V. Housing Element and Fair Share Plan

Original Adoption: August 20, 1997 (updated November 13, 2000)

Substantive Certification granted: August 4, 1999

Substantive Certification expires: August 4, 2005

This Housing Element and Fair Share Plan addresses Mendham Township's constitutional mandate to provide a realistic opportunity for the construction and/or rehabilitation of affordable housing in the Township, consistent with the regulations of the New Jersey Council on Affordable Housing (COAH). It was originally adopted by the Planning Board in August 1997 and submitted to COAH with a Petition for Substantive Certification. During the review process from 1997 to 1999 the Township participated in mediation administered by COAH to settle the Mount Laurel litigation described below. In 1999, the Township reached a settlement with the litigant and was granted Substantive Certification by COAH, memorializing credits for 38 housing units planned in the 1980’s and the methods by which the Township would address four additional units required by COAH.

Housing Element Requirements

With the passage of the Fair Housing Act in 1985 (P.L. 1985, C.222), the Municipal Land Use Law (MLUL) was amended to require a Housing Element as a mandatory component of the municipal Master Plan. A variety of components must be incorporated into every Housing Element, summarized as follows:

· An inventory of the municipality's housing stock by age, condition, value and occupancy characteristics;

· A projection of future housing construction for the next six years;

· An analysis of the municipality's demographic characteristics including household size, income level and age;

· An analysis of existing and future probable employment characteristics of the municipality;

· A determination of the municipality's present and prospective fair share of low and moderate income housing and its capacity to accommodate low and moderate income housing; and

· A consideration of the lands that are most appropriate for the construction of low and moderate income housing, including structures which may be rehabilitated and lands of developers, if any, who have expressed a commitment to provide low and moderate income housing.

 

The Council on Affordable Housing

The 1985 Fair Housing Act created a new state agency, the Council on Affordable Housing (COAH), to provide an administrative alternative to the courts in reviewing and mediating fair housing litigation. COAH is responsible for publishing estimates of housing need for six-year periods, based in large part upon growth projections. The first estimate was made in 1986 and covered the period from 1987-1993. In 1993, a second estimate was made which included a revision to the initial estimate, resulting in estimated fair share obligations for every New Jersey community covering the 12-year period from 1987-1999. COAH is also responsible for establishing regulations governing the preparation and implementation of housing plans and mediating disputes between landowners and municipalities. COAH's standards, guidelines and policies apply to all communities that choose to "participate" with COAH (or are court-transferred) and seek "substantive certification" of their municipal housing plans. Obtaining COAH's certification of a housing plan enables a municipality to protect itself from Mount Laurel litigation for the period of certification (six years).

Background of Mount Laurel Litigation

In 1983, prior to passage of the Fair Housing Act, the Township of Mendham became involved in Mount Laurel litigation. Resolution of the litigation by the Superior Court resulted in a Settlement Agreement and Judgment of Compliance on July 15, 1985. The Judgment was based upon the rezoning of three tracts of land that produce 38 affordable housing units as part of market-rate housing developments (inclusionary housing). The Judgment provided "repose" for a six year period ending in 1991. In 1988, after passage of the Fair Housing Act, the Planning Board adopted a Housing Element to comply with the amended MLUL requirements listed above and incorporate the provisions of the Settlement approved by the Court. In 1993, COAH adopted new housing need projections for every community in the state and advised the Township of its new cumulative 12-year housing obligation. Township officials met with COAH staff to discuss the need for a new plan, and in 1994 the Planning Board adopted the "Housing Element and Fair Share Plan, 1993-1999" to address COAH's new estimate of housing need. Prior to submitting the plan to COAH and petitioning for Substantive Certification, a lawsuit was filed by a Township property owner alleging that the Township had not complied with the Mount Laurel mandate. The Superior Court transferred this litigation to COAH in June 1997. As a result of the transfer to COAH the Planning Board adopted a new plan in 1997 (referenced above) and was granted Substantive Certification in 1999.

