Red Bank gets $2.4M for affordable housing
State DCA grant will fund purchase of west side tract
BY LAYLI WHYTE
Staff Writer

Red Bank Mayor Pasquale Menna announced this week that the state Department of Community Affairs (DCA) has approved funding for the borough's affordable housing project on Cedar Street.

At Monday's meeting of the Borough Council, Menna said that he received a phone call from DCA commissioner Susan Bass-Levin informing him that the borough would receive $2.4 million for acquisition of the 1.9-acre tract on which it plans to build affordable housing.

Menna said he expects a press conference to take place on the site that fronts Cedar, River and Catherine streets in the coming weeks.

The borough has been under contract to purchase the land since September, and has been awaiting the DCA's approval to fund the project, which, according to Menna, could bring more than 30 affordable residential units to the borough.

The grant came from the DCA Neighborhood Preservation Balanced Housing Funds program, from which the borough requested the entire sale amount of the property.

The purchase price of the land amounts to $2.45 million and the borough is purchasing the site from Cedar Street Crossing LLC., which had originally planned to build 36 residential condominium units, with only a portion, as required by law, to be built as affordable housing.

Steve Fitzpatrick, Chestnut Street, said at Monday's meeting that he was concerned the borough did not get the full funding for the property and would seemingly leave the taxpayers paying the difference of $500,000.

Menna said that the amount of the grant may change.

"The actual grant," said Menna, "is based upon the number of units that we build. There is an ongoing dialogue with the DCA regarding the number of units we will build. We had been anticipating a lower number of units. If there is a shortfall, the host municipality [Red Bank] would have to cover it, yes."

Borough Attorney Kenneth Pringle said that the rule that the state's Council on Affordable Housing (COAH) has set is that grants of this nature are based on either the appraisal of the property or the contract purchase price, whichever is lower.

"We're looking to see if we can increase our appraisal," he said.

The council passed a resolution at Monday's meeting "agreeing to incur debt for any shortfall in funding for the borough's housing element and fair share plan."

"This is a boilerplate resolution," said Menna. "We have to pass this in order to receive the funding from DCA."

Councilman John P. Curley and Councilwoman Kaye Ernst both voted against adoption of the resolution.

Curley and Ernst have both said at previous council meetings that they were against the purchase of the property for several reasons, including that they believed the price had been inflated due to the fact that the borough was purchasing the property from a contract purchaser, rather than the owner.

"I am very much in favor of affordable housing," Curley said previously. "I think it is needed in the community, but I don't think we did the best job negotiating. I don't think we should pay for property at above appraised value. I don't think that's good policy, especially in a declining market."

Affordable housing obligations are determined for every municipality by the state Council on Affordable Housing (COAH), which was formed as a result of a 1985 New Jersey Supreme Court decision that mandated all municipalities take steps to provide their fair share of low- and moderate-income housing need.

Former Mayor Edward J. McKenna Jr. said previously that the project could provide close to half of the borough's affordable housing obligation of 74 units, and with the DCA grant, the borough would not have to foot the bill.

Round one of COAH's Fair Housing Plan focused on creating reasonable opportunities for affordable housing through the municipal zoning ordinances.

The second round was focused on the rehabilitation of existing homes.

When the round-three rules were released in August 2003, they stated that for every eight new housing units built in a municipality, one unit must be considered affordable housing, and that for every 25 new jobs created by a commercial development, one affordable unit must be built.

The borough's Housing Authority is expected to manage the project.