Rich NJ city turns down affordable housing development to build pricey apartments

An affluent New Jersey city rejects proposal for all-affordable housing development

An affluent New Jersey city has rejected community members’ proposal for an all-affordable housing development in its downtown and instead plans on selling the large piece of land to the highest bidder for market-rate units.

Summit, where the average home is valued at nearly $1.2 million, is operating under an agreement with the state to “make all reasonable efforts” to develop 50 affordable units by June 2025, under a state law requiring every municipality to build its “fair share” of affordable housing. But so far, the city has identified spots where 25 affordable units could be built, and just 16 have been built. Community members proposing a 42-unit, 100% affordable development at a city-owned site currently occupied by a firehouse that is being relocated hoped the plan would make up the difference.

Rejection raises questions about meeting state-mandated affordable housing obligation

The decision also raises questions about whether Summit will meet the state-mandated affordable housing obligation. And for some residents, it’s a sign their leaders don’t value development that could welcome more people from across the economic spectrum into the community. In March, the Council’s president told lawmakers this year an affordable housing bill would lead to noise, pollution and crime, a statement she later said was misunderstood.

The city is “running out of time” to make good on its affordable housing obligations, Summit Councilman Greg Vartan said at last week’s public meeting, before casting one of the two votes against the rezoning ordinance. New Jersey assigns towns obligations for accommodating affordable housing in “rounds.” If Summit doesn’t get to 50 units before the current round ends next year, that could increase its state requirement in the next decade-long round.

Summit Mayor Elizabeth Fagan said at the meeting that the firehouse property would be sold to a developer through an “open, transparent and public bid process.”

An ‘ideal spot’ for affordable housing

Mark McBride and Dennis White each retired a few years ago. McBride had been an investment officer for TD Bank specializing in affordable housing. White, whose work focused on social and community investments for organizations, was a longtime member of the Summit’s Public Housing Authority. In 2023, an opportunity to use their experience with housing came their way.

That July, Summit city officials killed an intensely opposed large, 140-unit development plan for the firehouse site. White, a 30-year Summit resident, decided he wanted to figure out a way for the city to still generate the more than 20 units of affordable housing that the project would have included.

“The city owns it,” White said. “It’s near all the social services, transportation services, employment opportunities. So it’s an ideal spot for affordable housing.”

Summit’s real estate is largely unaffordable to lower-income families. Zillow estimates the median rent for a market-rate apartment there is $2,800, which is 38% higher than the national average. But individuals making up to about $70,000 and families making up to about $100,000 would qualify to live in affordable housing units in the city and would pay no more than 30% of their income in rent.

White and McBride came up with a proposal to use the firehouse property — about an acre of land — for a 100%-affordable development. They outlined potential public funding sources, such as the federal Low-Income Housing Tax Credit program and New Jersey Housing Mortgage Finance Agency program, that could offset development costs and make the idea more attractive to potential builders. Their plan also left over two acres available for Summit to use for something else.

McBride and White hoped to get city officials’ buy-in to pursue the idea and eventually pass the project off to a developer. As their plan came together, the pair said they spoke to some developers who expressed interest.

In January 2024, White arranged a meeting with several Summit city employees focused on housing development to pitch the project. “They were very appreciative and actually thought it was a great idea,” he said.

An ‘unforced error’

White and McBride said that after their second pitch meeting, the city went silent on them. Then in early May, they all met a third time, and White said city officials informed them they didn’t want to move forward.

White and McBride said the officials didn’t want to reopen their settlement agreement with the nonprofit group Fair Share Housing so late in the affordable housing round — a necessary step for greenlighting a new all-affordable housing developments. The officials also wanted to sell the property to a developer for the maximum amount, according to the pair. And the officials didn’t think their proposal’s plan for one parking spot per unit was adequate.

“I guess the frustrating part was there was no additional discussion,” White said.

That same month, Common Council President Allen said at a city meeting that municipal leaders would prioritize the “inclusionary” development projects, with 15% or 20% of their units allocated for affordable housing and the rest market-rate rentals

But White and McBride, citing the city’s affordable housing attorneys’ own numbers, questioned whether an inclusionary development strategy would allow Summit to meet its future obligations.

In a report, the city’s law firm estimates Summit’s formal “obligation” for the next round — a 10-year period starting next summer — at 426 affordable units, but the city will likely only be required to accommodate a fraction of that figure because little developable land is left in the city. The calculation is based on a new formula under the affordable housing bill passed earlier this year, and the state will formally make the assignments later this year.

McBride noted that New Jersey’s new affordable housing law says a largely built-out municipality like Summit will need to plan for 25% of its formal obligation, which still means developing about 100 affordable units. McBride said that if Summit focuses on inclusionary development projects with just 15% to 20% of their units slated as affordable, Summit would need to find room for about 600 units in all, including the market-rate ones. He said it’s unlikely Summit has enough room for that much development.

“It’s not going to work,” he said.

McBride called taking the firehouse land out of the equation before Summit knows for certain about its forthcoming obligations an “unforced error.”

Scalet, the pastor, told Gothamist that passing on a chance to build more affordable housing was “incredibly disappointing, incredibly frustrating, incredibly short sighted.”

“And quite honestly, [it’s] just not the right moral, ethical and community focused-vision for the kind of town that I think we want to be,” he said.

SDGs, Targets, and Indicators Analysis

1. SDGs Addressed or Connected to the Issues Highlighted in the Article

• SDG 1: No Poverty – The article discusses the need for affordable housing to address poverty and ensure access to adequate housing.
• SDG 10: Reduced Inequalities – The article highlights the issue of inequality in access to affordable housing and the resistance from local leaders.
• SDG 11: Sustainable Cities and Communities – The article focuses on the development of affordable housing in Summit and the challenges faced by the city in meeting its obligations.

2. Specific Targets Under Those SDGs Based on the Article’s Content

• SDG 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property – The article discusses the need for affordable housing to address poverty and provide equal access to housing resources.
• SDG 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, or economic or other status – The article highlights the resistance from local leaders towards affordable housing agreements, which can perpetuate inequalities.
• SDG 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums – The article focuses on the need for Summit to develop affordable housing units to meet its obligations under state law.

3. Indicators Mentioned or Implied in the Article

• Number of affordable housing units developed – The article mentions that Summit has identified spots for 25 affordable units and has built 16 units so far. This indicator can be used to measure progress towards the target of ensuring access to adequate, safe, and affordable housing.
• Percentage of market-rate units set aside for affordable rentals – The article mentions that the firehouse site will be sold to a developer for market-rate units, with a smaller portion set aside for affordable rentals. This indicator can be used to assess the inclusionary development approach and the extent of affordable housing within market-rate projects.
• Number of affordable housing obligations met by the municipality – The article discusses Summit’s obligation to develop 50 affordable units by June 2025 under state law. This indicator can be used to measure the municipality’s progress in meeting its affordable housing obligations.

Table: SDGs, Targets, and Indicators

Source: gothamist.com