N.J. launches post-Sandy rental housing fund

Posted: June 29, 2013

With rental housing in short supply in much of New Jersey post-Sandy, the Christie administration announced the creation of a $10 million fund aimed at helping nonprofit developers build affordable rental housing.

The fund will be supported by federal Community Development Block Grant Disaster Recovery funds and will cover predevelopment costs associated with properties currently deemed unsafe, underused, or in foreclosure.

Eligible uses of predevelopment loans include project feasibility studies, environmental studies, engineering studies, architectural fees, legal fees, site preparation, and other soft costs.

Gov. Christie has been criticized by community housing advocates for focusing most of his Sandy recovery attention on homeowners and businesses. In recent weeks, the administration has rolled out several programs aimed at incentivizing landlords and jump-starting affordable developments.

The Department of Community Affairs (DCA) said the funds are part of $379 million in federal money aimed at replenishing the stock of rental housing left uninhabitable by the storm, and providing affordable housing for residents.

A $179 million fund was established to provide loans aimed at rebuilding multifamily rental and public housing units. And a small rental unit fund that offers landlords grants of up to $50,000 was also rolled out.

The money is part of $1.8 billion in Sandy aid provided to the state by the U.S. Department of Housing and Urban Development.

"Superstorm Sandy was an additional blow to the economic vitality of a number of already hard-hit communities," Community Affairs Commissioner Richard E. Constable III, who also chairs the New Jersey Redevelopment Authority (NJRA) board, said in a statement. "With the Predevelopment Fund for Affordable Rental Housing, [the authority] will be able to create up to 1,000 new units of affordable housing for New Jersey families over the next two years."

Constable said the goal was for these projects to have a ripple effect in hard-hit communities where the supply of affordable housing has been extremely tight post-Sandy. Last month, the DCA launched a $780 million aid program aimed at homeowners.

Staci Berger of the Housing and Community Development Network of NJ, an advocacy group, said the predevelopment money for nonprofits is welcome especially since a similar fund that provided grants, not loans, was eliminated from the state budget two years ago by Christie.

"We still maintain that the first $1.6 billion is overly weighted toward homeowners and doesn't give enough to create a production pipeline to create new rental units that we know are needed," Berger said.

Adam Gordon of the Fair Share Housing Center in Cherry Hill said he thinks the guidelines are too broad to ensure that the money will target the communities most affected by Sandy. The loans are limited to the nine most impacted counties - Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union - but not to specific cities or communities.

"Certainly it's important to have predevelopment money because that's the seed capital that allows homes to be built," he said. "The fact is, 40,000 houses are just not back."

Berger and Gordon questioned the fairness of the $10,000 grants that are being offered to homeowners, but not to renters, as incentive to stay in their communities for several years. Berger suggested those funds might be better used for housing counselors for renters and homeowners alike.

The low-interest loans will be available through the NJRA for nonprofit developers to cover predevelopment costs incurred on or after Oct. 30, 2012.

The loans will be for up to three years and between $100,000 and $500,000. Projects must provide affordable rental housing units.

The NJRA is accepting applications for the Predevelopment Fund for Affordable Rental Housing. Nonprofit developers can view the program guidelines and the application online at http://www.njra.us/njra/site/default.asp.Developers can call 609-292-3739 for additional information.


Contact Amy S. Rosenberg at 609-823-0453 or arosenberg@phillynews.com. Follow on twitter @amysrosenberg.

 

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