The DCA Nightmare Continues: Another Round of Proposed Rules

from Fair Share Housing Center by Adam Gordon

Following last week’s injunction on the Department of Community Affairs’ (DCA) unlawful interim rules implementing Governor Christies’ Reorganization Plan involving the Council on Affordable Housing (COAH), we have learned that DCA now intends to propose yet another set of procedural rules. We have obtained copies of the rules and write now to share our analysis of them.

We note that these are the third set of rules in six weeks to come out of DCA since it took over COAH’s responsibilities. The Christie Administration promised to make the COAH system simpler, and “end the COAH nightmare.” Instead, they are creating a new DCA nightmare — a dysfunctional system with ever-changing rules that undermines the creation of homes and jobs in New Jersey and threatens both non-profit and for-profit developers of modestly priced housing. This system, with no standards, no public process, and no accountability, doesn’t work for anyone but a select few town officials who are politically connected enough to get the outcome they want out of a closed door process.

The proposed rules themselves do not explicitly acknowledge that they are intended to further Governor Christie’s political goal of dismantling the Mount Laurel doctrine, but one does not have to dig too deep to see that is the case. Most of the amendments are intended to reduce the transparency of the process while giving local officials that the administration politically favors the power to do what they want. Likewise, the rules play into the propensity of some public officials to use public funds for their own purposes.

For instance, a proposed new rule involving economic feasibility provides a process for developers looking to reduce their housing obligations to “submit a request for determination of economic feasibility to the Department in a form to be prescribed by the Commissioner.” The rule requires developers and municipalities to submit extensive information and then provides that “the Department shall make a determination on the economic feasibility of providing the required set-aside.” It is not clear what that “determination” will be based on though because there are no standards included in the proposed rules. What good is a regulation if it doesn’t tell you what the law is? DCA has claimed that its goal is to “foster greater predictability for all players in the affordable housing arena,” but a standardless rule is anything but predictable. And the absence of standards also makes the process ripe for politicking. Do friends of the Governor get a better deal? Perhaps municipalities that want to sink a development can advocate for developers to get a higher, infeasible set aside. In New Jersey, these are not just possibilities; they are probabilities.

Similarly, under the proposed rules, spending plans are not required to be approved by the governing body through a resolution, but rather can be approved upon the submission of a letter from the municipality. With hundreds of millions of dollars sitting in municipal trust funds, how could anyone think it is a good idea to authorize a single person to approve expenditures for a municipality? Why would the administration adopt such a relaxed procedure when governing bodies otherwise approve municipal budgets and municipal expenditures? In a state with as much corruption as New Jersey, this proposal is a recipe for indictments, not an effective approach to spending trust funds.

The proposed rules include numerous other changes, such as shortening the time for the public to oppose actions taken by municipal governments; eliminating the requirement for decisions to be made at public meetings and instead allowing them to be made behind closed doors whenever the DCA Commissioner desires; and welcoming waivers of regulations with the goal being to give municipalities whatever they want.

“The only thing worse than a dysfunctional COAH is Chris Christie running the show,” we told the Star-Ledger when the first of the now three versions of rules were proposed. So far, our statement has proven right. The hyper-politicization of every housing decision and ever-changing rules may work for the well-connected, but it doesn’t work for New Jersey.

The good news is that because of our court victory last week, these rules will have to go through a public notice and comment process instead of being implemented without public involvement like the last two sets of rules were. We anticipate that the rules will be published for comment on November 21, 2011. Assuming that is the case, comments will be received for 60 days, through January 20, 2011. They will thus not go into effect until February or March 2011 at the earliest.

In the meantime, our court challenge to the reorganization and the prior set of rules continues, with briefing this fall and winter and oral argument scheduled for February 15, 2012. We also expect the Supreme Court to take up the pending case on growth share and the Third Round rules sometime in the next few months. Only these court decisions will resolve the DCA nightmare that has descended on our state. We will continue to keep this list posted as we have more information on any of these developments.

For those interested in reading the proposed rules, they are available here.