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 Hawthorne Ave., Bloomfield, N.J.

_______________________________________________________________

Introduction

This supplemental update is submitted to the Council as a result of Corporation Counsel Michael Parlavecchio’s invitation to the public at the Twp. Council’s April 18, 2016 meeting. This is a supplemental update to my March 26, 2015 “Public Policy Memorandum – Rent Control” which I submitted to the Mayor, Council, Township Attorney, and Director of Community Development. I present this as a homeowner and not in a representative capacity for any individual, group or organization. The March 26, 2015 memorandum presented demographic data, housing trends, and state and federal legal arguments for the Township to consider in enacting a rent control ordinance which would be protective of vulnerable renter households.

After I submitted the Public Policy Memorandum to the Township on March 26, 2015, the factual and legal context under Mt. Laurel and other legal authorities changed somewhat on fair share “present need” and the “1999-2015 gap period” affordable housing obligations of N.J. municipalities; new relevant data has been released or uncovered from the Township through OPRAct requests; the U.S. Supreme Court issued a decision on “disparate impact” under Title VIII of the Civil Rights Act of 1968 (related to municipal government obligations to “familial status” discrimination issues in the provision of affordable housing opportunities); HUD developed new fair housing regulations related to families; and, HUD developed new Housing and Community Development regulations related to the obligation of municipalities to remove barriers to affordable housing related to “familial status” and zoning. All of these new developments are discussed below. (See “Conclusion” at pp. 27-28, here for the call to action.)

This updated supplemental public policy memorandum takes into consideration the Township’s August 21, 2015 response to my OPRAct request as to the latest status of the number of residential housing units (by bedroom distribution) of all of the projects that have been constructed and those currently under development (Oak Pond, Avalon, Hartz Mountain, etc.).

The Township’s 174-page response to that OPRAct request (APPENDIX F) contains resolutions from the Township Boards of Planning and Zoning. I distilled those pages into a concise summary for you (APPENDIX C) of that Board’s approvals of site plans as to the exact number of units built--or under development--in each project by bedroom distribution; i.e., studio, 1, and 2, bedroom units.

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The updated supplemental memorandum that I submit to you today discusses, in part, the Township’s Mt. Laurel arguable “present need” fair share obligation of 547 units of affordable housing through 2025 for Bloomfield low and moderate income residents currently living in “deficient” housing conditions; i.e., overcrowded, lacking plumbing or kitchen facilities. (For the legal and planning context on this, see the attached study by Dr. David N. Kinsey, pp. 5-7, APPENDIX A, here, revised in July 2015, on what “present need” means and his study’s attached Appendix A (APPENDIX B, here).

The bottom line is that this supplemental memorandum presents data,1 housing trends (first Memorandum, PARTS I & II, pp. 4-15) and legal analysis that strengthens the argument that there is a “rational basis” and a “sufficient local need” for the Twp. to exercise its “police powers” to enact a

1 See for instance, recent articles and studies that appeared after my original memorandum: “More Young Women Waiting to 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 have become so high as to be unmanageable for many young adults, especially those with 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, article by MaryAnn Spoto, Newark Star-Ledger (NJ.com) entitled “Record number of N.J. residents living in poverty, study says” (Nov. 12, 2015) reporting on 2015 study conducted by Legal Service's Poverty Research Institute, http://www.lsnj.org/PDFs/Benchmarks2015.pdf ("’The urgency to act is great, because the study confirms that despite significant job and economic recovery since the 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 be classified 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 utilities — without paying more than 30% of income on housing — a household must earn $4,362 monthly or $52,347 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly Housing Wage of $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: Expanding Options for Diverse and Growing Demand,” (“Key Facts”), Joint Center for Housing Studies 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 housing in 2014, including more 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 income for rent and utilities according to 2006-2008 estimates. See footnote 15, here. The “Key Facts” are at: http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/2015_jchs_rental_report_key_facts.pdf . See entire 44-pp. report, especially Table A-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

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strong rent control ordinance that exempts as few apartments as possible, within reason, and that has no provision for vacancy decontrol. See, Inganamort v. Borough of Fort Lee, 62 N.J. 521, 537-538 (1973) and Hutton Park Gardens, 68 N.J. 543, 564-565 (1975).

PART VII: update of March 26, 2015 Policy Memorandum (pp. 60-70)-- Response to Mr. Simoncini’s allegation that my Public Policy Memorandum, promoting the enactment of a strong rent control ordinance with no provision for vacancy decontrol, would produce an unconstitutional result.

At the Twp’s Council’s Conference meeting on April 11, 2016, Mr. Ronald Simoncini, lobbyist for the local real estate interests, responded to my testimony that evening during which I appealed to the Council to retain a progressive attorney specialist in rent control to assist in the drafting of a rent control ordinance containing the above-mentioned elements. (Mr. Parlavecchio had not yet assumed his responsibilities.) Mr. Simoncini stated that he had spoken to the former municipal attorney, Brian Aloia, Esq., who allegedly told him that my original March 26, 2015 Public Policy Memorandum was based on an illegal foundation; to wit: my legal premise for the Council enacting a rent control ordinance was unconstitutional because I was using rent control to create a “housing program”; whereas, the true legal foundation for a valid ordinance—according to Mr. Simoncini/Mr. Aloia--could only be sustained by legal challenge in court if it was designed under a “consumer protection” legal framework.

On the economic push of people leaving NYC for cheaper housing, see article by 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“Saving a New York Neighborhood from Gentrification,” editorial, New York Times, April 22, 2016: “[C]rushing rents and tenant displacement that have transformed so many working-class blocks of 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 Affordable Housing,” Posted on Shelterforce, October 10, 2012 http://www.shelterforce.org/article/2892/staying_afloat_the_ongoing_struggle_for_affordable_housing/ [“The rates of severe housing cost burdens for the lowest-income households are high and still growing. From 2007 to 2010, severe cost burdens among households earning minimum wage or less rose from 64 to 68 percent. Perhaps even more disturbing is that the number of households in this low-income category is growing faster than any other group. … . Another path out of cost burdens for low-income renter households is rental assistance—if they can find it. According to the “2009 HUD Worst Case Needs report”: http://www.nhi.org/go/WorstCaseHousing2009, only one in four very low-income households receive such assistance. And needs are growing much faster than assistance levels. … . With new construction generally unable to provide housing affordable to the lowest income groups, preserving the existing affordable rental stock is key to stemming the growth in cost burdens. Declines in the number of low-cost rental units over the past decade have made it more difficult for low-income families to find affordable rents without assistance.”]

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On the assumption that Mr. Simoncini accurately characterized Mr. Aloia’s legal opinion—because I did not have the same access to Mr. Aloia’s counsel that he apparently had—it is submitted that the challenge to my legal analysis is skewed and misplaced.

Rather, my public policy and legal analysis are primarily founded on the State Supreme Court’s legal conclusion that a municipality may utilized state statutory “police powers” to enact a rent control ordinance to protect income-vulnerable tenants where there is found to be a “sufficient local need.” The public policy analysis that I presented on March 26, 2015—based on demographic analysis and housing trends—as well as legal analysis of federal law (CDBG, Title VIII of civil rights act, Section 8, etc.), and state law (N.J. Law Against Discrimination, Mt. Laurel decisions), complements and strengthens that argument for a strong rent control ordinance that is authorized under the N.J. Supreme Court’s conventional “police power” legal analysis that is founded on the ability of municipalities to protect income-vulnerable tenants from harm where there is found to be “a sufficient local need.” My argument is that the Twp’s legal omissions, in failing to meet its federal CDBG (duty to remove “barriers to affordability”), fair housing and Mt. Laurel fair share programmatic obligations, exacerbates that “local need” and creates the obligation in the Twp. to remedy that need by enacting a rent control ordinance under its “police powers. It is the very absence of an adequate “programmatic” housing plan—under CDBG regulations, fair housing laws, Mt. Laurel affordable housing obligations, and the Twp’s 2008 inclusionary zoning ordinance--that drives the need for a strong rent control ordinance under the Twp’s “police powers” to mitigate and compensate for these federal and State legal omissions.

In Helmsley v. Boro. of Ft. Lee, 78 N.J. 200, 209 (1978), the N.J. Supreme Court summarized its cases on the legal use of municipal police power as the foundation for the enactment of rent control ordinances:

Municipal authority to enact rent control ordinances under the police power delegated by N.J.S.A. 40:48-2 was recognized in Inganamort v. Borough of Fort Lee, supra, 62 N.J. 521 (1973). A rent control ordinance is a valid exercise of municipal power if there is any rational basis for the enactment. Brunetti v. Borough of New Milford, supra, 68 N.J. at 594; Troy Hills Village, supra, 68 N.J. at 616; Hutton Park Gardens, supra, 68 N.J. at 564-65.

