TRENTON – A bill (S-2485) sponsored by Sen. Raymond J. Lesniak (D-Union) that would exempt certain non-residential development projects from a 2.5 percent fee to fund affordable housing was approved 12-0 today by the Senate Budget and Appropriations Committee.
Current law imposes a 2.5 percent non-residential development fee on certain projects to provide funding for the construction of affordable housing. The bill would exempt projects from the fee through July 2010.
“The 2.5% tax is an impediment to our economic recovery,” Senator Lesniak said. “Increasing costs of development to pay for affordable housing, based on the number of jobs created, damages job creation and is a disincentive to investment in our economy.”
Senator Lesniak noted Governor Corzine called for the deferral of this fee in his 2009 State of the State message to the Legislature, and the Office of Economic Growth supports the bill.
“I’ve been saying for a year that we are at a crossroads,” Senator Lesniak said. “We are no longer at a crossroads, we are at a tipping point. If we don’t take bold action, our economy will tip over and never recover.”
Lesniak said the developers’ fee needs to be suspended during the economic downturn to ensure New Jersey gets back on track in creating jobs and growing the economy.
“The developers’ fee was a legitimate effort to balance economic development, job creation and affordable housing,” Lesniak said. “It will achieve none of those goals. It needs to be suspended until economic conditions improve.
“Our goal is to provide for the affordable housing needs of our residents in an environmentally sound manner using well-established principals of smart growth and smart planning without damaging economic growth and job creation, which not only hurts all our residents, but also impedes the development of affordable housing as well,” Lesniak said. “This bill is a big step toward achieving that goal.”
The bill had previously been approved by the Senate Economic Growth Committee and now goes to the full Senate for consideration.