Township of Mahwah

TOWNSHIP OF MAHWAH

HOUSING COMMISSION MEETING

Tuesday, June 18, 2013

The meeting was called to order at 7:00 PM by Chairperson, W. Savino, who read the Open Public Meetings Act Statement as prescribed by law. Notice was advertised in the Bergen Record on December 13, 2012, stating that the meeting would be held in Room 311 of the Municipal Building located at 475 Corporate Drive, Mahwah, New Jersey, on Tuesday, June 18, 2013.

Notice of the meeting is posted on the Municipal Bulletin Board and the Municipal website. The minutes of the meeting shall be available from the Township Clerk, Secretary of the Housing Commission and the Municipal website upon adoption by the Commission.

Salute to the Flag.

Present Commission Members: Mr. Donigian, Mr. Savino, Mr. Spiech, Mrs. McDonough, Mayor Laforet, Mr. Alderisio

Also present, A. Fede, Esq., Archer Greiner

J. Spiech made the motion, seconded by Mayor Laforet, to approve the minutes of the May 21, 2013, Housing Commission meeting. All in favor. Motion approved.

PUBLIC PORTION

At 7:05 PM the Commission entered into Public Session via a motion by Mr. Speich and seconded by Mr. Alderisio. The first to comment was a resident of Ridge Gardens. He inquired as to the Township’s legal rights to change his signed Contract and why the residents were not given earlier notice of the change. He asked to view the documents stating the change in the Affordable Housing controls. Mr. Fede reiterated the Township’s undertaking of sending out 500 letters to Unit owners. He explained the affordability controls and referenced N.J.A.C. 5:80- 26.20 to 5:80-26.26.

Mr. Joseph Benfield of 1259 Mulberry Drive referenced his signed Deed which states at the end of the 25-year restriction, he could sell his Unit at market value. He has upgraded his Unit with the hopes of making it a marketable Unit.

An anonymous resident read from her Deed. Mr. Spiech stressed that the Township did not create this regulation. The resident questioned the legality of the legislation.

Donna Loggia, a Thoreau Court resident feels this is “pure fraud and her dreams have been squashed.” She encouraged her fellow owners to band together and to hire an attorney.

1 Mr. Christopher Davie of 926 Juniper Way stressed that the 95/5 clause is a regulation, not law. He believes everyone on the Council and within the Township Government knew the 25 years would come, and no one addressed the issue. He feels the Township could have paid people to extend the controls. The Township does not have to invoke the 95/5 rule. He expressed there is nothing in the COAH regulations that says a town must invoke the 95/5 rule, and other towns are not considering it. Mr. Davie says this is the first time in 25 years he has received an actual notice. An annual notice is also a regulation which does not necessarily have to be enforced. He stressed the homeowners’ commitment to banding together. Mr. Fede expressed his belief the issue will be settled by a judge in the courts.

Elaine Reichel of 523 Holly Court purchased her Unit in 1988. She states she spoke to workers from time to time in the Affordable Housing Office and inquired as to what would happen when the 25-year mark was reached. She was told that the cap may never come off.

Pamela Constantine of 258 Larch Lane purchased her Unit in 1992. She claims to have telephoned Trenton and spoke to someone named Heather who told her the State did not change the rules; Mahwah changed the rules. A Deed cannot be legally changed. There is a discrepancy as to whether the rule was changed at the State level or by Mahwah. She discussed Deed vs. Master Deed.

Mayor Laforet reiterated that the 95% is not going to Mahwah but is going to the State into a Trust Fund for Mahwah.

Tom Thornton of 437 Poets Way stated he spoke to the Tax Assessor’s Office and was told that the Township Council will set the tax rate for the Units. Mr. Donigan asked Mr. Thornton if his Deed states he will follow the regulations set by COAH or the Affordable Housing plan.

A miscellaneous resident asked what the tax rate would be for the Affordable Units. Mr. Donigan expressed this would be determined by the Assessor’s office. The Affordable Housing Council does not dictate tax rates.

Kathy Erico of 935 Juniper Way stated her daughter came down to the Affordable Housing office and asked if her mother could sell at market value at the end of 25 years. She was told “yes.” No mention was made of a 95/5 provision.