In sustaining the municipal police powers to enact a rent control ordinance under the above statute, the Supreme Court in Inganamort v. Borough of Fort Lee, supra, 62 N.J. at 537-538, indicated that the right of property may be restrained because of “a sufficient local need”:

That control of rents affects the exercise of the right to contract with respect to property is undeniable. But the right to contract is subject to the police power and no less so when the police power is exerted at municipal level. [Citation omitted.] Whether an ordinance relates to zoning, or contains a housing code, or imposes upon the landlord duties relating to health, it necessarily limits the use of property or the right to contract with respect to it. That the ordinance imposes restraints which the State law does not, does not spell out a conflict between State and local law. On the contrary the absence of a statutory restraint is the very occasion for municipal initiative. The police

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power is vested in local government to the very end that the right of property may be restrained when it ought to be because of a sufficient local need. 2 [Emphasis mine.]

The Supreme Court, in the early part of its decision in Inganamort, supra, 62 N.J. at 537, found:

We must assume there is a critical shortage of the housing covered by the several ordinances here involved and that tenants, trapped by the fact, are being exploited. The judgments were entered on pretrial motions in which this factual premise was not challenged.

There is clearly a “rational basis,” under Helmsley, supra 78 N.J. at 209, for a municipality like Bloomfield--given its demographic profile--to enact a strong rent control ordinance. The Supreme Court in Hutton Park Gardens v. West Orange Town Council, supra, 68 N.J. at 562, fn. 8 (1975), elaborated on this test when there was a substantive due process constitutional challenge to a rent control ordinance:

The sole task of the Court is to determine whether the legislation is without a reasonable supporting factual basis viewed as a police power measure. In any event, as will be more thoroughly discussed in Troy Hills Village [v. Parsipany-Troy Hills Tp. Council, 68 N.J. 604], supra at Point II, protection of a landlord's investment is adequately provided by the requirement that rent leveling ordinances permit recovery of a "just and reasonable" rate of return. [Emphasis mine.]

Hutton Park Gardens, supra, 68 N.J. 543, 564-565, established a very difficult burden for a challenger to meet to overturn a municipal exercise of its police power in enacting a rent control ordinance:

Municipalities have the power and authority to enact ordinances in support of the police power. Municipal ordinances, like statutes, carry a presumption of validity. [Citations omitted]. The presumption is not an irrebuttable one, [citations omitted], but it places a heavy burden on the party seeking to overturn the ordinance. Legislative bodies are presumed to act on the basis of adequate factual support and, absent a sufficient showing to the contrary, it will be assumed that their enactments rest upon some rational basis within their knowledge and experience. [Citations omitted.] This presumption can be overcome only by proofs that preclude the possibility that there could have been any set of facts known to the legislative body or which could reasonably be assumed to have been known which would rationally support a conclusion that the enactment is in the public interest. [Citations omitted.] The judiciary will not evaluate the weight of the evidence for and against the enactment nor review the wisdom of any determination of policy which the legislative body might have made. [Emphasis mine.]

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 pervasive phenomenon of governmental regulation of prices under the police power. For constitutional purposes, rent control is indistinguishable from other types of governmental price regulation. Despite the permanence and concreteness of real property, and the special place accorded it by the common law as expounded by the early commentators, its commercial use is no less subject to regulation under the police power than other, more ephemeral, goods and services. [Citation and footnote omitted.] The renting of residential property is as much an essential enterprise as the retail sale of food-stuffs, the extraction and processing of natural resources, the operation of a railroad, or the conduct of a banking business, [citation omitted], and equally subject to public regulation when the need arises.” [Emphasis mine.]

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In the present Bloomfield control rent debate context, the Twp. has admitted, in several of its documents that have been recently submitted to HUD seeking CDBG funding for low- and moderate income households, that there is clearly a severe need for affordable rental housing for “cost-burdened” local households and others. This constitutes “a reasonable supporting factual basis viewed as a police power measure” under Hutton Park Gardens, supra, at 562, fn. 8.3 (See definition of “cost burdened” at pp. 8-9, 11, of my March 26, 2015 Public Policy Memorandum; and need for affordable rental housing in the Twp’s 2010 Fair Housing Plan, pp. 24, 54-56, 61-66, 69; and its 2014 Five-Year CDBG Consolidated Plan, pp. 3, 5, 15, 16. In addition, the Twp. specifically states that its waiting list for its 270 units of it Section 8 Housing Choice Voucher program is high and it has stopped taking applications for this resource because of high demand. See my PPM, at pp. 11 & 40-51, on need for HCV recipients to have opportunities to have housing choice in racially and economically diverse parts of the Twp.)

On February 26, 2016, I sent to you a recent study, dated December 2015, on the 40-year history of rent control in New Jersey. I submit that it is useful in refuting many of the economic points in the N.J. context that Mr. Ronald Simoncini made in his public appearance at the December 14, 2015 regular Council meeting: Joshua D. Ambrosius, William J. Gilderbloom, William J. Steel, Westley L. Meares, and Keating, Dennis, “Forty years of rent control: Re-examining N.J. moderate local policies after the great recession,” Cities: The International Journal of Urban & Planning, Vol. 49, Dec. 2015, pp. 121-133. http://www.sciencedirect.com/science/journal/02642751/49 [See attached study here at the orange icon.]

That study, at p. 131, refers to an article by Brenzel, K. “Rent control battle in Hoboken ends after group pushing deregulation withdraws challenge,” NJ.com. (2014, February 19, 2014) <http://www.nj.com/hudson/index.ssf/2014/02/rent_control_battle_in_hoboken_ends_after_group_pushing_deregulation_withdraws_challenge.html> Retrieved 07.03.14. Note that Brenzel’s article refers to the work of the lobbyist, Mr. Ronald Simoncini, in Hoboken. The Cities study, at pp. 130-131, then characterizes the opponents of rent control in Hoboken as a “contrived ‘tax payer’ organization.”

At pp. 131-132 of this 12-pp. report, under the subtopic, “Policy implications and conclusions,” the authors of the evaluation of 40 years of rent control in New Jersey, conclude, in part:

This debate is ongoing in New Jersey—as demonstrated by the recent battles in Hoboken and other cities over whether to keep or scrap rent control. Our findings suggest that this passion, for or against, may be misdirected energy. It does not appear that these ordinances, net other intervening factors, have any community-wide impact on rents, rental quality or quantity, property appreciation, or foreclosure rates in the cities that have them. They may benefit the subset of residents enjoying lower rents by preventing rent gouging, but they have no macro effect on the median rent. Perhaps advocacy energies are better spent promoting affordability through other means. Perhaps supporters of the free market should find other areas of government regulation to lambast. Rent control is not harming the cities of New Jersey. … . [131/132] Across the nation rental affordability worsens and rents in New Jersey (whether rent

3 Hutton Park Gardens, supra, 68 N.J. at 562-563: “N.J. Const. (1947), Art. 1, § 1, like the federal due process clause, makes the constitutionality of governmental price regulation 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.]

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controlled or not) are much higher than most of the nation (National Low Income Housing Coalition, 2015). The intended impacts of New Jersey rent control ordinances over a 40-year period seem minimal when compared to cities without regulations. Housing activists and policymakers need to look at additional kinds of approaches to address the post-crash rental housing affordability crisis.

Landlords are ultimately protected under Hutton Park Gardens, supra, 68 N.J. at 572 in applying for a hardship rent increase to meet their constitutional right to receive a fair return on their investment:

Every rent control ordinance must be deemed to intend, and will be so read, to permit property owners to apply to the local administrative agency for relief on the ground that the regulation entitles the owner to a just and reasonable rate of return.

In my March 26, 2015 Public Policy Memorandum, PART VI.A, p. 54, it is pointed out that the N.J. Supreme Court in Helmsley v. Boro. of Ft. Lee, 78 N.J. 200, 210-211 (1978) stated that there are three separate fair-right-of-return formulas to address a landlord’s constitutional right to a fair return on its investment.4 So, if a landlord thinks that it is not receiving a fair return on its investment, it files for a hardship application and opens its books to the Rent Leveling Board. The landlord thus has a substantive constitutional due process remedy. The problem is that some landlords do not want to open their books to the light of day, which can reveal mistakes and/or refinancing transactions which can hide profits.

Some owners after 2001, when the interest rates were low, refinanced their mortgages and saved a bundle. Then, some took the profits from those transactions and bought other rental properties at a time when the rental market was booming and increased their profits further. Bloomfield’s rental vacancy rate, as reflected in the 2010 U.S. Census was 3.07%: a rate lower than it was at the time the Twp’s rent control ordinance was enacted in the late 1980s. (The rent control ordinance was terminated in 1994, except for “grandfathered” tenant households.) This lower tenancy vacancy rate, driven, in part by home foreclosures with former homeowners looking for apartments, led to an upward push on rents; i.e., lower vacancy rates led to higher rents with tenant income remaining flat throughout the 2007-2008 recession and beyond. [See my March 26, 2015 Public Policy Memorandum, PART VII, pp. 60-70, for a full discussion of the data and trends.]

4 See, 78 N.J. supra. at 210-211, were the Supreme Court outlined the history of the constitutional question, discussing three basic approaches to defining “fair return”:

“There are at least three basic approaches to defining fair return. In an early regulatory case, the United States Supreme Court decreed that return on fair value must 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 (but not mandating) the use of 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).”

