Testimony on the Fiscal Year 2016 State Budget
Presented to the Assembly Budget Committee
March 18, 2015
The Housing and Community Development Network of New Jersey (the Network) is the statewide association of more than 250 housing and community development corporations, individuals and other organizations that support the creation of housing and economic opportunities for low- and moderate-income New Jerseyans. Our members are on the front lines in our communities, working with people to help them make their neighborhoods and their lives better.
We need to start investing in New Jersey by creating more homes that the State’s residents can afford and revitalizing neighborhoods in our lower income communities. We also need to maintain the safety net for people who have met difficult times in their lives. We applaud Governor Christie’s fiscal year 2016 budget for dedicating $2 million to provide housing vouchers to approximately 200 individuals receiving support services through the Division of Developmental Disabilities. It is critical to provide more appropriate housing choices for this vulnerable population and while providing the supportive housing services they need in order to live independently.
More must done to provide homes that NJ residents can afford. We must stop the practice, which we have seen over the past six years and use the money in the NJ Affordable Housing Trust Fund, to help increase housing opportunities in New Jersey. As Hurricane Sandy has brought to light, there is a lack of housing in our state that is affordable to working people, the elderly and people with special needs. According to the most recent Out of Reach Report from the National Low Income Housing Coalition, a person needs to earn over $51,000/year in order to afford a modest two bedroom apartment. At the mean wage, of $16.34/hour an individual would have to work 61 hours a week to afford a two-bedroom apartment at fair market rent (FMR).At minimum wage, $8.25 an hour, a New Jersey worker would have to work 121 hours a week to afford a two-bedroom at FMR!
Our leaders must use the NJ Affordable Housing Trust Fund, whose revenues come from a portion of the realty transfer fee, to help the private sector – both for-profit and non-profit - build and rehabilitate housing people at these incomes can afford. This was the intention of this fund when it was first created by the Legislature. Creating new homes will act as an economic stimulus increasing tax revenue by creating construction jobs and jobs in allied professions.
Special Needs Housing will also save money. Housing people with disabilities is less expensive than costly institutions. Housing people who are homeless is less expensive than costly emergency services. Housing the elderly in their own home is less expensive than having them live in assisted living or a nursing home. At least half of the $42 million that is projected to be collected by the Trust Fund should go to creating the homes our residents need, which will also help NJ’s economy.
We support the continuation of funding for the State Rental Assistance Program (SRAP) in the governor’s proposed budget. This program currently helps 4,000 New Jersey residents live in a home they can afford and avoid homelessness. However, the number of available SRAP vouchers has been declining due to under-investment even while the need has increased. This program is critical to address the housing needs of extremely low-income individuals and individuals with disabilities so that they can afford a home. SRAP must be funded to a level that will provide the full 5,000 vouchers funded in FY11, and it must be funded from either from the General Fund or from a dedicated fund other than the Affordable Housing Trust Fund, as these resources are needed to provide capital funding to develop more homes that are affordable. We propose$30 million increased funding for SRAP to come from general revenues in order free up for housing production and fund an additional 1,000 vouchers so we get make to the level of vouchers we had in FY’11.
We know that housing production and community development are a tremendous investment in our state’s ability to create jobs and improve our tax base. According to a recently released report by my organization, Community Development Corporations (CDCs) make New Jersey’s economy stronger. In the past twenty-five years, New Jersey CDCs created 82,000 jobs; added $12 billion of economic impact; and generated $320 million in state tax revenues. CDCs have achieved this multi-billion dollar impact while working every day to improve and revitalize the state’s low and moderate-income people and communities. I have provided you with a copy of the report along with my testimony
You can increase this positive impact on the state’s economy by also increasing the Neighborhood Revitalization Tax Credit Program (NRTC). Since its inception in 2002, the Neighborhood Revitalization Tax Credit (NRTC) program has become one of the most successful public/private programs furthering community development and neighborhood change in New Jersey. The NRTC was designed by the Housing and Community Development Network of New Jersey (the Network), authorized by the New Jersey Legislature in 2002, and is administered by the state Department of Community Affairs (DCA). The program offers business entities who invest in the revitalization of eligible low- and moderate-income neighborhoods a 100 percent tax credit against various state taxes. Program-wide, a total of $10 million per year is available in tax credits, with a maximum of $1 million available per neighborhood.
We did a survey in 2012 that revealed that the NRTC has been a powerful tool for leveraging critical resources for the revitalization of many of New Jersey’s older communities. In fact, for every dollar in NRTC investment, $7.30 in additional resources has been leveraged. 60 percent of program funds must be spent on housing and economic development, while the remaining forty percent can be used for“ complementary activities.” This flexibility has resulted in an array of broader economic and community outcomes. These include the creation of 265 for-sale homes and more than 1,000 rental units, the generation of nearly $4 million in property taxes, and the creation of more than 800 jobs, with another 400 expected from pending projects. We propose that this tax credit program be increased to $30 million a year.
We know this budget year is extremely difficult, and we very much appreciate the hard choices that are before this Committee and the entire Legislature. We encourage you to see this crisis as more than just a dangerous time – but also as an opportunity to reinvigorate our communities with housing choices and economic improvements, that will ultimately enhance the quality of life for all New Jersey residents. These are investments that can and do work.