HOUSING GOALS AND OBJECTIVES

The goals and objectives of this Housing Element and Fair Share Plan are as follows:

1. Comply with the constitutional fair housing mandate.

2. Establish 38 credits for housing produced as a result of the 1985 Judgment of Repose.

3. Consistent with COAH's estimate of the need for rehabilitation in Mendham Township, provide an opportunity for the rehabilitation of one home that is in need of repair, and which is occupied by a lower income household.

4. Consistent with the Fair Housing Act and COAH rules, provide for the transfer via a Regional Contribution Agreement, of three units of new housing needed to satisfy the Township's affordable housing requirement for the period 1987-1999.

 

HOUSING AND DEMOGRAPHIC Data

As indicated above, the Municipal Land Use Law requires an analysis of housing and demographic data as part of any Housing Element. The 1990 US Census is the most recent available comprehensive database of this type of information for Mendham Township.

The Fair Housing Act and the Municipal Land Use Law require that certain population and demographic information be described in the Housing Element in relation to housing trends and needs. The appropriate data is described below.

The Census shows that in 1990 Mendham Township had a total population of 4,537. The population density in 1990 was 254 persons per square mile, in comparison to Morris County as a whole with 898.5 persons per square mile. The Township experienced a period of rapid growth in the decades from the 1950's through 1980's with the population doubling between 1960 and 1980. Population data from 1930 to 1990 is detailed below. Population Growth: 1930-1990

(Source: Morris County Data Book, Morris Co. Planning Board, 1996)

The Township's future growth is expected to be moderate in relation to historic trends. The Morris County Planning Board has compiled the following projections based upon the availability of developable land. Population Estimates and Projections

(Source: Morris County Data Book, Morris Co. Planning Board, 1996)

Household size in Mendham Township is fairly consistent with Morris County as a whole. The average number of persons per occupied housing unit was 2.83 according to the 1990 Census, a decrease from the 1970 average of 3.50. Despite the decrease in average household size over that period, the Township's population experienced an increase from 3,697 in 1970 to 4,537 in 1990. The long-term decline in average household size that has occurred over many decades can be expected to continue. Persons in Household: 1990

(Source: U.S. Census)

Average Persons Per Household

(Source: Morris County Data Book, Morris Co. Planning Board, 1996)

Consistent with national trends, the most important trend in population age characteristics of Mendham Township residents is the increase in the number of older citizens. During the decade from 1980 to 1990, the teenage population declined substantially, from 23% down to 14% of the population. During the same period, the population aged 45 and older increased from 36% to 43% of the population. As a percentage of the population, persons 55 years of age or over represented almost 24% (1080 persons) of the total population in 1990.

The Census shows that the median age was 42.1 years in 1990. Of the Township's total population of 4,537 in 1990, 2,370 (52.2%) were females and 2,167 (47.8%) males. The median age among females in 1990 was 41.6, while among males it was 42.6. The following table displays the population by age from the 1990 Census.

Population by Age

(Source: U.S. Census)

The median household income in Mendham has traditionally been higher than for Morris County as a whole. In 1989, the median was $102,896 as compared to the Morris County median of $56,273. In 1989 per capita income in Mendham Township was $47,118, an increase of nearly 210% since 1979. Per capita income for Morris County as a whole was $25,177 in 1990. Only 2.44% of the local population fell below the poverty level in 1989.

Employment Characteristics

According to the NJ Department of Labor, there were 695 private sector jobs available in Mendham Township as of September 1995 (the latest date for which this data is available). This is based upon employer reporting for employees covered by unemployment insurance, but it is possible that employers are attributing their business location to Mendham Township when in fact the business may be located in another municipality nearby. The Township is skeptical about the accuracy of this job number because of the absence of commercial activity in the community. The Morris County Planning Department has gathered statistics concerning employment and the labor force of residents in Morris County by community. According to data the County obtained from the NJ Department of Labor, 63 persons in the Township were unemployed in 1994 out of a total labor force of 2,277 persons. This represents an unemployment rate of 2.8 % as compared to the County average of 5.1% at that time. According to the U.S. Census in 1990, out of 2261 workers, 1,376 Mendham Township residents worked within the County while 700 residents worked outside the County, 185 worked outside of New Jersey and 135 residents worked at home. The largest proportion of residents worked in the Finance, Insurance, Real Estate, and Service Industries (especially health, educational and other professional services). The average travel time to work was 27.6 minutes, which is consistent with the large proportion of residents working within Morris County.  