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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 definition of capital improvement is tied to IRS depreciable items. That is a mistake. It should only be for new physical changes that provide a new benefit to all tenants that was not provided before. Maintenance replacements (not simply repairs) like roofs and boilers do not provide anything new. They get done when the cost of repair is greater than the cost of replacement. That is a cost of doing business that is built into the rent. An efficient operator will have a reserve for replacements.

• As to the definition of “rent,” the provision should be changed to read: “No charges shall be permitted for late rent, whether termed a late rental fee or interest on rent paid late, in excess of [Twenty ($20.00)] Thirty-Five ($35.00) Dollars, returned check fees in excess [Twenty ($20)] Thirty-Five ($35.00) Dollars, or any other similar charges.

• Exempting dwellings with 5 or fewer units does not make any sense. Tenants in smaller buildings have just as much need to be protected from unreasonable rent increases as those in larger buildings. In fact, tenants in smaller buildings are typically of lower income and have more questionable credit histories. They are more vulnerable, not less. The idea that the owners of smaller buildings have some special need to be able to gouge rents is unsupportable. They are running businesses, just as in a larger building, are not limited in their initial rent levels, and should therefore be able to be limited to reasonable rent increases without being deprived of a just and reasonable return. They are, also, frequently owners of many such small buildings, and thus totally comparable to owners of a large building. The only exemption that might make sense is for owner-occupied 2- or 3-unit dwellings, as these are not protected by the Eviction for Just Cause law. Rent control without eviction protection has limited value. Fewer exemptions provides for more affordable housing opportunities for low- and moderate income households: (1) Over 51% of tenant households in the Twp. who are low- and moderate income (i.e., earning less than 80% of median income) pay more than 30% of their adjusted gross income in rent and utilities; (2) the lower the number of units exempt, the higher the opportunity of tenants with Sec. 8 vouchers to be successful in finding apartments that are affordable; (3) the vacancy rate for rental housing in the Twp. is 3.07% making it difficult for cost-burdened tenant households to locate affordable housing; and, (4) lowering the number of exempt units promotes more housing opportunities for racial minority and families to move from areas of high racial and low-income concentration in the Twp. (See my March 26, 2015 Public Policy Memorandum, pp. 60-70, for a more exhaustive reasons for this coverage and why no vacancy decontrol should be permitted in an ordinance.)

• Delete: “Section 435-7D. Payment of rental increase for two consecutive years shall be construed to be an agreed increase and not subject to the provisions of this chapter except that in the event that the Board determines that the landlord has not served upon the tenant the rental statement set forth in § 435-1. The Board shall waive the two-year limitations period.” This is a large loophole for owners. Waiver notions should be decided by courts using statutory and common law principles.

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• The partial new construction exemption (redevelopment based) is irrelevant, as post-1987 new construction is exempt from rent control for 30 years (or length of conventional mortgage) under state law.

• The formula for fair return on landlord’s investment: Most of “fair net operating income” (FNOI) formulas are arbitrary (60% expense ratio is common - there are many profitable buildings, usually older ones, that are above 60%). An investment based formula is, imo, preferable, but it should be made clear that the investment, in this case equity investment, must be reduced by any withdrawals, which usually occur at refinancing. (See 435-10, I and J.) The Board must be able to see all refinancing information. Excessive purchase price which results in an inflated mortgage interest expense and inflated investment, should be disallowed. The (new or existing) owner must be both an efficient operator and an efficient investor. Such an investor would never buy a building that would immediately (or within a year or two) and predictably be in a hardship. The purchase price, investment, and mortgage interest expense must be reduced, for the purpose of a hardship determination, to that which would have been reasonable. This may be partially, but not fully addressed. One more thing on hardships. Expenses that are not expected to recur each year, but rather have a useful life of more than one year, should be prorated (divided by the number of years in their useful life). The Board should receive 5 years’ worth of annual income/expense statements (certified) so that comparisons for reasonableness can be made, and non-recurring expenses identified.

There should be a severe limitation on vacancy allowances, as vacancies could be filled at lower rents, yielding higher income and lower hardship. Management expense should not be allowed in self-managed buildings, and should be limited to no more than 5%. Administrative (office/lease writing) expenses are included in management expenses.

All contracted expenses must be arm’s length and every expense must be reasonable.

• There have been complaints that a rent leveling Board would have high administrative costs. The answer, in part, is to use part of HUD CDBG funds (over $800,000 per year) which, under federal law, is supposed to go for the needs of low- and moderate income persons. Right now, a lot of those CDBG funds go to pave streets and for public relations to promote the luxury developmental area in the Bloomfield Ave. corridor. Part of the housing market analysis that Blfd. is required, for instance, to provide is identification of “barriers to affordable housing,” 24 CFR §91.210(e): “[The consolidated plan to HUD] must explain whether the cost of housing or the incentives to develop, maintain, or improve affordable housing in the jurisdiction are affected by public policies, particularly by policies of the jurisdiction, including tax policies affecting land and other property, land use controls, zoning ordinances, building codes, fees and charges, growth limits, and policies that affect the return on residential investment.” (For more detail on how the CDBG program works for the benefit of low and moderate income households in this context, see federal regulations in my March 26, 2015 Public Policy Memorandum, pp. 15-18 and the Twp’s 2010 CDBG 5-year Consolidated Plan that was submitted to HUD. Appendix B to my PPM for summary of HUD’s ConPlan regulations.)

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PART III.E. update of March 26, 2015 Policy Memorandum (pp. 25-40) on Mt. Laurel issues: Twp’s affordable housing “present need” obligation. (After the date of that Memorandum, the N.J. trial courts have determined that there is an additional affordable housing “gap period” obligation 5 for municipalities for the period 1999-2016. Bloomfield’s possible “gap” obligation is not yet resolved.)

Bloomfield’s “Present Need” Obligation

In March 2015, the New Jersey Supreme Court issued a decision and an order stating that the N.J. Council on Affordable Housing (COAH) had not met its N.J. constitutional obligation to low- and moderate-income households (i.e., households whose income was under 80 percent of median income) in its failure to promulgate rules setting the obligations of municipalities in the State to determine their respective fair share obligations to develop affordable housing for these vulnerable households. Because of COAH’s failure to act, the Supreme Court ruled that regional Superior Court trial judges were to be assigned this task and municipalities, like Bloomfield, were given the opportunity to file declaratory judgment motions to establish whether they had a fair share obligation—called a “present need” and/or a “prospective need”—to facilitate the development a certain number of affordable housing units in their municipalities. It appears that the Twp. elected not to file such a motion according to a response to my OPRAct request.

Since the Supreme Court’s decision, the Fair Share Housing Center, one of the petitioners before that Court, commissioned a study by David N. Kinsey, PhD., FAICP, PP, Kinsey & Hand, to create a methodology to present to these regional trial courts to assist those courts in calculating the fair share obligations of municipalities who are within their respective venues. Dr. Kinsey authored his study entitled “New Jersey Low and Moderate Income Housing Obligations for 1999-2025 Calculating Using the NJ COAH Prior Round (1987-1999) Methodology” (April 16, 2015, revised July 2015).6 (See Dr. Kinsey’s APPENDIX A for his analysis of “present need,” pp. 5-7.) The formula that he used resulted in

5 See analysis below, 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 critique of 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 share obligations for municipalities were inflated. See http://www.njslom.org/letters/2015-0928-afford-housing.html. The Township of Bloomfield has failed to file a timely motion for a declaratory judgment in the Superior Court of New Jersey using the Econsult critique to challenge Dr. 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 alternative documentation demonstrating that its “present need” fair share obligation 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 challenges its performance. It is assumed that if legally challenged on the “present need” obligation, it would cite as a defense the Econsult critique of Dr. Kinsey’s analysis. But, it is disingenuous for Bloomfield to just “sit and wait” for a possible legal challenge in the face its local at-risk “cost burdened” renter population given its professed commitment to the Twp’s “quality of life.”

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his assessment of fair share obligations for every municipality in the state, including the Twp. of Bloomfield. He determined that Bloomfield did not have a “prospective need” fair share obligation; however, he determined that it has a “present need” fair share obligation of 547 affordable units (combined rental and homeowner). (See “Appendix A” of his study for Region 2 under “Bloomfield” which is labeled APPENDIX B to this updated Memorandum.)

In order to understand “present need” affordable housing obligation, it is useful to summarize Dr. Kinsey’s report in salient part. He states that: “COAH excluded cost-burdened households and their affordable housing needs from municipal housing obligations under the [NJ] Fair Housing Act, a determination upheld by the Supreme Court. Consequently, and consistent with the Supreme Court’s decision, the housing needs of cost-burdened households are not included in the fair share housing methodology presented in this report. “ [p. 2].

