Judge approves Princeton’s affordable housing settlement

Mercer County Superior Court Judge Mary Jacobson approved a settlement agreement between the municipality of Princeton and the Fair Share Housing Center on Friday after hearing testimony for about eight hours. The approval of the settlement agreement ends almost five years of litigation that was initiated by municipal officials back in 2015.

Half a dozen groups filed objections to the affordable housing plan and had lawyers present at the hearing on Friday. Objectors included the Princeton Progressive Action Group, the Old Orchard Village Homeowners Association, the owners of 29 Thanet, the owner of 375 Terhune Road, the owner of 235 Nassau Street and 25 Wiggins Street, and the owners of the Ivy Inn.

Jacobson said the hearing was to determine whether the plan protects the interest of low and moderate-income households and whether it is fair and reasonable.

“The plan does provide a reasonable opportunity for low and moderate-income housing,” Jacobson said when approving the plan after a marathon day of testimony. Jacobson also said that the town is exceeding its required number of affordable unit credits by 25 units. “It’s rare that a municipality exceeds it by as many,” she said, adding that it shows that the town is trying in good faith to provide affordable housing opportunities.

Numerous conditions must be met as part of the municipality’s plan, and a compliance hearing will be held in about four months to review whether the conditions have been met.

Princeton is one of two municipalities in Mercer County that went ahead with multi-year litigation challenging calculations for the number of affordable units the town would be required to build under COAH. West Windsor was the other municipality. Most other municipalities in the county reached settlements back in 2015.

Details of the settlement

The Princeton settlement stipulates that the municipality will be required to meet an affordable housing rehabilitation obligation of 80 units through a local rehabilitation program for rental and for-sale housing administered by the Princeton Affordable Housing Office. Five units have already been rehabilitated since 2010, so 75 units still must be rehabilitated.

As part of the settlement, it has been agreed that the municipality has met its prior round obligation of 641 units. Princeton officials have agreed to adopt a new ordinance for the consolidated municipality that requires an on-site affordable housing set-aside of 20 percent for all new multi-family residential developments of five or more units that are developed at a density of six or more units per acre.

The municipality has a third-round state Council on Affordable Housing (COAH) prospective need of 753 units. But 244 units have already been built and another four are approved but have not been built yet. The town will also receive bonus credits for certain kinds of developments like group homes.

The bottom line in terms of what the agreement means for future development: The municipality has agreed to fund 265 affordable units in 100 percent affordable developments under the settlement agreement, and the municipality will also rezone other properties for housing that will result in another 77 affordable units within those developments.

Sites to be rezoned for inclusionary development

Terhune and Harrison – The vacant site will be rezoned to permit a residential density of 22 units per acre of family housing and to remove the age restriction requirement. This is anticipated to result in 60 residential units with a required 20 percent set-aside.

A parcel of land at the Princeton Shopping Center – Princeton has reached agreement with the property owner to facilitate the development, via a zoning amendment or use of the redevelopment process, to provide a density of 6.9 units per acre on a southern portion of the 29.1 acre site for the development of 200 family rental units with a 22 percent affordable housing set-aside (or 44 affordable housing family rental units).

Thanet Circle – AvalonBay has purchased 100 and 101 Thanet. The site currently has two office buildings on it totaling 110,000 square feet. Princeton officials are planning to declare the site an area in need of redevelopment. The site will include 221 apartments. Six apartments will be affordable units, and five will be special needs apartments. AvalonBay will subdivide a 2.5-acre parcel and give it to Princeton for an age-restricted affordable housing development.

One hundred percent affordable sites funded by the municipality

Princeton Community Village – Princeton will sponsor the creation of 24 new affordable housing units at Princeton Community Village’s existing development located off of Bunn Drive.

Franklin Avenue and Maple Terrace – The redevelopment project, which will be managed jointly by Princeton Community Housing and the Princeton Housing Authority, will create 80 new affordable family rental units. The project was originally proposed to have 20 “local Princeton preference units,” but the proposal has since been modified by Princeton to eliminate the Princeton preference. Princeton will adopt a zoning ordinance providing for the proposed development. Princeton Community Housing and the Princeton Housing Authority will seek 9% tax credits. The municipality will adopt a resolution committing funding from the municipal affordable housing trust fund for the project.