Housing Data

The Census indicates that in 1990 there were 1,712 dwelling units in the Township at an average density of 0.15 units per acre (based on the total acreage in the community). The vacancy rate was 7.1% in 1990 with 121 units reported vacant.

Like most Morris County communities, owner-occupied single family detached dwellings are predominant in the Township. Out of 1,591 occupied units reporting at the time of the Census, 1,479 units were owner-occupied while 112 were renter-occupied in 1990. The mean number of rooms per unit was reported to be 8.3 indicative of relatively large homes. Most homes (67%) have four, five or more bedrooms. The following table displays housing types and occupancy characteristics from the 1990 Census. Housing Types by Occupancy: 1990

(Source: U.S. Census)

Mendham Township's housing values are also detailed in the Census. In 1990, the median housing value for owner-occupied units was $431,500. The lowest values reported were between $100,000 and $124,999 with 8 out of 1,277 owner-occupied housing units reporting this data. Median gross monthly rent for leased housing in Mendham Township was reported in 1990 as $991 for 83 units reporting rental rates in 1990. Eight units reported rents between $450 and $499/month; seven units reported rents between $500 and $549; 13 units reported rents between $700 and $749; 14 units reported rents between $750 and $999 per month and 41 reported rents over $1000 per month. All tenants paid extra for one or more utilities in 1990 according to the Census Bureau.

The age of the housing stock is sometimes a gauge of the overall condition of housing in a community. It is a key indicator in COAH's estimation of the need for rehabilitation. In a community such as Mendham Township, however, it may also be indicative of the historic qualities of the area. As of 1990, the median year that all housing units were built in Mendham Township is 1966. For Morris County as a whole, the median year that all housing units were built is 1962. The largest numbers of homes were built between 1970 and 1979 but 260 units were built before 1940 as shown in the table below. Age of Housing

(Source: U.S. Census, 1990)

The 1990 Census contains data giving an indication of the incidence of substandard or overcrowded housing within a community. Units lacking plumbing, heating, or complete kitchen facilities are counted. Indicators of substandard housing such as these are used by COAH to estimate the likely number of units within a community that may be substandard and occupied by lower income households. In 1993, COAH estimated that there were nine substandard dwellings in Mendham, known as indigenous need. The 1990 Census data reveals that all housing units had complete plumbing facilities, complete kitchens, and all had some form of heating supply. There is also little evidence of overcrowding in the Township's housing stock, another COAH indicator of substandard housing. Only six units reported 1.01 to 1.50 persons per room, while there were no units reporting a greater number of persons per room. Other building deficiencies not counted by the Census can, however, indicate a need for rehabilitation. Examples include units that might need a new roof, furnace, replacement windows and other structural repairs or improvements not counted by the Census. While COAH statistics indicate that in 1990 nine units may have been substandard and occupied by lower income households, the agency also estimated that eight homeowners would rehabilitate their homes on their own without government assistance, called "spontaneous rehabilitation" by COAH (see section entitled "Determination of Housing Need"). The one remaining substandard unit assumed to be occupied by a lower income household is the portion of the municipal housing obligation known as the rehabilitation component. According to COAH rules, the rehabilitation component is one portion of the housing obligation for which any community must plan - either a rehabilitation program - or in lieu of rehabilitation, new housing construction.

