The Senate voted 22-14 today to amend 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.
By voting to concur with recommendations made by Gov. Jon S. Corzine in his conditional veto message, the Senate agreed to the Governor’s changes and amended the bill, which is now in position for a vote by the Senate. If approved, it will then have to be approved by the Assembly before being sent to the Governor for his signature.
Under the terms of the bill (S-2577), for a developer to be eligible for conversion they would have to set aside 20 percent of the units for affordable housing.
“The nationwide slowdown in our housing markets is especially evident in New Jersey’s age-restricted housing market,” Sen. Sarlo said. 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.
“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,” Sen. Sarlo said.
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 municipality’s 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.”
In his conditional veto message, the Governor recommended that in order for a development to be converted from age-restricted to non age-restricted, the developer of the age-restricted development must agree that a minimum of 20 percent of the units in the development will be provided as affordable units. The Senate bill originally required only that the developer provide an amount not to exceed 20 percent.
The Governor also inserted language to provide that if the approving board determines that the requirements of the bill have been satisfied and the conversion can be granted without substantial detriment to the public good and will not substantially impair the intent and purpose of the zone plan and zoning ordinance, the application for the conversion would be approved.
The Governor’s final recommendation modifies the appeal process within the bill, so the court would consider the reasonableness of the decision, rather than whether or not the criteria within the bill has been satisfied.