900 Herrontown Road – The 3-acre, vacant site formerly housed the SAVE animal shelter. The property owner has entered into a contract with the RPM Development Group to develop a 65-unit affordable housing project (64 restricted units, plus a unit for an on-site residential property manager). Editor’s note: RPM submitted an application with NJHMFA seeking 9% tax credits in the 2019 funding round, but the application was denied in December.

The Thanet Tract Senior Development – AvalonBay will give Princeton a 2.5 acre tract located on Thanet Road for the development of an 80-unit, municipally-sponsored, age-restricted, 100% affordable housing development.

The trade off? AvalonBay will not have to pay local property taxes on the site for 30 years, and instead will enter into a payment in lieu of taxes arrangement with the town. AvalonBay will only have to pay the town 11 percent of gross income from its apartment complex at the site each year for 30 years. Developers have called the arrangement a sweetheart deal for AvalonBay.

The 80-unit senior project will not be a 9% tax credit project. The municipality will fund the project with a combination of 4% volume cap tax credits and the municipal affordable housing trust fund, and/or will borrow money for the project. The current estimated cost for the project is $15 to $20 million. The municipality must formally authorize and commit funding sufficient to fully fund the project no later than December 31, 2021.

Supportive and Special Needs Group Homes – Princeton will sponsor four group home projects that will provide16 bedrooms and earn the town 16 unit credits. Princeton agrees to provide a site, sponsor, and funding plan for eight bedrooms no later than June 30, 2021 and have those bedrooms ready for occupancy by June 30, 2022. A site, sponsor, and funding plan for the remaining eight bedrooms must be provided no later than June 30, 2024. All 16 bedrooms must be ready for occupancy by June 30 of 2025. The plans and other information must be provided to the Fair Share Housing Center on or before the date they are due.

In addition to the new units that will be built in town, Princeton has agreed to adopt an overlay ordinance to permit as-of-right, residential uses on the second and third floors of existing or new non-residential developments at a density of 15-units per acre, with a 20-percent set-aside of affordable housing, creating a mixed-use zone providing residences, shopping, and services. Affordable housing developed in the overlay areas will be credited to the municipality’s future affordable housing obligations.

Objectors concerns

The Princeton Progressive Action Group argues that the proposed municipal affordable housing overlay zone ordinances contain requirements that won’t fully achieve the goals of providing more affordable housing options. The Princeton Progressive Action Group has recommended that the affordable housing overlay zones don’t skip over adjacent properties, and that minimum lot sizes be eliminated. The group is also calling for the town to eliminate side-yard requirements unless a lot abuts a residential property, and to set height limits for each affordable housing overlay zone, but eliminate limitations on the number of stories for buildings. The group also argues that the overlay zones should be on both sides of the street in a given block. In lieu of being able to provide enough parking spaces, the group also argues that developers should be able to make payments in lieu of parking, support car shares, and support improved access to biking and transit. The issues raised by the group will be explored more during the compliance phase of the plan.

The Old Orchard Village Homeowners Association argued that the construction of a 65-unit affordable housing development at Herrontown Road at the former SAVE property isn’t appropriate, and doesn’t offer great access to transportation and other amenities.

Elsie Pang supported the Princeton Progressive Action Group, said certain provisions of the draft ordinances would prevent many property owners from implementing the overlay. Pang wants her property at 235 Nassau Street included within an affordable housing overlay zone and is also seeking to have her 25 Wiggins Street property included within an affordable housing overlay zone.

The owners of the Ivy Inn, Rich Ryan and Geoff Aton, were objectors because they believe the affordable housing overlay properties and surroundings lots should not have a 40,000 square foot minimum. They said there should be no minimum lot requirement.

Lawyers for the owner of 375 Terhune Road have argued that the property should be included in the town’s affordable housing plan given that the shopping center and another Terhune property have been included. The owners of 29 Thanet, a former office site similar to 100 and 101 Thanet, made the same argument for that property and said it should be included in the affordable housing plan.

Christine Herbert, the special master appointed by the court to assist the municipality in determining its obligations for affordable housing, told the judge Friday that municipalities aren’t required to include every property that could potentially be used for affordable housing in their affordable housing plans.

“At this point in the process, the municipality is in a position where it has vetted other sites,” Herbert said. “Just because another site could qualify, doesn’t mean they should or have to for the process to be legitimate. There is no obligation of a municipality to look at every site.”