Projection of Housing Construction

The moderate growth rate prevalent in the decade from 1980 to 1990 is a continuing trend borne out by the construction activity records maintained by the Township. The following table displays the total number of dwelling units authorized by building permits for the years 1990 through 1996. During that seven-year period, a total of 191 homes were authorized, bringing the total housing stock to 1,903 units as of December 1996. Based upon approximately 27 dwellings per year on average since 1990, it is estimated that a total of approximately 162 dwelling units will be added to the housing stock over the next six years, including the remaining 12 units of inclusionary housing not yet constructed. New Residential Dwelling Construction Activity: 1990-1996

(Source: Morris County Data Book, Morris Co. Planning Board, 1996

and Township Records)

Determination of Housing Need

The Mount Laurel Supreme Court decisions concluded that New Jersey's municipalities have a constitutional obligation to take affirmative steps to provide their fair share of the region's housing needs. When the Fair Housing Act was enacted, COAH was empowered to periodically (every six years) make estimates of housing need for every community in the state. The most recent COAH estimates were published in 1993 and they cover the 12-year period from 1987-1999. COAH's estimates are made on the basis of existing housing needs (substandard housing occupied by lower income households), growth projections and other available planning data. The projections should take into account available infrastructure (water and sewer facilities), undeveloped land (based upon satellite data), median income data, the value of nonresidential ratables, and the community's planning area designation within the adopted State Development and Redevelopment Plan. A complex formula was derived by COAH (in cooperation with Rutgers University) to attempt to take these factors into account for all municipalities. For Mendham Township, the 1993 COAH estimate resulted in pre-credited need totaling 42 units (see footnote 2 on the following page). COAH then subtracts credits/reductions for housing already provided (zoned or built) in the municipality. When formulating the numbers, COAH was not aware of all of the units resulting from the Township's 1985 Settlement and Judgment of Compliance, because it only reduced the 42 unit obligation by 18 units rather than the 38 provided for in the Township's zoning. NJAC 5:93-3.1 (CREDITS/REDUCTIONS) provides that COAH grants reductions/credits based upon information supplied by court-appointed Masters (Professional Planners representing the court in individual Mount Laurel cases). The reduction is supposed to be based upon units planned in the community (or transferred via a Regional Contribution Agreement) whether or not the units have actually been built. Subparagraph (b) states:

"In determining calculated need, the Council (COAH) has also provided a reduction to the municipal housing obligation based on the realistic opportunity a municipality created in response to its 1987-1993 housing need through regional contribution agreements, plans for new construction, rental bonus credits, or through its zoning powers. The source for this information includes data from the Council's records, county planning boards and Masters appointed by the court. To the extent that this information is incomplete or incorrect, the Council shall modify the calculated need, in accordance with this chapter."

The factors and COAH estimates that make up the obligation are displayed in the table below. Substituting 38 units for the 18 units displayed as a "reduction" results in the corrected calculated need of four units. COAH-estimated Housing Need: 1987-1999

COAH rules provide that a municipality may receive reductions and credits for housing activities conducted in the past that produced affordable housing. As a result of the 1985 Judgment of Compliance, the Township provided zoning for the construction of 38 affordable units, all of which are eligible for COAH credit as shown in the table below. Reductions/Credits for Past Housing Plans

Consideration of Lands most

appropriate for the Construction

of Affordable Housing

The Fair Housing Act requires that the Township take under consideration the commitments of any developers who have expressed an interest in constructing affordable housing in the Township. Any sites rezoned for inclusionary housing must be available, developable, suitable and approvable as those terms are defined in COAH's rules.

The Existing Land Use map on page 36 displays the locations of the inclusionary housing sites that have already been zoned to produce affordable housing in accordance with the court-approved settlement in 1985. As part of the Mount Laurel litigation (Ko vs. Mendham Township) the plaintiff property owner had expressed a willingness to construct affordable housing as part of an inclusionary development if zoning for a high residential density is permitted on a 26.9 +/- acre tract of land located on the south side of Route 24 east of the Drakewick development. For the reasons explained below, the Township chose not to rezone this property for higher density and inclusionary development.