A resident inquired about renting the units. Mr. Fede explained that if a unit is currently rented to an income-qualified tenant, the tenant may remain in the unit as long as they are still qualified. The tenants must be re-qualified each year. If there is no current tenant, the unit may be rented at market value once it is off restriction.

An owner of a Ridge Gardens unit expressed concern about apartments rented to tenants who are not qualified. She also states to be aware of someone selling their unit 21 years ago at market value to a non-qualified person. She would like to know how that could happen and what the Township intends to do about situations such as this.

Another resident asked what would happen to the units if the Township purchases them? Mr. Fede explained the unit would then be sold to an individual on the waiting list and be subject to another 30-year restriction. 2 Christine McGee of 1327 Mulberry stated she is under the belief that COAH disbanded. She also is aware that the controls are not set by the Master Deed but rather the Deed to each individual unit. Ms. McGee also stated that some towns have chosen not to follow the regulation and to follow the original signed contract i.e. Wayne, Ramsey, Burlington.

It was explained that Governor Christie abolished COAH, and there are pending issues as to whether COAH continues to exist. The Governor is looking to take back unused Trust Fund monies.

A resident inquired about the raising of taxes and how the Township is going to assess the affordable units. The owner believes that if he chooses to remain in his unit and not sell it, it should still remain at the restricted tax rate. Mr. Fede expressed that this meeting was not the forum to discuss the tax rate. The tax rate is the responsibility of the Tax Assessor.

An unidentified resident asked what Mahwah will be doing with the 95 percent. Mr. Fede explained that the money does not go into the general budget for the Township but rather into the Affordable Housing Trust Fund. It was explained that Trust Fund money could only be used for Affordable Housing purposes. The Township would use the money to purchase or build units. He explained the Township has committed to spend $1.2 million for the construction of new units on Ramapo Valley Road. The proposal is being held up because there is a challenge in the courts as to the spending plans and the regulations governing the spending plans. He explained Mahwah’s agreement with the United Way to build additional units.

Mr. Spiech explained the 95 percent is based on COAH’s wish to keep the program going and to allow future homeowners the opportunity to enjoy the same benefits of the program as the current owners. The concept of affordable housing is to give people a chance to live in a nice community with a good school system when they might not otherwise be able to afford to live here. Mr. Spiech explained Mahwah was one of the first towns to build affordable units. Mahwah wishes to maintain the supply to give others the same opportunity.

Tony Baldo of Thoreau Ct. stated his lawyer wants to know where it states the town has the right to change the contract. Mr. Fede stated the regulation was passed in 2004 and applies to all units regardless of when they were built. It is retroactive.

The mayor thanked Mr. Baldo for his questions. He stressed how Mahwah is trying to maintain the spirit of affordable housing and acknowledged we are currently at an unfortunate crossroads. The Township has an obligation to abide by the State directives. Mahwah is, unfortunately, one of the first towns to be facing this dilemma.

A resident asked how a signed Contract can be changed without the consent of all parties involved. Mr. Fede believes this is the question that will be presented to the Court. Mayor Laforet expressed the Council’s position of having to relay information to the public whether or not Council supports it. This will be decided by a Judge in a court of law. The State has put the Township in the position of having to enforce this regulation.

Mr. Baldo followed up with a questions pertaining to owners who chose to remain in their condos. Must the taxes and fees be increased? It was noted that maintenance fees are documents 3 between unit owners and each individual Association. The Township does not have any authority over maintenance fees once the units go off restriction.

Rich Tomporowski asked for follow up from Mr. Fede regarding a letter he was to send to each Association regarding the raising of maintenance fees. Mr. Fede replied that one development had received correspondence from him and the others will follow shortly. There has been no response to the letter at this time.

Mr. Alderisio reiterated that if Mahwah does not enforce this regulation, then COAH will come after Mahwah; and everyone in Mahwah will pay in the form of a lawsuit.

Mr. Fede recapped the Symposium of Expiring Affordability Controls which he attended with Mrs. McDonough. There were many intensive presentations including an introduction on affordable housing, an attorney who spoke on the litigations and lawsuits regarding trust funds, etc. There was a discussion about rent controls and more pending lawsuits. The second half of the day had a discussion about how towns dealt with post-expiration units. Many handouts were given. Tonight’s specific issue was not really addressed. It is an issue which has not been resolved. There will be several follow-ups as currently pending lawsuits are settled.