“Cost-burdened” households are those who are low and moderate income households (i.e., who have incomes under 80% of the area median income) who are paying more than 30% of their monthly adjusted income for housing and utilities. It is to be noted that these Bloomfield cost-burdened households are clearly income-vulnerable and of concern to the U.S. Department of Housing and Urban Development (HUD) in evaluating the Twp’s legal requirement to remove “barriers to affordability” (also known as “affordability impediments”) under the federal Housing and Community Development Act of 1974, as amended, and Title VIII of the Civil Rights Act of 1968, and regulations thereunder; however, for the purpose of determining the Twp’s “present need” legal obligation under the state N.J. Fair Housing Act (i.e., “Mt. Laurel” legislation), the needs of Bloomfield’s “cost-burdened” households do not factor into Dr. Kinsey’s “present need” calculation under Appendix A of his study to increase the Twp’s obligation to provide more than the 547 affordable housing units.

Dr. Kinsey presented in his study a brief history of how the N.J. Supreme Court developed its “present need” standard under the N.J. Fair Housing Act as part of the Court’s constitutional interpretation:

The Supreme Court directed that the Prior Round methodology be used to calculate municipal present need. As defined by COAH in its Second Round Rules in 1994, “Present need” means the sum of indigenous need and reallocated present need … . However, the Supreme Court also upheld COAH’s decisions, in its three iterations of Third Round rule-making, to no longer include “reallocated present need” in the fair share methodology. The Prior Round methodology defined “indigenous need”’ as deficient housing units occupied by low and moderate income households within a municipality … . In effect, such housing is in need of rehabilitation to comply with applicable housing code standards. The Prior Round methodology calculated the number of low and moderate income families living in ‘deficient housing’ at a subregional level, due to constraints on the availability of data at the municipal level, and then allocated indigenous need to municipalities. [Emphasis mine.]

Dr. Kinsey then states that data is now available at the municipal level from the U.S. Census Bureau in its decennial census and its American Community Survey of samples of the population. He then states that his report:

[U]ses the term “Present Need,” as directed by the Supreme Court, to mean the number of deficient housing units occupied by low and moderate income households within a

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municipality.” Present Need is a component of a municipality’s fair share housing obligations, which may be addressed under COAH Second Round rules by either a local housing rehabilitation program or by creating new units of affordable housing. [Emphasis mine.]

Dr. Kinsey then explains the process that he utilized in calculating the “present need” fair share affordable housing obligation of municipalities such as Bloomfield:

Present Need is calculated in a two-step process, similar to the process COAH has used to determine the Rehabilitation Share in a two-step process, most recently in 2014.

First, COAH identified total deficient housing by municipality by using three surrogates or indicators: (a) overcrowding in housing built before 1960, (b) housing lacking complete plumbing facilities, and (c) housing lacking complete kitchen facilities. In its March 2015 decision, the Supreme Court ruled that use of these three surrogates was acceptable. COAH also found through PUMS data in 2014 that about 14.86% of deteriorated units had multiple deficiencies and made an adjustment to avoid double counting.

Second, COAH determined the degree to which overcrowded and deteriorated housing would be occupied by low or moderate income households in each county, using 2007-2011 American Community Survey data, finding a range from 48.6% in Sussex County to 85% in Hunterdon County, with about a 65.3% statewide average.

COAH then applied those county percentages to the non-double-counted deficient housing in each municipality to compute the Rehabilitation Share for each municipality . [Emphasis mine.]

In an attempt to ascertain how Dr. Kinsey most likely arrived at 547 affordable units as Bloomfield’s “present need” fair share obligation, we must look to some recent reliable data sources that count only low and moderate income households (i.e., incomes under 80% of median) who are currently living in Bloomfield and in overcrowded and deteriorated housing conditions. Recall this involves counting only those households who are overcrowd in housing built before 1960, lack complete plumbing facilities and housing lack complete kitchen facilities. However, we are NOT to count “cost-burdened” households (i.e., those paying 30% or more of their yearly adjusted income for housing and utilities).

For this data we cite the Twp. of Bloomfield’s 2015-2019 Consolidated Plan (“ConPlan”) and 2015 One-Year Action Plan that the Twp., signed by the Mayor on May 1, 2015, that was submitted to HUD under the requirements of the federal Housing & Community Development Act of 1974 and regulations promulgated thereunder.7 The Table at p. 15 of the CP (below), entitled “Housing Needs

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 Housing Plan for the full text of HUD’s “Equal Opportunity & Fair Housing Review 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 requiring the Twp. to remove “barriers to affordability” are found 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 Against Discrimination (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 Housing Act: “marital status,” “affectional or sexual orientation,” “gender identify or expression,” and “source of lawful income used for rental...payments.” (“Familial status” is a protected class under both federal and state law.)

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Summary Tables: Housing Problems,” lists the number of households in Bloomfield--by the separate categories of “renters” and “owners” as well as by income—who fall within four listed “needs”: (1) “substandard housing – lacking complete kitchen or plumbing facilities”; (2) “severely overcrowded – with > 1.51 people per room (and complete plumbing or kitchen)”; (3) “Overcrowded – with 1.01 - 1.5 people per room (and none of the above problems)” ; and, (4) “Housing cost burden greater than 50% of income (and none of the above problems)”.8

For purposes checking Dr. Kinsey’s calculation that Bloomfield has a “present need” obligation of 547 units of affordable housing we need to ignore item four (4) on the above list and we are not to count any of the renter and homeowner households listed in the Table whose income is 80% or above the area median (i.e., ”>80-100% AMI”).9

So, the categories of households in the three listed “needs”—items (1), (2) and (3)—for renters is 729; and the for homeowners it is 175. The total for both renters and homeowners is 904.

As noted there is a difference of 357 units in Dr. Kinsey’s calculation of “present need” of 547 in Appendix A of his study and 904 units found in the Twp’s ConPlan, p. 15, Table below. Unless Dr. Kinsey understated the “present need” fair share obligation for Bloomfield, the difference in the numbers may be accounted for statistically by Dr. Kinsey’s reference in his study at p. 6: “COAH also found through PUMS data in 2014 that about 14.86% of deteriorated units had multiple deficiencies and made an adjustment to avoid double counting.”

8 HUD considers “cost-burdened” those low and moderate income households (i.e., those with incomes 80% of area median) who are paying more 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 low and moderate income tenants (i.e., households with income under 80% of area median) who reside in “deficient” housing--for Mt. Laurel “present need” purposes—are “cost-burdened,” it is reasonable to assume that at least 51% are based on the Twp’s 2006-2008 estimates. See Twp’s 2014 Consolidated Plan, p. 16, submitted to HUD. Extracts are in APPENDIX A to my March 26, 2015 Public Policy Memorandum.

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Once the “present need” fair share obligation is set--as determined by Dr. Kinsey for Bloomfield at 547 affordable housing units--the next question that needs to be addressed is whether those units can be addressed by “either a local housing rehabilitation program or by creating new units of

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affordable housing.” See p. 6 of Kinsey’s study and his footnote reference to COAH’s regulation, NJAC 5:93-5.1. Clearly, Bloomfield has some discretion here to use both methods. However, that discretion is seriously circumscribed by “facts on the ground”; i.e., (1) by the fact that according to the Twp’s CP, Table, p. 15, only 125 low and moderate income households, of the total listed, are in rental households that lack plumbing or kitchen facilities; (2) the vast remainder of the households (approximately 422) who are in “deficient” housing are overcrowded; and, (3) Bloomfield has not provided for the development of affordable units in the luxury housing that it has promoted in the face of its municipal inclusionary zoning ordinance, Chapter 112, which requires the construction of one (1) affordable unit for every four (4) market rate units that are developed. It is to be noted that it almost impossible to abate and rehabilitate the deficient conditions of overcrowded households without relocating them to affordable units! And, where would those relocation resources be if not by the Twp. “creating new units of affordable housing”?

The N.J. Supreme Court, in its March 10, 2015 opinion, __ N.J. __ (2015) (slip op. at p. 45), looked beyond the narrow exclusion of “cost-burdened” households in the fair share methodology analysis, and embraced the trial judge’s concern for “cost-burdened” households in AMG Realty Co. v. Twp. of Warren, 207 N.J. Super. 388, 422-23 [(Law Div. 1984) as to a municipality’s added duties to “cost-burdened” residents of a municipality:

In addressing the first iteration of Third Round Rules, the Appellate Division also approved the “exclu[sion of] the cost-burdened poor from the present need or rehabilitation share calculation.” In re Adoption of N.J.A.C. 5:94 & 5:95, supra, 390 N.J. Super. at 36. In doing so, the appellate panel noted that pre-FHA courts also had allowed exclusion of the “cost-burdened poor” from the fair share formula. Id. at 35 (citing AMG Realty [Co. v. Twp. of Warren], 207 N.J. Super. [388] at 422-23 [(Law Div. 1984)]). The court found that COAH’s decision to exclude the cost-burdened poor was a permissible exercise of discretion. Id. at 36.

Although the Bloomfield Twp’s “cost-burdened” local population is excluded from being counted in the Mt. Laurel methodology to determine the Twp’s “present need” fair share obligation, it is significant that the Supreme Court wrote with approval of the AMG Realty case and intimated that it expects a Twp. to meet its other obligations to this vulnerable class of low- and moderate-income households. In AMG Realty, supra, 207 N.J. Super. at 424, the trial judge wrote:

Nothing that has been said here concerning exclusion of a financial component should countenance a municipality's failure to undertake an aggressive program of pursuing any available rent supplement programs which may be available to assist those who are in financial need.