The New Jersey State Planning Commission (SPC) has adopted the New Jersey State Development and Redevelopment Plan (SDRP). The SDRP is an outgrowth of the legislation which was companion to the Fair Housing Act in 1985 creating the Commission whose purpose was to formulate a new "State Master Plan" to guide the use of land throughout the state in future years. The SDRP divides the state into five Planning Areas based on specific delineation criteria and each with discrete planning goals and objectives designed to effectuate the principles of the Plan. The entire Township has been designated as within Planning Area 5 (Environmentally Sensitive Planning Area) in the SDRP. A fundamental tenet of the State Plan is that new growth should be oriented to "centers" and Planning Areas 1 (PA-1: Metropolitan Planning Area) and 2 (PA-2: Suburban Planning Area) where adequate infrastructure exists or is planned. Infrastructure should not be extended to, or expanded within Planning Area 5, in order to discourage "sprawl" development. According to COAH rules adopted in 1993, new inclusionary housing should be developed in Planning Areas 1 and 2. Within Planning Area 3 (PA-3: Fringe Planning Area), new inclusionary housing should be developed in designated "centers." In Planning Areas 4 (PA-4: Rural Planning Area) and 5 (PA-5: Environmentally Sensitive Planning Area), COAH requires that new inclusionary housing be located within designated centers. There are no centers designated by the State Planning Commission in Mendham Township and the property owned by the Plaintiff in Ko vs. Mendham Township is not located in a center. In view of the numerous options available under COAH's rules, and the very small remaining affordable housing obligation, the Township should seek to provide opportunities for affordable housing that do not involve rezoning for new high density inclusionary housing and the extension of sewer infrastructure to serve such housing.

housing options and

COAH Requirements

The Township has a remaining obligation equaling four units: a one-unit rehabilitation component and a three-unit new construction component. COAH rules provide a number of options in planning for the remainder of the needed housing including accessory apartments, transferring units to another community via a regional contribution agreement (RCA), rehabilitation, entering into agreements to provide one or more group homes, and zoning for inclusionary housing subject to compliance with the State Development and Redevelopment Plan. Requirements for rental housing and limitations on senior citizens housing must also be taken into account in any plan.

Pursuant to COAH rules, each community must plan so that 25% of its inclusionary component could be constructed as rental housing. Two options are available for calculating the rental requirement pursuant to NJAC 5:93-5.14(a). Based on the corrected calculated need as provided for in NJAC 5:93-3.1(b), the rental requirement is zero as shown in the following table. Rental Requirement

Communities are also encouraged to plan for the housing needs of senior citizens. However, the number of units which may be specifically reserved for senior citizens is limited to 25% of the obligation in accordance with the formula specified in NJAC 5:93-5.13(a)1. In accordance with this formula, the remaining three new units could be reserved for senior citizens. Senior Citizens Housing

FAIR SHARE PLAN

The Fair Share Plan is, in essence, a recommendation by the Planning Board to the Township Committee as to how the Township should fulfill the fair share obligation. The Planning Board adopts the plan as part of the Housing Element. The Township Committee endorses the plan and petitions COAH for Substantive Certification. Once certification is granted by COAH, the Township Committee must enact municipal ordinances and take any other action necessary to implement the plan. Subsequently, COAH monitors the Township's compliance with the plan and ordinances on at least an annual basis.

Every community must address the indigenous need (rehabilitation) component of its fair share obligation either by zoning for new construction or by operating a local rehabilitation program to enable lower income households to borrow funds to repair their homes. The rehabilitation component is one unit. If a community chooses to provide opportunities for rehabilitation, COAH's rules require that the municipality provide funding to cover the program's cost in the amount of $10,000 per unit. Of this amount, $8,000 must be made available to cover the "hard" costs of rehabilitation with the remaining $2,000 to cover the costs of administering the program. The Morris County Department of Community Development agreed to provide full funding for one unit of rehabilitation in the Township to fulfill the Township’s rehabilitation component.

The Planning Board considered all of the various options available under COAH rules to satisfy the remaining three-unit new construction component. Any compliance method should take into account and balance the fiscal and land use planning implications of any plan on the Township. Under the Fair Housing Act and the implementing rules of COAH, every municipality has the option to transfer a portion of its obligation to another willing receiving community within its housing region. Up to 50% of the total pre-credited need (half of 42 units) may be transferred under what is known as a Regional Contribution Agreement (RCA). Therefore, the Township is permitted to transfer all three remaining units to another community within the COAH-designated region consisting of Warren, Morris, Essex and Union Counties. Under a RCA the sending community must pay the receiving community the sum of at least $20,000 per unit. The funds are to be used for the rehabilitation or construction of affordable housing within the receiving community. The 1997 plan proposed fulfilling the remaining three unit obligation via a transfer of the obligation to the City of Orange. By entering into a Regional Contribution Agreement, the township would avoid the need to zone for inclusionary development and expand sewer infrastructure within Planning Area 5. As a result of Substantive Certification, the Township entered into an RCA with the City of Orange, transferring $60,000 for three affordable housing credits.

