Measure Would Address Foreclosure Crisis in New Jersey, Provide Credit to Municipalities Which Transition Foreclosed Property to Affordable Housing
TRENTON – At a news conference at the Statehouse today, Senator Raymond J. Lesniak announced the introduction of legislation sponsored by himself and Senator Barbara Buono which would begin to address the foreclosure and affordable housing crises facing New Jersey.
“Vacant and boarded up homes are a blight on neighborhoods, an invitation to vandalism and crime and a drag on property values and our economic recovery,” said Senator Lesniak, D-Union. “Families evicted from these homes still need affordable places to live. Federal Reserve Chairman Ben Bernanke stated the overhang of foreclosed properties is contributing to the slow rate of expansion of our economy, places downward pressure on housing prices and exacerbates the loss in housing wealth. S-1566 is designed to address these problems in New Jersey.”
“What this bill does is it ensures that we’re using our State’s affordable housing investment to help clean up our blighted communities and put foreclosed properties back to good use,” said Senator Buono, D-Middlesex. “It’s a novel approach to not only boost the affordable housing stock available to low- and moderate-income families, but also to reclaim abandoned, dilapidated homes which are a strain on our neighborhoods. I’m proud to work with Senator Lesniak on this issue so that we can give our local officials the support they need to redevelop blighted communities and ensure that they’re meeting their affordable housing obligations.”
The bill, S-1566, would establish a central agency under the New Jersey Housing and Mortgage Finance Agency (HMFA) to use funds from the State Affordable Housing Trust Fund to purchase and deed-restrict foreclosed properties to be used as affordable housing. The bill would also create incentives for municipalities to transition foreclosed properties to affordable housing, giving them a 2-to-1 match against their affordable housing obligation for affordable units created from foreclosed properties. Senator Lesniak said the bill could result in 10,000 new affordable units and 10,000 less unoccupied, boarded-up properties.
The bill is supported by the New Jersey Bankers Association, the New Jersey Realtors Association, the New Jersey Builders Association, and the New Jersey League of Municipalities.
“As New Jersey continues to pull itself up from the quagmire of economic crisis, we need to ensure that there our housing opportunities available to people of all income brackets,” said Senator Buono. “At the same time, we need to ensure that municipal officials have the tools they need to deal with the many foreclosed properties within their borders. This bill addresses both problems, and does so without contributing to overdevelopment and sprawl which already have a negative impact on the quality of life in the Garden State.”
“I am looking forward to working with Senators Lesniak and Buono to create new affordable homes and improve neighborhoods by converting boarded up foreclosed homes into owner occupied residences,” said Assembly Jerry Green, D-Union, Middlesex and Somerset, the sponsor of the Assembly version of Senator Lesniak’s bill, and Chair of the Assembly Housing and Local Government Committee.
“There are tens of thousands of vacant foreclosed homes in New Jersey with many more being added every day,” said Senator Lesniak. “They exist in every municipality in the state. S-1566 will provide the mechanism for municipalities and the state to convert vacant foreclosed homes into occupied affordable housing for our residents of low, moderate and middle class incomes.”
The bill is scheduled for consideration on Thursday before the Senate Economic Growth Committee, which Senator Lesniak chairs.
Click here to read the press packet from Senator Lesniak’s news conference.