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January  20

Attention Developers: Montclair Is Charging Admission

We’re calling it the IZO factor…(Inclusionary Zoning Ordinance), and it’s meant to preserve Montclair’s character and economic diversity. The Montclair Housing Commission (MHC) and the Town Council agree that developers need to build more affordable housing or cough up a hefty cash payment, reports the Montclair Times.  The IZO initiative, to be voted on January 31, would take effect February 22, not affecting the 321 building permits that have already been approved.

What the town and MHC can’t agree on is exactly how high the price of admission will be. The MHC favors the requirement to provide one unit of income-controlled housing for every seven built.  The town thinks it's too tough on developers, and favors a ratio of one in nine. (That’s a little bit less diversity.)

“There is a concern that coming up with something so draconian to developers would deter construction here, which is what lowered our taxes last year,” said Freier. “I entirely support the IZO, but it is hard to mark judgement of if it should be one in 10, one in nine, or one in eight.”

And what if the builders don’t can’t comply with the housing requirement?  They’ll be slapped with a $350,000, no $250,00, well – some kind of a payment to the town. (Hey, where’s that money goin', to pay the water bill?)

Then there’s disagreement on income eligibility for would-be tenants: MHC wants to raise the bar to 120 per cent of Montclair’s median income ($80,300 for a family of four), to give municipal workers access to the good deals. The town wants to set the limit at 80 per cent. (That’s a little bit more diversity.)

“The 120s — a percentage of professionals like teachers who can’t afford to buy here — are not the people being displaced from Montclair,” 3rd Ward Councilman Jerald Freier said. “They are the people renting apartments because they are more affordable than ever. We are losing the people making $30,000 and $40,000. It’s not that we don’t care about the 120 percent. It’s that [the IZO should be for] those who make less.”

They’re going to have to work it out by January 31 at the township council meeting, says Mayor Ed Remsen, when residents are invited to add their two cents to the builders’ bill.

January 20, 2006 in Current Affairs | Permalink

Comments

80 percent for more diversity, 120 percent "so municipal workers can afford it." (Why not just cut their salaries? Just kidding.) The point is, this kind of social engineering looks like a big can of worms to me, and frankly way beyond the competence of our local officials to handle.

Okay, ROC, here's what I'd like you to do (by your leave of course). Put aside your political soapbox for a few minutes, and tell us, in your endearingly obsessive and wonky but intelligent insightful and entertaining way, why this plan won't work. And come up with something simpler that would achieve the desired ends. (Yes, you have to pretend for a minute that the ends are worthy.)

Posted by: walleroo | Jan 20, 2006 10:44:00 AM

First we have to start with Councilman Frier's ridiculous statement. "We are losing the people making $30,000 and $40,000." Oh? And suppose we give them a house for free. Can someone making $30,000 a year spend $10,00 on property tax?

I doubt it will work walleroo because usually artificially controlled marketplaces fall apart. Someone builds a house to sell in order to turn a profit (I know that concept will make the skin of some crawl). But it is a fact. If you place too high a tax burden on development (and this is a tax) they may just stop building here at all. How does no construction increase economic diversity?

I think economic diversity is a worthy goal, I just don't see how government can (or should) force its achievement.

For me this issue turns on basic fairness. If the town citizens think we should have, say, a crack-on-staff-arborist-squad to protect us from the leafy menace, shouldn't we all pay for it? We would all benefit, so shouldn't we all share in the cost? While taxing only the people who post on the internet with "roo" in their names might produce the desired funding (if we taxed them enough), would it be fair?

If a developer will have to pay additional taxes (0r fees) or build reduced cost housing, with reduced profit margin, what do you think he will do? He will either decide he could make more money elsewhere and not build here, or he will price the fees *into* the cost of the "regular priced" housing he is building. In other words the cost will be passed along to the purchaser of the now more expensive "regular" home. So what you have, in effect, is a tax on the newcomer.

(rising on to soapbox)

Now this is precisely why any good progressive would love this plan. Someone *else* has to pay for it. The desires of Progressivism cannot withstand the cost without the "other" who can be forced to pay.

Posted by: Right of Center™ (8T) | Jan 20, 2006 11:11:49 AM

Besides all that, don't you find it unseemly for the city fathers to be deciding who shall be "worthy enough" of this "benefit" we are making someone *else* pay for?

Do you know the joke:

"A conservative local businessman and his liberal friend are walking along when they are met by a homeless man asking for help. The conservative tells him to come around his store in the morning and he'll hire him to sweep the sidewalk. The liberal says "I'll do even better than that in order to help this poor man." The liberal then reaches into the coat of his conservative friend, removes his wallet and hands the homeless man $20."

Posted by: Right of Center™ (8T) | Jan 20, 2006 11:22:18 AM

Well, HE's is losing the people who make 30-40K a year. And so is anyone on the council who counts on that voting block. And if he wants to keep those people, I'd suggest that he takes a look at the "apartment" conditions that exist in Montclair. Most notably, those who rent to tennants, rahter than the renters.