Janet Hill of 924 Juniper Way asked how many of the current Council Members were on the Council in 2011. She says the issue came up at a meeting in 2011. Why the wait to inform owners? If this had been discussed in 2004, we wouldn’t be dealing with this now.

Linda McCormick of 928 Juniper Way asked if Mahwah could come up with a better deal rather than go to court. Can the Advisory Board come up with a different deal such as a 50/50 split? Mr. Fede does not believe this is the case. If there is no 95/5 rule, then the Units can be sold at market value with no split in profit.

Pam Irwin of 911 Thoreau Court asked for an explanation of the DCA Resale Calculator. She wanted to understand how the percentages were calculated. Why such a drop in interest in 2010? It was explained that the interest is calculated by COAH based on fluctuations in the rate of inflation. There was a gap in presenting new numbers since 2011 due to the fact that the Governor abolished COAH. It was determined that this cannot be done, and so new numbers have since been generated.

A resident cited the Power of Eminent Domain and how it was being applied in Long Branch, NJ. She inquired whether such laws could be applied in this case.

Geraldine Kerns purchased her unit at 2118 Hawthorne Lane in 1999. It has not been 25 years for her yet. It was explained that the 25 years begins from the date the first owner took occupancy.

Diane Jones of 915 Thoreau Court feels she will be lucky to break even after paying off her mortgage based on the purchase price and the interest paid over 25 years if the 95/5 rule is enforced.

Mr. Donigian stated making a profit was not “in the spirit” of Affordable Housing. Many people are underwater on their homes. People in the Affordable Housing Program were guaranteed a 4 profit each year. He questioned why the units were not built as affordable forever, but believes it was so that down the road builders could build additional units. He would like the homeowners to remember that they received the benefit of having an affordable unit for 25 years.

Jim Struble of 912 Thoreau Court is the original owner since 1990. He would like to know if it was Mahwah’s or the State’s responsibility to let the homeowner’s know of the rule change. The reply was that Mahwah took the initiative to notify owners as soon as it was determined that Mahwah must follow the COAH guidelines.

A resident noted that many people were commenting on their wishes to sell their units. However, she wishes to continue living in her unit. If maintenance and taxes go up substantially, she will be unable to stay. Can the Township offer any type of assistance to those owners who wish to remain living in their units?

Several additional residents continued to question the legitimacy of the 95/5 regulation. Mr. Fede stated it is not possible to say one way or the other as the case has not been heard in a court of law.

A motion was made by Mr. Donigian and seconded by Mr. Spiech to close the Public Portion and return to Regular session at 9:00 PM.

CORRESPONDENCE: None

A. MANAGER’S REPORT:

The Trust Fund balance as of 5/31/2013 was $2,266,449.46. The Non-Development Trust Fund balance as of 5/31/2013 was $350,840.32.

UNFINISHED BUSINESS:

a. THIRD ROUND UPDATE – No recent activity in Third Round Updates regarding Trust Funds.

b. FORECLOSURES – No activity. It was noted that some towns are letting foreclosures go.

c. TRUST FUND EXPENDITURE – Demolition has been completed on the Ramapo Valley Road property. Mr. Donigan stated that a 1,000-gallon heating tank was found. No soil sample was taken. Who will pay for cleanup of the site?

5 NEW BUSINESS:

a. EXPIRATION OF CONTROLS –

 Letters have been mailed to the remaining Affordable Unit owners in Franklin Heights.

 Mahwah has been successful purchasing Units and enacting 30-year-controls. New Units will not get a break on maintenance fees; however, taxes will continue to be low. The suggestion was made that when notices come in regarding Units for Sale, all Council members should be informed so a decision on purchasing can be made. A written procedure to address Unit purchases needs to be established. A paper trail must be started in the event of a court case.

There being no further business, a motion to adjourn the meeting at 9:40 PM was made by Mr. Savino and seconded by Mrs. McDonough. All in favor. Motion carried.

The next scheduled meeting of the Housing Commission is July 16, 2013, at 7:00 PM in Room 311 of the Municipal Office.

Respectfully submitted,

Kathryn Hagan Recording Secretary