Affordable housing must be subject to affordability controls required by COAH. The Township has enacted affordable housing regulations governing the 38 units of housing which were a result of the 1985 Judgment of Compliance. Those rules will continue to govern those units. The rehabilitation of owner-occupied housing under the County's program will be subject to a six-year loan agreement and mortgage. Low/Mod "Split". COAH regulations require that at least half of the affordable housing created pursuant to a Fair Share Plan be priced or rented so as to be affordable to low income households. The remainder may be priced or rented so as to be affordable to moderate income households. Low income households are those earning an income equal to 50% or less of the median income for the area, based upon family size. Moderate income households earn more than 50% but less than 80% of the area median, adjusted for household size. With respect to the local rehabilitation program operated by the Morris County Department of Community Development, no assistance will be provided to rehabilitate a unit with a household in occupancy earning more than 80% of median income. In accordance with COAH rules, at least two of the three units transferred via the RCA must be made affordable to low income households. Administration of Affordable Housing. As an outgrowth of the 1985 Compliance Plan, the Township formed an administrative entity known as the Morris S. Frank Housing Corporation to administer affordable housing being constructed in the Township. The Corporation is a nonprofit with a Board of Directors consisting of five residents including the Township Clerk. The Corporation administers the occupancy procedures for all affordable housing constructed in the Township and will administer resales over the period of affordability controls. The Morris County Department of Community Development will administer the rehabilitation of one unit under the County's Community Development Program. Income guidelines published by the US Department of Housing and Urban Development will be used since federal funds support the program. These income limits are less than COAH's and therefore will comply with the agency's regulations.

In April 1999, the Township Committee reached a settlement of Mount Laurel litigation with Dr. and Mrs. Ko. The Township agreed to rezone the R-3 portion of the property to R-1, consistent with the adjoining R-1 zoning along the Route 24 portion of the site. The rezoning and settlement conditions allow for the development of at least 18 single family detached dwellings on the 26.9-acre site owned by the Kos. The Kos agreed to pay $60,000 to fund the costs associated with the Township’s RCA. The settlement was approved by COAH in connection with the grant of Substantive Certification and the R-3 portion of the property has been rezoned to R-1.

This plan achieves the goal of compliance with the Mount Laurel mandate while avoiding the effects of additional new large scale developments which contain many market rate units in order to achieve just a few affordable units (typical inclusionary housing). The plan also avoids municipally-funded capital expenses to achieve compliance with the housing obligation. The County's funding of the rehabilitation component saves the Township $10,000 in direct capital costs. The settlement of Mount Laurel litigation provided developer funding in the amount of $60,000 to cover the costs of the RCA with the City of Orange.

The Township of Mendham is located in Planning Area 5 - Environmentally Sensitive Area of the State Development and Redevelopment Plan (SDRP) adopted by the State Planning Commission on June 12, 1992. COAH rules require that new inclusionary housing be located in Planning Areas 1 or 2, or within designated "centers." This requirement does not apply to Rehabilitation Programs. This plan also reflects credits for past housing activity (new construction) which was approved by the Superior Court prior to the adoption of the State Development and Redevelopment Plan and prior to the passage of the COAH regulation regarding SDRP consistency. The Township is required under COAH rules to maintain the zoning for all approved sites, consistent with the developer's rights under the 1985 Judgment of Repose and current zoning.

Summary

This Housing Element and Fair Share Plan serves as the vehicle for the Township's compliance with the Mount Laurel mandate. It has been implemented consistent with state housing and planning policies, providing a realistic opportunity for the construction and/or rehabilitation of affordable housing in accordance with the Fair Housing Act.

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