Posted by: MyManMisterC (#before9,letter after s) | Jan 20, 2006 11:23:28 AM

Very good, ROC, and thank you. Good critique, but you haven't come up with a simpler and more effective plan.

This is certainly a tax. I don't agree that it will necessarily be passed along to the home buyer, though. When you're selling a house, you charge what the market will bear, not cost plus profit. Anyway, that's a side issue.

Wouldn't it be fairer for the town to raise some kind of "diversity fund"-- either by taxing all of us or by some combination of grants and taxes and bonds and so forth (you can see I'm not a financial whiz)--and then building the "diversity houses" directly? Assuming, of course, that the majority of the town would agree to pay a tax to improve diversity. Would you be in favor of this approach, ROC, given that it would be more honest--the costs would be plain for all to see?

Posted by: walleroo | Jan 20, 2006 11:39:01 AM

"Can someone making $30,000 a year spend $10,000 on property tax?"


In a word: Yes.

Posted by: Butch | Jan 20, 2006 11:40:14 AM

Another solution, walleroo, is to do what they do often in Clifton (but which some poster a week or so ago cited as a reason he left Clifton). Meaning get really, really diverse, filling one's domicile (however small, too) with as large an extended family as possible,no matter which ones have green cards and which don't. I call this one the "Corrado's syndrome," but it will entail local merchants stocking 25 lb. bags of farro and wheels of Jordanian cheese 2 feet in diameter.

Would this one play in Montclair, especially in its school system? Well, it would get, most likely, the people really making $30-40,000 a year (and less). It would certainly attract new people to Montclair, most of whom probably wouldn't be teachers.

What say thee to this approach, walleroo? Would what plays in Passaic County (relatively well, in some ways) work in your own neighborhood?

Posted by: cathar (8T) | Jan 20, 2006 11:42:12 AM

Hell no. In truth, I probably woudn't be in favor of a "diversity tax" either. I'm not proud of that fact, however, but I endeavor to be honest (at least when posting anonymously).

Posted by: walleroo | Jan 20, 2006 11:46:39 AM

I think that plan would be more honest and fair. I have no doubt that the progressive citizens of Montclair would reject this approach. Much progressivism stops dead in its tracks at the clasp of the wallet. It is all a good idea as long as *I* don't have to pay for it. While I think economic diversity is a good thing, I don't think it can or should be engineered by anyone. So I feel no compulsion to have a "plan".

I suppose if one were serioius about true economic diversity we'd consider *lower* restrictions on construction and *loosening* codes and allowing some ugly but cheap housing to be built. It is a basic precept of capitalism that you can make money by having a large profit margin on a few items or a much smaller margin on lots and lots of less expensive items. So really cheap housing will probably be ugly. (it is the way with most things).

But Volvo-Liberalism doesn't work that way, really. Its devotees just want the "feeling" that they are doing something about "economic diversity". I am sure there is still much interest in keeping the real riff-raff out. We musn't be like Bloomfield, after all!

Posted by: Right of Center™ (8T) | Jan 20, 2006 11:47:27 AM

Does anyone have any idea how many low-income houses Montclair should build? In other words, if we were to impose a "diversity tax" to make Montclair "more diverse," how many houses for the $40k and under crowd would be want to build? And once we know that, it would be relatively easy to figure out how much it would cost. Can anybody who knows something about the subject (as distinct from, say, me) tell us?

Posted by: walleroo | Jan 20, 2006 11:49:25 AM

"...ugly but cheap housing."

As opposed to the ugly but expensive housing that's going up right now?

Posted by: Miss Martta (8T) | Jan 20, 2006 11:50:04 AM

and now for some artistic "diversity" (video)

Posted by: Right of Center™ (8T) | Jan 20, 2006 11:52:43 AM

I agree that there's a fundamental dishonesty to this approach. I have no love for developers -- I've known many, rather intimately in fact -- and they're generally not my cup of meat. But to tell them they have to build one low-income house for every 7 or 9 for-profit houses is ridiculous--unfair, but also it's got to be ultimately ineffective and a waste.

It's really a way for well-meaning but soft-headed people to pass the buck. It's a feel-good clause.

Posted by: walleroo | Jan 20, 2006 11:56:22 AM

That video made me dizzy, ROC!

I'm with Walleroo on this on one. I, too, have no love for most developers (no surprise there) but I'm not sure government-regulated diversity is the answer.

And, no, I don't think think "low-income" has to mean "ugly." Developers are supposed to be creative folks, no? Then they can find a creative solution to the problem.

Posted by: Miss Martta (8T) | Jan 20, 2006 12:00:29 PM

ok, what is this (8T) stuff?

Posted by: lasermike026 | Jan 20, 2006 12:03:27 PM

High school redux.

Posted by: Buffy | Jan 20, 2006 12:10:06 PM

Developers aren't ever quite that creative, Miss Martta (save when it comes to putting as much on a parcel as possible). But maybe they simply haven't been forced to be yet. If they are to be thusly forced, I'd suspect it'll all start in Montclair. With more laws. And the cost of enforcers for them. What a lovely path.