It is therefore submitted that the State case law language in AMG Realty is consistent with the more rigorous federal HUD Consolidated Plan regulations which require a CDBG-recipient Twp. to not “fail” (language of “omission”)—in the words of AMG Realty--to “undertake [] aggressive program[s]” which “may be available to assist those who are in financial need.”

It is submitted that, under the trial court’s above omission language in AMG Reality, it would be disingenuous and inequitable for the Twp. of Bloomfield to allege that its 547 “present need” fair share obligation is limited to a “Rehabilitation Share” strategy—i.e., use of only a rehabilitation program, as distinguished from providing new construction affordable rental housing for low and moderate income

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households who presently reside in “deficient” overcrowded rental housing-- in the light of the Twp’s conscious decision or culpable neglect in: (1) failing to enforce its inclusionary zoning ordinance, Chap. 112, to create one affordable unit for every four market-rate units in past and pending residential developments; (2) building-out (exhausting) all of its vacant land for luxury rental housing development thereby eliminating the opportunity in the future to construct affordable rental housing in the future;10 (3) with the physical impossibility of relocating—through “checkerboard,” or phased development--547 “present need” overcrowded rental households residing in “deficient” multifamily dwellings; and, (4) relying solely on its federally underfunded Section 8 HCV program to meet its HUD ConPlan obligations to low and moderate income renter households.

For equitable reasons, it is submitted that the Twp’s Mt. Laurel obligation must be broadly interpreted to include protecting low and moderate income “present need” households. The context of the Supreme Court’s favorable reference to the AMG Realty language cannot be narrowly interpreted to be limited to the Twp. applying for more Section 8 HCV Program funds when it knows very well that the Congressional appropriations will not be forthcoming in face of a history of massive budget cuts to that program.11

In addition, failure to adopt a rent control ordinance would violate HUD’s higher ConPlan regulatory standards and would constitute a regulatory “omission” to protect the “present need” Mt. Laurel class of low and moderate income beneficiary households living in “deficient” housing until a multi-year new construction/rehabilitation remedial plan is completed. A rent control ordinance is likely needed for many years to come to protect this protected Mt. Laurel class given the Twp’s 2008 admission that the Twp. is “built-out”; i.e., lacking in vacant land for residential.

In my March 26, 2015 Public Policy Memorandum to the Twp., p. 35, I wrote that since the Twp. submitted to NJ COAH its 2008 Housing Element and Fair Share Plan and 2008 inclusionary zoning ordinance (requiring “a set-aside for projects that generate five [5] or more residential units of one [1] affordable housing unit for every four [4] market rate units”), it appeared that none of the luxury rental developments that have been completed, and none currently under development, have any inclusionary zoning affordable-rental-unit set asides in their designs. At page 35 of my Memorandum, I listed several of these luxury development included: 44 Park Street, Avalon, Hartz Mountain, Block 243 Redevelopment Plan (“Annie Sez”), and Oakes Pond. On July 29, 2015, I sent an Open Public Records Act request asking that the Twp. provide the exact total units in each project under development—as well as those not cited in my Policy Memorandum—as well as the bedroom distributions for each of these projects.

The Twp’s responded to this request on August 21, 2015 with 174 pages of Twp. Planning and Zoning Board project site approvals with this data.12 See APPENDIX C, here for a site-by-site summary of

10 See footnote 24, here, on Twp’s 2008 admission in its 2008 Housing Element submission to COAH of the “ build-out nature of Bloomfield (96% developed), [and that] the Township’s overall land use pattern has remained substantially unchanged during the past 10 years, and only moderate future growth is expected to occur. … .”

11 See footnote 17, here, for the limited Congressional commitment to funding the Section 8 HCV Program.

12 The Twp’s August 21, 2015 OPRAct response to me states: “The following records are being provided in their entirety and are the ONLY documents in the Township’s possession responsive to your request: [1]. Resolutions from the Township’s Planning Board for 110 Washington Street, 252-303. [ 2]. 262 Liberty Street-56 Broad Street,

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those distributions. Note in the “remarks” portion of that grid the discussion of the school funding issues related to each luxury development, and the fact that “Oakes Pond” appears to be the only residential development where possible funding from tax contributions to the BOE for the additional students was recommended by the Twp. Planning Board to be explored by the Twp. Council.13

This and other data obtained from the Twp. through other OPRAct requests in 2015 confirms that, as of the date of St. Hilaire’s OPRAct request, that the Twp. had completed, or has under development, the following units:

Total units 1-bedroom units Studios 2-bedroom unitsRental units 1,438 627 120 693Ownership units 12 0 0 12Grant total rental & ownership units

1,45014 627 120 705

Aside from the 82-unit Heritage Village senior citizens’ project (74, 1-BR units & 8, 2-BR units) and the 12-unit homeownership project at 92-102 Willow St., none of these residential developments have Twp-enforced provisions for affordable housing set asides under the Twp’s inclusionary zoning ordinance which calls for a ratio of 1 affordable unit for every 4 market-rate units developed. This means that 1,368 other units have no affordable housing set-asides.15 Twenty-percent (20%) of this

92-102 Willow Street, 390 Franklin Street, 221-225 Belleville Avenue, 5 Lawrence Street, 192-200 Bloomfield Avenue, Parking Deck in Block 228 and 44-58 Park Street, all in response to 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 response that stated that the 177 Franklin St. project (the old South Junior High School) was slated for the development of 104 apartments.)

This response was 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 following residential development project sites, and indicate the 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 at Brookdale (“Liongate”); 177 Franklin Street redevelopment area; and 110 William St. redevelopment area.” (Liongate was not utilized for housing; instead, the site is being used for other non-housing purposes.)

13 It is not clear what action the Twp. Council took on this Planning Board suggestion.

14This total excludes the 361-unit Prism project (the old “Westinghouse” plant), the housing component of which is really physically located in East Orange but has a Bloomfield address for “marketing” purposes. This 1,450 unit total does include the 114-unit project at 177 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 ordinance to include in the study consideration of the Twp’s ordinance for the provision of affordable housing under the Twp’s Chapter 112 ordinance which calls for a 1:4 ratio of one unit of such housing for every four market-rate units. The Council declined my recommendation.

15Ironically, these higher income renter households are protected from rent control for 30 years while the Twp’s low and moderate income rented households, especially those who are “cost-burdened,” remain vulnerable. See

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latter amount—274 affordable units16—were not developed under the Twp’s zoning ordinance, Chapter 112, and could have been affordable housing resources for current low and moderate income households living in “deficient” housing, classified as “present need” households.

But for the Twp’s omission in failing to enforce its ordinance, a substantial number of low and moderate income households currently residing in Bloomfield in the category of “present need” households living in the Twp. in “deficient” housing—i.e., overcrowded, lacking plumbing or kitchen facilities—have missed the opportunity for affordable, safe and sanitary housing.

The devastating effect of this is that although the Twp. has until 2025 to meet Dr. Kinsey’s 547-unit “present need” fair share obligation under the constitutional requirements of the N.J. Supreme Court’s Mt. Laurel case law; however, because the Twp. has used-up practically all of the available space in the Twp. to build luxury rental housing, the Twp. is lacking vacant current housing development sites for future affordable housing to meet its “present need” Mt. Laurel obligation: an awful omission.

Recall, these households would not burden the school district with additional students because these “present need” households already live in the Twp. and their children are already in District schools.

It appears that only one residential development—Oakes Pond—has committed itself to help financially with the cost of schooling in the BOE district. It does not appear that any other of the housing developers have been called upon—or volunteered—to provide assistance to the BOE for their privilege to gentrify the Twp. See my “remarks” on BOE issues on the grid In APPENDIX C which summarizes the Twp. Planning Board or Zoning Board residential developments provided by the Twp. in its August 21, 2015 OPRAct response. It is not clear why the Planning Board and Twp. Council have not applied the same school cost reimbursement concept to all of the other developments other than Oakes Pond.

The Twp. states that the 82-unit Heritage Village, across from Town Hall, is an affordable housing resource for disabled and elderly person that is available to low and moderate income households who may fall into the housing “deficiency” category—no plumbing, kitchen facilities or overcrowd. However, that project is of limited usefulness to this “present need” protected class because: (1) the project is for limited beneficiaries due to the fact that all of the units are one-bedrooms, except for four (4) two-bedroom units; (2) this resource is not conducive for families in the “present need” housing “deficiency” category; and, (3) there is no indication that households in this “present need” category are receiving a tenant selection “preference” by the developer for admission to this project, a fact that can only be ascertained after all 82 units are occupied.

The existence of a strong rent control ordinance with minimum dwelling unit exemptions and with no provision for vacancy decontrol would mitigate the problem of relocation until such time that the Twp. expeditiously constructs affordable units to meet the Mt. Laurel “present need” obligation through 2025. Although rent control is not a “housing program,” the failure to the Twp. to provide affordable housing is a component to the “police power” requirement that there be a “sufficient local

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 affordable units which should have been set aside under the Twp’s inclusionary zoning ordinance, Chap. 112. This could have gone to meet the Twp’s “present need” Mt. Laurel fair share obligation, however established, either by Dr. Kinsey or by Econsult.

