affordablehousingresources for currentlow and
moderate income households livingin “deficient”housing,classified as “presentneed” households. So, 50% of Dr.
Kinsey’s 547 calculation is 274. That is exactly the number of affordable units that the Twp. did not provide for
local Bloomfield residents who are low and moderate income households residing in “deficient” housing as
defined by the N.J. Supreme Court as “present need” beneficiaries! The fact that the Twp. has virtually exhausted
physical sites for housingdevelopment makes itvirtually impossiblefor itto make-up for this omission before
2025.
28. 28
As I statedat p.4 of thisSupplemental Memorandum, mypublicpolicyandlegal analysisis
primarilyfoundedonthe State Supreme Court’slegal conclusionthatamunicipalitymayutilizedstate
statutory“police powers”toenacta rentcontrol ordinance toprotectincome-vulnerabletenantswhere
there isfoundto be a “sufficientlocal need.” The publicpolicyanalysisthatIpresentedonMarch 26,
2015—based on demographicanalysisandhousingtrends—aswell aslegal analysisof federal law
(CDBG, Title VIIIof civil rightsact,Section8,etc.) and state law (N.J.Law AgainstDiscrimination, Mt.
Laurel decisions),complementsandstrengthensthatargumentfora strongrent control ordinance that
isauthorizedunderthe N.J.Supreme Court’sconventional “police power”legal analysisthatisfounded
on the abilityof municipalitiestoprotectincome-vulnerable tenantsfromharmwhere there isfoundto
be “a sufficientlocal need.” Myargumentis thatthe Twp’slegal omissions,infailingtomeetitsfederal
CDBG (dutyto remove “barrierstoaffordability”),fairhousingand Mt.Laurel fair share programmatic
obligations,exacerbatesthat“local need”andcreatesthe obligationinthe Twp.toremedythatneedby
enactinga rentcontrol ordinance underits“police powers.
It is the veryabsence of an adequate “programmatic”housingplan—underCDBGregulations,
fairhousinglaws, Mt. Laurel affordable housingobligations,andthe Twp’s2008 inclusionaryzoning
ordinance--thatdrivesthe needfora strongrentcontrol ordinance underthe Twp’s“police powers”to
mitigate andcompensate forthese federal andState legal omissions.
For the reasonsstatedinthe original PublicPolicyMemorandumandthisSupplemental
Memorandum,the Twp.32
needstomitigate the confluence of itshousingdevelopmentand fairhousing
omissions by: enactingastrongrent control ordinance33
;correctingitspoorperformance underits
inclusionaryzoningordinance;addressingitsneglecttoaddress itsMt. Laurel “presentneed”(and
possible “gapperiodMt.Laurel fairshare obligation) tolow andmoderate income local resident
households residingindeficienthousing;abatingthe fairhousingdisparateimpactsthese omissions
have had on at-riskincome-vulnerablerentersin the “familial status”statutorily protectedclass;and
protectingother“cost-burdened”tenantresidentsbystrategicallyremoving,underCDBGregulations,
“affordabilityimpediments”and“barrierstoaffordability.”
32 These trends began long ago with the previous Twp. municipal administration and continuewith the present
one.
33 See pp. 7-9, here, for what I suggest arecritical elements in an ordinance.