TRENTON – A bill sponsored by Sen. Paul Sarlo (D-Bergen) that would permit developers to convert age-restricted units to non-age-restricted units as long as they set aside a portion of them for affordable housing was approved 21-14 today by the full Senate.
Under the terms of the bill (S-2577), for a developer to be eligible for conversion they would have to set aside a percentage of the units in the development, not to exceed 20 percent, for the provision of affordable housing.
“The nationwide economic slowdown is really being felt in our housing markets,” Sen. Sarlo said. “It is especially evident in New Jersey’s age-restricted housing market. These kinds of developments were thriving just a few years ago, and builders continued to plan for them to satisfy the demand. But a number of senior housing communities that have been built remain vacant today, and still more are approved for construction but have not yet been built.”
Real estate experts say demand is far less than what had been projected, in large part because seniors are leaving for cheaper locations. Baby Boomers who were expected to “trade down” into smaller, age-restricted are also deciding to stay put. Many are unable to sell their homes, or are keeping them as adult children and their families move back in.
“That leaves the state’s vast amount of age-restricted housing in limbo,” Sarlo said. “People in real estate now believe there is already enough age-restricted housing built or in the pipeline to handle the lower demand for up to 20 years.”
The bill says if a developer converts an age-restricted project to non-age restricted, the units that are set aside for affordable housing would count toward a municipalities affordable housing obligation. But the market rate units in the development would not generate any additional growth share obligation under the Fair Housing Act.
“Recent studies are showing that as Americans get older they are less mobile than previously anticipated,” Sarlo said. “Adding to the problem is the fact that a large segment of the target market for age-restricted housing is older Baby Boomers, who tend to live in more expensive homes. Those homes are part of the weakest price range in the New Jersey housing market.”
The bill now goes to the Assembly for consideration.