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need” for an ordinance. Failure to meet this obligation aggravates “local need.” This is particularly important in the face of the fact that the Bloomfield’s Housing Authority (PHA) has only 270 HUD-issued vouchers of Section 8 Tenant-Based Program that are already distributed to income-vulnerable tenants; and the PHA has over 430 households on its waiting list which has been “frozen” with no other households being able to get on that waiting list. The paltry increase Congress’s FY16 HUD appropriations for this federal program, signed by the president on December 18, 2015, is unlikely to make much of difference in increased voucher funding for the Bloomfield PHA to meet its waiting list demand.17

Bloomfield’s possible “gap period” affordable housing obligation

It is within the realm of possibility that the Twp. of Bloomfield has a Mt. Laurel fair share obligation that is beyond whatever “present need” obligation that Essex County Superior Court decides as a result of the N.J. Supreme Court’s March 10, 2015 decision in In re Adoption of N.J.A.C. 5:96 & 5:97 by N.J. Council on Affordable Housing, __ N.J. __ (2015)(M-392-14).

That Court declared that COAH had abdicated its constitutional obligation to implement the Mt. Laurel legislation leading the Court to assign to every county judicial vicinage a trial judge who would entertain municipal motions for declaratory judgments to determine municipal affordable fair share obligations. Those trial courts are to establish “prospective” and “present need” obligations, if they exist. Then something new occurred when a trial judge in Ocean County, Hon. Mark A. Troncone, J.S.C., commissioned a special master (Richard B. Reading) to assist him with the fulfillment of his judicial obligations under the Supreme Court decision. Mr. Reading reviewed fair share planning data that the Fair Share Housing Center (FSHC) submitted to the Court, including documentation from Dr. David Kinsey.18

The FSHC states that this ruling could lead to the construction of thousands of new homes for New Jersey families. Judge Troncone, in a decision in the context of Ocean County,19 dated February 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 program appears in the National Low Income Housing Coalition budget chart, as of December 18, 2015, at: http://nlihc.org/sites/default/files/FY16HUD-USDA_Budget-Chart.pdf . There was a negligible funding increase in HUD’s Tenant-Based Rental Program (Section 8 Vouchers) for contract renewal set- asides from $17.486 billion in FY15 to $17.681 billion in the current FY16 budget. It is doubtful that the Twp. PHA will receive anything but a negligible increase—if any--beyond the present contract authority subsidy for its current 270 Sec. 8 voucher units.

18 See Dr. D. Kinsey’s March 24, 2016 analysis that was the FSHC’s submission in the Ocean Co. context that included a discussion of “present need” at pp. 13-20, especially pp. 19-20 that discusses the Special Master Reading’s report to Judge Troncone. (Note that Reading has been commissioned by Judge Carey, Essex Co. in the pending cases involving W. 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

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 report so as to:

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2016, Dkt. No. OCN-L--2640-15, rejected arguments by the New Jersey State League of Municipalities and several individual municipalities that they should be able to ignore the housing needs of working families, people with disabilities, and low-income seniors that arose over the past 15 years. (Municipalities, including the N.J. League of Municipalities, filed an interlocutory appeal in late March, early April 2016, to Judge Troncone’s February 18, 2016 order in this Ocean County case to the Appellate Division where the “gap” obligation issue is pending decision.)

FSHC states that the Ocean County decision, which may have far-reaching effects beyond Ocean County, will help ensure that tens of thousands additional New Jerseyans get access to new housing opportunities. It will also substantially increase municipal fair housing obligations beyond the unrealistically low numbers proposed by a consortium (through its study by Econsult) of over 200 municipalities. Judge Troncone rejected the central conclusion of a report submitted on behalf of more than 200 towns that was designed to exclude working families, seniors and those with disabilities from permanent homes. It argued that towns should not have to provide fair housing opportunities for a 15-year period that began in 1999, when the state’s fair housing laws were in flux.

The ruling relied on the analysis of court special master Richard B. Reading, who has been appointed not only in Ocean County but also in Essex County, by Judge Carey, to advise the court as to fair share obligations. Reading, in a report to Judge Troncone, recommended that the court include housing needs from 1999 to 2015 as part of municipal fair share obligations. Similar reports have already been requested from Reading by Judge Carey. In his March 24, 2016 scheduling order in Mt. Laurel cases involving the Essex County municipalities of West Caldwell, Maplewood and Fairfield, Judge Carey ordered that Mr. Reading evaluate what the “gap period” fair share obligation for all of the other municipalities in Essex County, presumably including the Twp. of Bloomfield.

So, that pending case—which Bloomfield is not a party to—will conceivably bear on the Twp. of Bloomfield’s ”present need” and “gap period” fair share affordable housing obligation under the N.J. Fair Housing Act and the N.J. Supreme Court’s March 2015 Mt. Laurel decision. Bloomfield has made a decision not to file a declaratory judgment action in the Essex County vicinage to seek clarification on its fair share obligation and it is apparently willing to accept the judicial finding of obligation—without participating--in the upcoming trial of these three Essex County municipalities.

“1. Include, as a separate and discrete component, the affordable housing need which arose during the “gap period” encompassing the period from the end of the second round housing cycle in 1999 to the present into his methodology in determining the statewide and regional housing need and the allocation of that need to the constituent Ocean County municipalities.“2. Apply FHA’s 1000 unit cap provision as directed by this opinion. A municipality’s present and prospective need for the third round housing cycle together with the gap period need shall all be subject to the cap. A municipality’s present and prospective need shall be accounted for first and then the gap period need is to be added. … .” [Emphasis mine.]

Mr. Reading’s report, “Bridging the Gap: 1999-2015 ‘Gap Period’ Affordable Housing Needs” (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 .

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PART III.C. update of March 26, 2015 Policy Memorandum (pp. 21-23) on Twp. obligation to comply with the federal Fair Housing Act of 1968 to avoid “disparate impact “ on families in its implementation of municipal residential zoning powers.

The Supreme Court of the United States issued an opinion on June 25, 2015 in Texas Depart. of Community Affairs, ___ U.S. ___ (No. 13-1317)20 that interpreted the federal Fair Housing Act, 42, U.S.C. §§3601-3619 et seq., to permit housing discrimination actions where there is a “disparate impact” on certain civil rights protected classes under that statute. The case deals with issues of race; however, the Fair Housing Act also includes “familial status” as among the protected classes regardless of the race of the households affected. Although the legal issues are complex and no attempt will be made here to explore the full application of the Court’s holding to the Bloomfield context for the provision of affordable housing for families, it is clear that the Fair Housing Act applies to the denial of housing opportunities for protected classes to include income-vulnerable families, regardless of their race.

The Court indicated that suits targeting unlawful zoning laws and other housing restrictions that unfairly exclude minorities from certain neighborhoods without sufficient justification are at the heart of disparate-impact liability. See, e.g., Huntington v. Huntington Branch, NAACP, 488 U. S. 15, 16–18. It ruled that recognition of disparate-impact liability under the federal Fair Housing Act plays an important role in uncovering discriminatory intent: it permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment. Clearly, municipalities may provide allegedly “neutral” reasons for their actions; however plaintiffs are not required to prove discriminatory intent to prevail in these zoning cases.

In the Bloomfield context, it is troublesome that the Twp. has consistently failed to apply its inclusionary zoning ordinance, Chapter 112 of the Municipal Code, to its development and facilitation of hundreds of units of luxury housing. That ordinance calls for the development of one affordable housing unit for every four market-rate units developed. Current Bloomfield resident income-vulnerable households who are in the category of beneficiaries of the Twp’s Mt. Laurel “present need” fair share obligation—i.e., 547 low and moderate income households,21 many of whom are families residing in “deficient” housing—have been denied the opportunity to participate in residing in the over 700 two-bedroom units developed as luxury housing, none of which provide a realistic affordable housing opportunity for “cost burdened” renter households in the “familial status” protected class under the federal Fair Housing Act of 1968.

No attempt here is made to evaluate the full merits of such a “disparate impact” discrimination claim. However, there is a colorable basis for the Twp. to examine the implications of its actions in

20 See also, article by 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 critique of Dr. Kinsey’s study. The Twp. is a member of the League, but the Twp. has been silent on its position on Dr. Kinsey’s estimate.

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failing to address the affordable housing needs of this Mt. Laurel “present need” class of family low and moderate income households who presently reside in deficient housing in our town.

