Breathing Life Into Age-Restricted HousingMarch 22, 2010 – Articles New Jersey Law Journal
Last summer, former Governor Jon Corzine signed into law the “Age Restricted Conversion Bill” (N.J.S.A. 45:22A-46.3) in an attempt to reduce the existing overstock of age-restricted housing and increase the potential stock of affordably priced workforce housing. The conversion bill creates a mechanism for developers of approved age-restricted projects to convert these projects into developments with no age restriction. In exchange for the conversion, the bill requires the developer to set aside 20 percent of the units in the converted development as affordable housing units in accordance with the Council on Affordable Housing (“COAH”) regulations. The bill was intended to spur economic activity by allowing residential developers to reduce the oversaturated inventory of age-restricted housing while simultaneously providing municipalities with a tool to address their affordable housing obligation.
Although the bill was championed by many real estate development lobbying groups, it faced strong opposition from municipalities across the state. The municipalities argued that the bill’s passage usurped local planning power and would ultimately result in an influx of school-age children and corresponding demands on already limited resources. In spite of this opposition, the conversion bill was passed. This article discusses the key components of the conversion bill and the effect that the bill has had on New Jersey’s residential real estate market. The article also explores the implications of providing COAH housing as part of the converted development, particularly in light of the uncertainty associated with COAH Third Round regulations.