Welcome to the Holland Township Affordable Housing Web Page

For questions or comments on Affordable Housing in
Holland Township please contact:

Elaine DeRosa, Municipal Housing Liaison
Phone:  (908)995-9086
Fax:  (908)995-0883

A Brief History and Overview on Affordable Housing Requirements in New Jersey

         In 1975, the New Jersey Supreme Court decided that developing municipalities have a constitutional obligation to provide a variety and choice of housing so that low and moderate income individuals and families could be accommodated.  Then, in 1983, the Supreme Court expanded this decision and stated that all municipalities had to plan and zone for their fair share of the State’s need for low and moderate-income housing.  The Fair Housing Act (FHA) was enacted by the Legislature in 1985, establishing the Council on Affordable Housing (COAH) and empowering COAH to adopt regulations to implement the Fair Housing Act.  COAH is the State’s administrative alternative to the Courts.

         COAH has developed substantive and procedural Rules pertaining to the provision of affordable housing and has assigned fair share numbers to each municipality.  COAH’s Rules offer many different options for providing affordable housing.  COAH reviews and approves a municipality’s affordable housing plan and grants “Substantive Certification” of the municipality’s Housing Element and Fair Share Plan, assuming it complies with all of COAH’s Rules.

         Receiving Substantive Certification from COAH protects a municipality from the alternative of an exclusionary zoning lawsuit, which generally results in the award of a “builders remedy” to the plaintiff.  A “builder’s remedy” is awarded by the Court when a municipality does not have a certified plan indicating how it will meet its fair share of the State’s need for affordable housing.  Essentially, a developer is permitted by the Court to bypass local zoning laws and build a high density development as long as the development includes a substantial number of affordable housing units.  It is in the best interest of Holland Township to have COAH’s protection through the Substantive Certification process to protect the Township from a “builders remedy” lawsuit. 

A Summary of Holland’s Past Affordable Housing Activities

First Round Plan

         Holland Township received it’s first round Substantive Certification from COAH in 1992.  At that time, the Township’s fair share obligation was to rehabilitate (bring up to Code) 28 homes occupied by low and moderate income households.  Of the 28, 26 homes were rehabilitated in the first round leaving 2 units still to be addressed in the second round.  Holland Township’s entire first round obligation has now been satisfied. 

Second Round Plan

         Holland Township’s second round fair share obligation was 21 units:  5 units slated to be rehabilitated (which also encompassed the two left over from the first round) and 16 new construction units.  The Township’s second round Housing Element and Fair Share Plan, which was certified by COAH at the end of 2004, proposed to address the second round obligation in the following manner:

1. A four (4) unit Regional Contribution Agreement (RCA) with the City of Lambertville.  This has been fully executed.
2. Four (4) units of affordable age-restricted housing.  This has not been completed and will still have to be addressed in the third round.
3. Ten (10) accessory apartments, six (6) of which have been completed and are currently occupied by qualified households.  We are close to finalizing a contract to create three more accessory apartments.

         Holland’s second round Substantive Certification protects the Township from a “builders remedy” lawsuit until 2010, but only as to the second round fair share obligation.  The third round fair share obligation began accruing in 2004, and the Township is not automatically protected by the second round Substantive Certification from “builders remedy” lawsuits related to the third round.

COAH Status
as of September, 2007

• Round One Completed – 26 units rehabilitated

• Round Two Obligation (21 Units) – 5 units of rehabilitation and 16 new construction units (see breakdown above).

• Round Two Certification ends December 2010, but only

covers second round compliance.

• 2004-2014 Third Round Obligation not yet determined.

Third Round Plan

>> COAH PROPOSES NEW THIRD ROUND RULES <<

COAH had issued new Rules for calculating the municipal fair share obligation for the third round in 2005.  In 2007, the New Jersey Appellate Court invalidated a portion of those Rules.  Although the Township still has a continuing obligation to provide affordable housing, we do not yet know how many and what types of units will need to be provided.  Revised third round rules are due to be adopted before the beginning of 2008.

Holland Township recently submitted an interim third round Housing Element and Fair Share Plan to COAH.  The Township cannot yet know what is expected in terms of the total number of new affordable housing units it will have to provide in the third round. The interim plan was adopted and submitted to COAH as a way of continuing to protect the Township from “builders remedy” litigation until the final plan can be prepared in response to the anticipated Rules. 

The Township is not required to fund affordable housing.  Fees are collected from developers to cover the cost of the housing rehabilitation program and the accessory apartments program.  We are permitted by COAH to collect 1% of the equalized value of new residential construction and 2% of the equalized value of new commercial construction.  Holland Township has grown at such a slow rate that the funds from development fees are limited and have not, to date, covered the full costs of these programs.