And in a rare moment of empathy with butch, those property taxes she seems to refer to paying above must have proven a true killer. Which in turn reduced her ability to enjoy much of the "diversity" Montclair prides itself on. Which even I can't quite think is how the system is supposed to work for any of us.

Posted by: cathar (8T) | Jan 20, 2006 12:11:32 PM

I wish somebody who disagrees--and there must be legions of them--would speak up and make an argument. (All this agreeing make me uncomfortable.) I truly would like to know: how many low-income houses does Mtc need to restore diversity? And what would they cost?

Posted by: walleroo | Jan 20, 2006 12:14:09 PM

I HAVE seen attractive, low-income properties, Cathar, albeit not in NJ. It's amazing when you travel around the country and you see what friends and family are paying for homes/condos in say, PA, W.Va., OR, TX....they get so much more bang for their bucks, in the way of newer, more spacious abodes. Some even come fully stocked appliances and offer amenities such as swimming pools. For a half or a third of what you pay here. It makes me go ballistic!

Posted by: Miss Martta (8T) | Jan 20, 2006 12:16:03 PM

This is an interesting thread.

On topic - maybe this plan is meant to slow down residential development and bring in more commercial development which would have a positive impact on property taxes and not bring additional students into the crowded school system.

Off topic – There is a demographic in town that I call the Threadbares. There are families in town who struggle with money, yet live in the big house, drive the luxury car, wear the labels, etc. I even know a family who joined a country club before furnishing most of their home (and it stayed unfurnished). I’m not posting this to be mean, but to point out that there is an economic rift aka diversity, but it isn’t obvious and it’s been around a long time, and providing affordable housing wouldn’t help because that’s admitting to the word affordable and thus destroying a crafted image.

Posted by: hrhppg | Jan 20, 2006 12:35:47 PM

It's not me you have to convince, Miss Martta (though you have), but the "Plofkerian class" of developers out there.

Walleroo, I do have a suggestion for your own dilemma, based, in fact, on your frequent suggestions (pleas for help? cries of self-pity? Iceman is much more likable here) that you are in job peril: Move. Move somewhere that is more diverse, where the housing stock and the ehtnic foods alike are a whole lot cheaper. That you will be able to afford to in your soon-to-be-straitened circumstances. That will also help quiet your cricket-like conscience. Does your own guilty wallow in diversity of necessity have to be in Baristaville

Yes? No? Have you ever seen that Joe Pesci movie "The Super?"

Posted by: cathar (8T) | Jan 20, 2006 12:37:03 PM

Everone is assuming here that building more modest housing--smaller footprints and square footage, fewer baths, nix the passe granite counter tops--would be unprofiitable. The largest number of buyers is in the under 500K market. I look at the new development in town with its "Luxury" labels and high price points (often ugly, always squeezed) and say--who's going to buy that? Its a much smaller pool of buyers at 900k and up. And they have a greater selection of properties. I think it is important that the teachers, firemen, shop keepers, etc. that work here can also buy a house here--nothing fancy, just a nice sensible little house/condo. So, I think having incentives or dis-incentives in place to encourage developers to get over this "luxury-crap" = big bucks mindframe is a good thing.

The trouble with formulas, etc. is that the term "affordable housing" is fluid. Some people think it means housing for the working poor (or unemployed) and others think it means housing for regular folks. I vote for encouraging housing for regular folks, because otherwise we get a subsidized low end and a richer and richer high end.

I don't think you make developers build cheap units, but perhaps a luxury housing tax that might tip the scales of profitability toward more modest housing or to be used in a public housing fund for town development. Municipalities have always found ways to influence development--this is nothing new.

Posted by: cheaplazymom | Jan 20, 2006 12:38:48 PM

Hrhppg: You hit the nail on the head with the Threadbares comment.

Years ago, I was invited to a co-worker's home in prestigious Short Hills. It was a beautiful home, no doubt, but her dining room table was a card table and her living room furniture...well, let's just say that it would probably have been rejected by Goodwill!

But, she always looked like a million bucks with her fancy clothes and Mercedes.

Posted by: Miss Martta (8T) | Jan 20, 2006 12:42:51 PM

Cheaplazy, If you believe in incentives then why should't *you* pay for them? Why should cost of the "social policy" of the town not be paid for by all? Raise the property tax 1% (or whatever) and give that money in the form of grants to middle income people.

Personally I think that is a missguided use of government, but it would be honest.

Personally, I think the granite or not counters in the kitchen should be up to the builder and buyer not at the "dis-incentive-ized" will of the townsfolk. But that is me.

If you think there is money to be made in constructing low cost housing, then by all means go for it.

MM, I'd be willing to bet that all those places where you get "more bang for your buck" have lower taxes and less governmental interference in development.

Posted by: Right of Center™ (8T) | Jan 20, 2006 12:53:43 PM

What percentages of different races and ethnicities would finally be considered as "diversity"? Sounds awkward, forgive me. Who decides when Montclair has restored diversity? What's the racial/ethnic make up "supposed" to be before such a label can be accurately applied?


I am sure there is still much interest in keeping the real riff-raff out. We musn't be like Bloomfield, after all!

Harrummmppphhh!

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