The U.S. Supreme Court’s decision in the above case was preceded by the U.S. Department of Housing and Urban Development’s (HUD) promulgation of its “disparate impact” enforcement regulations, 24 C.F.R Part 100, which defined “disparate impact” and set forth the procedure for assessing the merits of a claim for discrimination. (See APPENDIX E for a relevant portion of the regulation, 24 C.F.R. §100.500.)22 HUD’s comments, 78 Fed.Reg. at 11468, to its final regulations are instructive on the Twp’s omissions in not enforcing its inclusionary zoning ordinance; and its failure to enact a strong rent control ordinance, that has a no vacancy decontrol provision and fails to minimize the number of dwelling units covered:

HUD agrees with the … commenter that the [U.S. Fair Housing] Act is best interpreted as prohibiting actions that predictably result in an unjustified discriminatory effect. HUD’s interpretation is supported by the plain language of the Fair Housing Act, which defines ‘‘aggrieved person’’ as any person who ‘‘believes that such person will be injured by a discriminatory housing practice that is about to occur,’’ and which specifically authorizes HUD to take enforcement action and [Administrative Law Judges] ALJs and courts to order relief with respect to discrimination that ‘‘is about to occur.’’ Moreover, courts interpreting the Fair Housing Act have agreed that predictable discriminatory effects may violate the Act. [Footnotes omitted.][Emphasis mine.]

My March 26, 2015 Public Policy Memorandum documents23--through various factual sources (including data in the Twp’s own 2010 Fair Housing Plan and 2014 Consolidated Plan/Annual Plan)--the adverse disparate impact that the Twp’s inclusionary zoning omissions and rent control omissions presently have, and predictably have, on diminishing affordable housing opportunities for the protected “familial status class” of income-vulnerable households in the Twp.24 It is important to note that the 22 See HUD’s comments to its final regulations in 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 failure to include affordable two-bedroom and higher dwelling units in the 1,368 luxury units that have no affordable housing set-asides, notwithstanding the Twp’s inclusionary zoning ordinance’s call for a ratio of 1:4 of affordable units to market-rate units. The Twp. admits in its 2010 Fair Housing Plan 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 due to the high cost of living in this area. Approximately one-third of the Township’s residents pay 30 percent or more of their income on housing costs. Based on this statistic, more affordable housing is needed in Bloomfield and throughout the County. With the cost of housing increasing each year, Essex County risks losing residents to more affordable areas. … . 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 according to 2006-2008 estimates. These percentages represent an increase of 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.]

24 The Twp’s 2008 Housing Element & Fair Share Plan to COAH, p. 17, states that “[d]ue to the build-out nature of Bloomfield (96% developed), the Township’s overall land use pattern has remained substantially unchanged during the past 10 years, and only moderate future growth is expected to occur. The majority of future growth and development in the Township will be generated 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

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federal Fair Housing Act was amended to include the “familial status” protected class to the classes found in the original Act; i.e., race, national origin, etc. The comments to the final HUD regulations, 78 Fed.Reg. at 11469, are clear in stating that the “familial status” class must be read into HUD’s and the case law’s concern for establishing truly integrated and balanced living patterns:

Recognizing liability for actions that impermissibly create, increase, reinforce, or perpetuate segregated housing patterns directly addresses the purpose of the [federal Fair Housing] Act to replace segregated neighborhoods with ‘‘truly integrated and balanced living patterns.’’25

PART III.B. update of March 26, 2015 Policy Memorandum (pp. 15-20) the federal Housing and Community Development Act of 1974 and regulations that relate to the Twp’s obligation to have appropriate strategies for the removal of affordability impediments (barriers to affordability).

Subsequent to my submitting the Public Policy Memorandum to the Twp. on March 26, 2015, HUD promulgated regulations, called “Affirmatively Furthering Fair Housing (AFFH),” on July 16, 2015 at 80 Fed. Reg. 42271-42371, 24 CFR §§5.150-5.168,26 which strengthened the fair housing components of the Community Planning and Development regulations--24 CFR §§91.200 to 91.253 and §§570.302, 570.303, 570.495 & 570.496--that I cited at pp. 15-20 (and Appendix 2, there) of that Memorandum concerning the obligation of municipalities like Bloomfield in its future 5-year ConPlans and One Year Action Plans to address the removal Affordability Impediments (AI) and barriers to affordability for income-vulnerable households in certain civil rights protect classes, to include racial and “familial status” classifications.

Although the new AFFH regulations (summarized below) do not technically take effect for five years, two things are important relative to the need to enact, now, a strong rent control ordinance and enforce its inclusionary zoning ordinance, Chap. 112: (1) HUD’s current CDBG and fair housing regulations are still in effect that govern the Twp’s obligation to analyze and remove affordability impediments and barriers to affordability for income-vulnerable renter households and households in

pursuant to the [NJ] Local Housing and Redevelopment Law in 2002.” [Emphasis mine.]

25 As to the issue of the Twp’s inclusionary zoning ordinance that was not enforced to provide a 1:4 ratio set-aside of affordable units to market rate units, HUD’s comments, 78 Fed.Reg. at 11478, are perhaps instructional that “familial status” disparate impact effects can occur where housing is rendered “unavailable because of [this] protected characteristic”:

Because the illustrated conduct may violate the Act under either an intent theory, an effects theory, or both, HUD also finds it appropriate to replace ‘‘in a manner that has a disparate impact or has the effect of creating, perpetuating, or increasing segregated housing patterns’’ because of a protected characteristic with ‘‘otherwise make unavailable or deny dwellings because of’’ a protected characteristic. As discussed in the ‘‘Validity of Discriminatory Effects Liability under the Act’’ section above, the phrase ‘‘otherwise make unavailable or deny’’ encompasses discriminatory effects liability. [Emphasis mine.]

26 See new regulations at www.hud.gov/AFFH .

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the “familiar status” protected class under fair housing statutes;27 and (2) if the Twp. in the future is to submit an adequate AFH and ConPlan to HUD, it will need to show that it had been implementing a strategy, all along, that was consistent with protecting these vulnerable groups if it is to avoid fair housing culpability and sanctions at that time. It would be disingenuous five years from now for the Twp. to represent to HUD that it just recognized the needs of these at-risk populations—when all of the available land for housing development is lost--which are clearly identified in the Twp’s 2010 Fair Housing Plan, 2014 ConPlan and Annual Plan.

That said, I now turn to a brief summary of HUD’s new AFFH regulations that were finalized after I submitted the Public Policy Memorandum to the Mayor and Council on March 26, 2015. Then, I will restate the view, expressed in that Memorandum, that HUD’s current CDBG and fair housing regulations govern the Twp’s need to enact a strong rent control ordinance and enforcing its inclusionary zoning ordinance to provide affordable rental housing set-asides.

On July 8, 2015, HUD announced its final regulations to further fair housing.28 The press release stated in part:

The U.S. Department of Housing and Urban Development (HUD) announced a final rule today to equip communities that receive HUD funding with data and tools to help them meet long-standing fair housing obligations in their use of HUD funds. HUD will also provide additional guidance and technical assistance to facilitate local decision-making on fair housing priorities and goals for affordable housing and community development.

For more than forty years, HUD funding recipients have been obligated by law to reduce barriers to fair housing, so everyone can access affordable, quality housing. Established in the Fair Housing Act of 1968, the law directs HUD and its program participants to promote fair housing and equal opportunity. This obligation was intended to ensure that every person in America has the right to fair housing, regardless of their race, color, national origin, religion, sex, disability or familial status. The final rule aims to provide all HUD program participants with clear guidelines and data they can use to achieve those goals. [Emphasis mine.]

At its website, HUD described the purposes of this new AFFH planning regulation:

HUD’s rule clarifies and simplifies existing fair housing obligations for HUD grantees to analyze their fair housing landscape and set locally-determined fair housing priorities and goals through an Assessment of Fair Housing (AFH). To aid communities in this work, HUD will provide open

27 HUD has prepared instructional guided for jurisdictions such as Bloomfield on what is expected of them under CDBG regulations that preceded 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 that govern the Twp’s CDBG Affordability Impediment’s obligation at the current time, see Appendix AA, here, which is an extract from an article by Ed Gramlich from the National Coalition for Low Income Housing entitled “Affirmatively Furthering Fair Housing” (2015), written after publication of HUD’s proposed regulation, but prior to HUD’s issuance of the final AFFH regulations on July 16, 2015.

28 See also, article on 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, like school vouchers, are sometimes criticized for helping a few while leaving many behind. ‘A child’s course of life should not be determined by the ZIP code she’s born in,’ President Obama declared last year.”

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data to grantees and the public on patterns of integration and segregation, racially and ethnically concentrated areas of poverty, disproportionate housing needs, and disparities in access to opportunity. This improved approach provides a better mechanism for HUD grantees to build fair housing goals into their existing community development and housing planning processes. In addition to providing data and maps, HUD will also provide technical assistance to aid grantees as they adopt this approach. [Emphasis mine.]

HUD commented on the AFFH on the applicability of fair housing assessment of a municipality’s zoning ordinances, 80 Fed. Reg. at 42310:

[T]he purpose of this assessment is to enable HUD program participants to better fulfill their existing legal obligation to affirmatively further fair housing, in accordance with the Fair Housing Act and other civil rights laws.

It is important to note…that, while zoning and land use are generally local matters as stated by the commenters, when local zoning or land use practices violate the Fair Housing Act or other Federal civil rights laws such as title VI of the Civil Rights Act, section 504 of the Rehabilitation Act, or the Americans with Disabilities Act, they become a Federal concern, as with any violation of Federal law that occurs at a local level. See, e.g., U.S. v. City of Black Jack, Missouri, 508 F.2d 1179, 1187-1188 (8th Cir. 1974), cert. denied, 422 U.S. 1042 (1975); U.S. v. Yonkers Board of Education, et al., 837 F.2d 1181 (2d. Cir. 1987), cert. denied, 486 U.S. 1055 (1988).