Understanding that each municipality is unique, COAH permits a variety of innovative approaches to providing affordable housing.  The following is a brief explanation of the pros and cons of some of the options that are available to Holland Township:

• Buy Down Program – In this program, the Township would purchase an existing home, bring it up to current Construction Code standards and then sell it to a low or moderate income household at a restricted price determined by COAH to be “affordable” (averaging around $125,000). 

         The cost of this program to the Township would be substantial.  As an example, the purchase of a market rate unit at an average cost of $356,700, added to the cost of bringing the unit up to Code if it is not already, and then reselling it for roughly $125,000, could cost the Township as much as $251,700, excluding legal and administrative costs. 

         Holland Township does not currently have the development fees available to fund this type of program nor does it anticipate a level of development that would result in such fees becoming available.  Additionally, this type of program would undoubtedly require Holland to outsource the administration of such units to a COAH-approved agency or to hire additional staff to administer the program locally.  Either option could result in the establishment of a municipal tax rate, thus increasing residents’ overall tax bills.

• Regional Contribution Agreements – This is when a portion of the municipality’s affordable housing obligation can be sent to another municipality at a cost of $35,000 per unit, which must be paid by the sending Township.  There is a limited percentage of the municipal affordable housing obligation that is permitted by COAH to be transferred out to other towns, and the choice to do this affects other aspects of the affordable housing program (such as how many units in the Township are permitted to be age-restricted).  Holland has already paid for the transfer of four units to Lambertville (at the previously approved rate of $25,000 per unit), but the Township will eventually be reimbursed for this expenditure by a developer.

• Municipally Sponsored Units – This is when the Township itself (or a local Housing Authority) undertakes the acquisition of a site and the construction of new affordable housing units, either for rent or for sale.  Such a program would necessitate obtaining outside funding, which is currently unavailable.  Should such funding become available in the future, this alternative would be reviewed.

• Affordable Housing in Inclusionary Developments – This is when a builder constructs (as part of a “inclusionary” residential development) a percentage of the total number of units he is building as affordable units that are then deed restricted for affordability to and occupancy by only qualified low and moderate income households.  Some increase in density has been held by the Appellate Court to be required in order to accomplish this. 

         In some cases, the affordable units may be “age-restricted” (limited to occupancy by households 55 years of age or older).  Up to one quarter of the municipal affordable housing obligation can be met through age-restricted housing.  Obviously, if a developer is supplying the affordable housing, there is no cost to the Township to create the affordable units.

• Alternate Living Arrangements – This includes Group Homes and Transitional Facilities for the disabled, homeless, etc.  One bedroom in such a facility is equal to one COAH credit.  This is an excellent way to address part of the affordable housing obligation.  To date, however, Holland has been unsuccessful in attracting a group home provider.

• Echo Housing – This is a modular, self contained unit erected on the site of an existing dwelling.  Echo units are restricted to low and moderate income households 55 years of age or older and/or disabled.  Echo units may only be used to fulfill the rehabilitation obligation.  Such units do not count in meeting the new construction obligation.

• Rehabilitation – This is a program for existing low and moderate income residents of the Township who live in substandard housing.  Residents may qualify for an interest free loan from the Township to bring a dwelling up to COAH standards.  This loan is paid back and the funds are returned to the Township for use by other applicants when the dwelling is sold.  Although Holland Township has been highly successful with its rehabilitation program, rehabilitation cannot be used to fulfill the new construction portion of the fair share obligation, it can only be used to address the rehabilitation obligation.

• Accessory Apartments – These are separate self-contained dwelling units, with a kitchen, sanitary facilities, sleeping quarters and a private entrance, created within existing homes or accessory structures on a residential lot.  The owners of the units receive a subsidy of $10,000 per unit to either create a new unit or bring a preexisting unit up to Code, in return for agreeing to a deed restriction that the unit will be affordable to and occupied by a qualified low and moderate income household for a period of 10 years.  Holland Township has had great success with its second round accessory apartments program.  Accessory apartments, however, are not likely to be a viable option for the third round, since COAH will be requiring 30 year deed restrictions instead of 10 year deed restrictions in the third round. 

We are always looking for additional opportunities and ways to provide affordable housing and welcome your suggestions.  Please do not hesitate to contact us with your ideas.  We would also urge you to come back and visit this web page regularly, as more information will be posted periodically.

Here is the link to the COAH website where additional, more technical information can be obtained:  http://www.state.nj.us/dca/coah/