Holmdel: Low Income Housing

The words "fair and equitable" appear frequently in discussions regarding low income housing. In reality the process is anything BUT "fair and equitable" to the ones footing the bill, namely the tax-payers. There are many ways to meet a town's low income housing obligation however inevitably the choice most costly to the town is opted for. Holmdel, in its third round COAH negotiations, has proposed to build roughly 600 family rental units so as to meet its estimated 110 low income family rental unit obligation. So approximately an additional 500 family rental units will be built to meet its 110 unit obligation!!!

Tax-payers of Holmdel, and tax-payers of all towns in NJ, should demand "fair and equitable" treatment! There are better ways in which to achieve social engineering goals.

Please find enclosed my letter to the Judge presiding over Holmdel's low income housing discussions. It is not too late, please encourage Holmdel Township Committee members to entertain better solutions. Holmdel TC I strongly encourage you to engage the citizens and you will be surprised at the creativity and knowledge you have available to you.

March 4, 2018

The Honorable Dennis R. O'Brien, J.S.C

Monmouth County Courthouse

71 Monument Park, Courtroom 210W

Freehold, NJ 07728

Copied: Maureen Gabriel

Dear Judge O’Brien,

Holmdel is and has been my home for the last twelve plus years. I was not a resident when Holmdel met its last two rounds of COAH obligations. Old timers have related to me the extensive open discussions that the then Township Committee had with the residents of the town prior to Holmdel sitting at the negotiating table. The plan before you, I am sorry to say, has zero input from the residents. Holmdel’s tax-payers need fair and equitable treatment in this process too.

The current plan posits that an additional 110 family rental units will meet Holmdel’s low income housing obligation for this go-around. There are numerous ways in which to achieve the availability of an additional 110 family rental units.

The plan before you requires the building of 100s more on-market family rental units to cover the costs of building the 110 off-market family rental units. In the proposed plan the low income units constitute roughly 18% of the total; so roughly 110/0.18 =610 units family rental units will be built. It is reasonable to assume that on average there will be one school going child per each family rental unit. This would be 20% increase in Holmdel’s school population and to the extent younger families elect to rent, the impact would be far more significant at the elementary school. The annual cost of educating a child in Holmdel’s public schools is $20,000. Assuming a marginal cost of $15,000 per additional student and a per unit residential tax of $5000, the town will incur an annual loss of $10,000 per family rental unit built. So conservatively the current plan will cost the town approximately 600X$10,000=$6MM annually.

Here is a significantly cheaper and less disruptive alternative route. Let Holmdel subsidize the 110 family rental units directly. To avoid the concentration of low income housing in one location the 110 units can be spread over seven locations. Assume that an on-market family rental unit costs $300,000 and that the low income housing discount is 50%. So Holmdel has to pay the developer $150,000 per unit. A monthly payment of $715 for 30years at Holmdel’s cost of funds is equal to a present value of $150,000. So this approach would annually cost the town 1) the cost to educate 110 additional students ($1.65MM = 110*15,000) plus 2) an annual mortgage payment of ($0.94MM = 110*$715*12) for a total annual cost of $2.6MM. This alternative route would cost the town less than half the annual cost of the proposed plan before you.This approach avoids the building of hundreds of additional rental units and at a significantly lower cost to the town in terms of treasure, congestion and the changing of its low density character.

The point is that no alternatives have been discussed with the township's tax-payers (the one's footing the bill!!!) and seemingly the most expensive route to the town’s tax-payers is being pursued. Holmdel’s tax-payers need fair and equitable treatment in this process too.

Judge O’Brien please request Holmdel leadership to engage the township’s citizens and return with a viable effective plan that is fair and equitable to all parties.

Kindly include this letter in the court’s proceedings addressing Holmdel’s low income housing obligation.

Honorable Judge, I truly believe that a more equitable, cost effective and less disruptive approach, like I am suggesting, will go a long way towards attaining our State’s low income housing goals. Please encourage Holmdel’s leadership to move in the right direction. Holmdel’s tax-payers and tax-payers of all towns in NJ deserve fair and equitable treatment in this journey towards achieving fair housing goals.

Many thanks for your time and consideration.

Sincerely,

Pradeep Jhanjee

Holmdel