Inclusion of zoning and land use is not intended to assume these issues will have such implications for most or many program participants. However, including zoning and land use for consideration is needed to gain an accurate overall picture of local housing and neighborhood issues, such as the availability of affordable rental housing in a diverse set of communities.

The new regulations require that each ConPlan program participant and each PHA participating with a local government in developing an AFH submit an AFH at least once every five years. PHAs undertaking their own AFH would be required to have annual updates. Unlike the AI, the AFH would be submitted to HUD for review and approval. HUD could decide not to accept an AFH, or a portion of one, if it is inconsistent with civil rights laws or if the assessment is substantially incomplete.29 For example:

29 HUD’s final AFFH regulation, 24 CFR §5.126 (“Review of AFH”), contains certain review standards of municipalities such as Bloomfield:

“(b) Nonacceptance of an AFH. (1) HUD will not accept an AFH if HUD finds that the AFH or a portion of the AFH is inconsistent with fair housing or civil rights requirements or is substantially incomplete. In connection with a regional or joint AFH, HUD’s determination to not accept the AFH with respect to one program participant does not necessarily affect the acceptance of the AFH with respect to another program participant. (i) The following are examples of an AFH that is inconsistent with fair housing and civil rights requirements: (A) HUD determines that the analysis of fair housing issues, fair housing contributing factors, goals, or priorities contained in the AFH would result in policies or practices that would operate to discriminate in violation of the Fair Housing Act or other civil rights laws; (B) The AFH does not identify policies or practices as fair housing contributing factors, even though they result in the exclusion of a protected class from areas of opportunity. (ii) The following are examples 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 assessment in which priorities or goals are materially inconsistent with the data or other evidence available to the program participant or in which priorities or goals are not

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• If the AFH was developed without community participation or consultation.

• If the AFH fails to satisfy the required elements of the regulation, such as priorities that are materially inconsistent with data and other evidence. In order for a ConPlan or PHA Plan to be approved, and therefore a program participant to receive funds, an approved AFH would be necessary.

The ConPlan’s “Strategic Plan” (five-year plan) would have to describe how a jurisdiction’s priorities and specific objectives will affirmatively further fair housing by having strategies and actions consistent with the goals and other elements of the AFH. The ConPlan’s Annual Action Plan would have to describe the actions a jurisdiction plans to carry out in the upcoming year to address fair housing issues identified in the AFH. The rule refines the current definition of “certifying” that a jurisdiction will “affirmatively further fair housing” by stating in 24 CFR §1.561(e) that each program participant ”must certify that it will take meaningful actions to further the goals identified in its AFH conducted in accordance with the requirements in §§5.150 through 5.180 and 24 CFR 91.225(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 Bloomfield just submitted a ConPlan and One-Year Annual Plan in 2015--the new AFH regulations do not require the Township to submit an AFH with a ConPlan for quite some time into the future. However, these new regulations require jurisdictions such as Bloomfield to follow the current CDBG Consolidated Plan/Annual Plan obligations "as required of the program participant by one or more of the HUD programs [such as the CDBG program] listed in §5.154, in accordance with requirements in effect prior to August 17, 2015.”30 [Emphasis mine.]

We have now come to full circle on the question of whether what I wrote in the previous memorandum is still a valid analysis of the Twp’s current HUD regulatory and statutory responsibilities. I submit that it is. Recent developments, described in this supplemental memorandum have only strengthen the original analysis.

The reader is again invited to review the Twp’s ConPlan obligations found in my March 26, 2015 Public Policy Memorandum, PART III.B., pp. 15-20, previously submitted to the Mayor and Council. The

designed to overcome the effects of contributing factors and related fair housing issues.” [Emphasis mine.]

30 24 CFR §5.160 (2015) “Submission requirements”: (a) First AFH—(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 are required to submit an 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 requirements in effect prior to August 17, 2015.” [Emphasis mine.] This cited new regulation, §5.154(a)(“Assessment of Fair Housing (AFH)”), applicable to Bloomfield, states, in part: “For HUD program participants already required to develop plans for effective uses of HUD funds consistent with the statutory requirements and goals governing such funds, an AFH will be integrated into such plans.” The new §5.154(b) includes jurisdictions such as the Twp. of Bloomfield that receives CDBG funds grants (referring to 24 CFR part 570, subparts D and I) and to Public Housing Authorities, such as the Twp., which receives assistance under sections 8 of the U.S. Housing Act 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 the civil rights and Affordability 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 analysis of why the absence of a strong rent control ordinance would be an omission with CDBG and fair housing legal implications.

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effective date of the final AFFH regulations was August 17, 2015: after I submitted that Memorandum. However, what I wrote then is still legally applicable. Although 24 CFR §5.160(a) of the final regulation does not apparently require Bloomfield to submit a new five-year ConPlan to HUD with a AFH in another five (5) years, the Twp. is still required to comply the HUD regulations in existence prior to August 17, 2015 related to documenting and strategizing for the removal of Affordability Impediments and barriers to affordability under the HUD regulations that were in effect prior to that date: 24 CFR §§91.200 to 91.253 and §§570.302, 570.303, 570.495 & 570.496, and HUD’s “Equal Opportunity & Fair Housing Review Criteria for 24 CFR Subpart O, §570.904(a)(1)(ii)). The CDBG regulations, requiring the Twp. to remove “affordability barriers” and “barriers to affordability” are found at 24 CFR §91.200(a), 91.210(e), 91.215(h) and §91.220(g)(j) & (k).

CONCLUSION

The factual, CDBG and federal and state regulatory and statutory analysis of the Bloomfield of municipal performance, data and housing trends that is set forth in my previous Memorandum, pp. 4-20, is strengthened by subsequent legal, demographic and public policy events, including those related to Mt. Laurel,31 federal court and HUD’ fair housing rulings on “disparate impact,” and HUD’s July 16, 2015 AFFH planning regulations governing the Twp’s administration of its CDBG program.

As I stated at p. 4 of this Supplemental Memorandum, my public policy and legal analysis is primarily founded on the State Supreme Court’s legal conclusion that a municipality may utilized state statutory “police powers” to enact a rent control ordinance to protect income-vulnerable tenants where there is found to be a “sufficient local need.” The public policy analysis that I presented on March 26, 2015—based on demographic analysis and housing trends—as well as legal analysis of federal law (CDBG, Title VIII of civil rights act, Section 8, etc.) and state law (N.J. Law Against Discrimination, Mt. Laurel decisions), complements and strengthens that argument for a strong rent control ordinance that is authorized under the N.J. Supreme Court’s conventional “police power” legal analysis that is founded on the ability of municipalities to protect income-vulnerable tenants from harm where there is found to be “a sufficient local need.” My argument is that the Twp’s legal omissions, in failing to meet its federal CDBG (duty to remove “barriers to affordability”), fair housing and Mt. Laurel fair share programmatic

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 Housing Center. For purposes of argument, even if Dr. Kinsey’s 547 “present need” calculation was inflated by 50%--a challenge we do not concede—it is clear that the Twp., pp. 17-18 of this Supplemental Memorandum, developed 1,368 other units have no affordable housing set-asides under its inclusionary zoning ordinance. [See footnote 24, here, on Twp. admission on the “build-out nature of Bloomfield (96% developed)”.] Twenty-percent (20%) of this latter amount—274 affordable units —were not developed under the Twp’s zoning ordinance, Chapter 112, and could have been affordable housing resources for current low and moderate income households living in “deficient” housing, classified as “present need” 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 housing development makes it virtually impossible for it to make-up for this omission before 2025.

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obligations, exacerbates that “local need” and creates the obligation in the Twp. to remedy that need by enacting a rent control ordinance under its “police powers.

It is the very absence of an adequate “programmatic” housing plan—under CDBG regulations, fair housing laws, Mt. Laurel affordable housing obligations, and the Twp’s 2008 inclusionary zoning ordinance--that drives the need for a strong rent control ordinance under the Twp’s “police powers” to mitigate and compensate for these federal and State legal omissions.

For the reasons stated in the original Public Policy Memorandum and this Supplemental Memorandum, the Twp.32 needs to mitigate the confluence of its housing development and fair housing omissions by: enacting a strong rent control ordinance33; correcting its poor performance under its inclusionary zoning ordinance; addressing its neglect to address its Mt. Laurel “present need” (and possible “gap period Mt. Laurel fair share obligation) to low and moderate income local resident households residing in deficient housing; abating the fair housing disparate impacts these omissions have had on at-risk income-vulnerable renters in the “familial status” statutorily protected class; and protecting other “cost-burdened” tenant residents by strategically removing, under CDBG regulations, “affordability impediments” and “barriers to affordability.”

32 These trends began long ago with the previous Twp. municipal administration and continue with the present one.

33 See pp. 7-9, here, for what I suggest are critical elements in an ordinance.

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