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An overlay zone expands the zoning in designated underlying areas and permits an additional use in those areas. In the case of the affordable housing overlay zone districts, a property owner can continue to use the property as currently zoned, or develop the property with multifamily housing which would include an affordable housing component.
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Within New Jersey, all municipalities are required to plan, zone for, and take affirmative steps to provide a realistic opportunity for the development of affordable housing within their borders. This obligation comes from the State Constitution and a series of court decisions, often referred to as the Mount Laurel decisions.
If Westfield does not zone for or provide a realistic opportunity for the construction of low and moderate income housing, it can be subject to lawsuits, called “builders remedy” lawsuits. A builder can come forward, challenge a municipality’s compliance with its obligations to provide low and moderate income housing and then, if the Court agrees with the builder, then the Court gets to decide what type of housing project the builder can build—how large a building, how many units, and how many affordable housing units and where it will be built. The Court has the ability to override any existing zoning. In brief, in such lawsuits, municipalities lose almost all control over the housing development projects.
Very often, affordable housing can be described as “workforce housing,” meaning housing for individuals with earned income that is insufficient to secure quality housing in reasonable proximity to his/her workplace. The law requires that half of all affordable housing units constructed be for moderate income households, or households earning between 50-80% of median household income in the region. The other half of affordable units constructed are split between low income households (defined as those which earn 50% or less of median household income in the region), and very low income households (defined as those which earn 30% or less of median household income in the region).
The table below provides an example of those income thresholds in Westfield in 2022. Earned Income limits for Affordable Housing:
Even in luxury rental buildings like 333 Central Avenue, Westfield is meeting portions of its affordable housing obligations. In 333 Central, there are 9 units designated as low and moderate income housing, meaning that 9 units in that building are available at lower rental rates for individuals and families who meet the income requirements set out above.
The Fair Share Housing Center (FSHC) is a court-recognized affordable housing advocacy group. FSHC has been heavily involved in monitoring NJ municipalities’ efforts to comply with affordable housing obligations. In Spring 2017, the Town of Westfield and FSHC entered into negotiations to determine an affordable housing strategy for Westfield. Westfield, the FSHC, and a court appointed Special Housing Master identified the most appropriate locations for new housing development, while still maintaining Westfield’s character and agreed to a Settlement Agreement that was approved unanimously by the Mayor and Town Council in April 2017. The Superior Court further approved the Settlement Agreement in October 2017, finding it to be fair and reasonable to low and moderate income households.
In 2021, the Town amended its Settlement Agreement with FSHC, allowing for the development of the vacant Handler Building on North Avenue East as a hydroponic farm, restaurant, retail, and educational space -- all known as Redi Farms -- rather than for multi-family housing as was required under the housing plan. Affordable unit obligations for the Handler Building Site are to be built at the Williams Nursey site (a long-zoned property for affordable housing).
There is uncertainty surrounding affordable housing obligations within the State and a risk that inaction on the part of Westfield could result in the Court dictating how we will meet our low and moderate income housing requirements. Recent court decisions have not been favorable to municipalities. By entering into a Settlement Agreement, Westfield gains both finality and certainty in terms of meeting its affordable housing obligation; and effectively eliminates any future costs associated with litigation with the FSHC.
The Settlement Agreement lays out the steps that Westfield will take to meet its affordable housing obligations. Highlights include adopting a modified Master Plan element, called the Housing Element and Fair Share Plan which lays out the Town’s affordable housing strategy consistent with the Settlement Agreement and Court Order. The Housing Element and Fair Share Plan will include the creation of new “overlay zones,” which prescribe where affordable housing may be built in Westfield.
Westfield’s overlay zones are located in close proximity to downtown and mass transit--along the North and South Avenue corridors east of Central Avenue; adjacent to the South Avenue traffic circle; on Central Avenue; and, on Ross Place.
Under the Mount Laurel decisions, the Fair Housing Act of 1985, and regulations adopted by COAH, every municipality must satisfy its “rehabilitation” of existing housing obligation, its “prior round” obligation to zone to allow affordable housing, and its “Third Round” affordable housing obligation which is also referred to as the “fair share” obligation.
Westfield will satisfy its “rehabilitation” obligation share by participating in the Union County Home Improvement Program, where income-eligible households may apply for funding from the County housing rehabilitation program.
Westfield has already met its prior round obligation of 139 units from prior years.
The settlement agreement approved by the Court provides that Westfield’s “Third Round” prospective need obligation is 1090 affordable housing units. While that is quite large, the agreement recognizes that the Town is virtually fully developed and therefore unable to meet anywhere near this 1090 unit obligation. As a result, the Town is entitled to a Vacant Land Adjustment which reduces the affordable housing obligation provided through zoning from 1090 units to 68 units. This is referred to as the Town’s Realistic Development Potential (RDP).
The Town has already begun construction or completed new projects to meet this 68 unit RDP, such as 333 Central Avenue, The Parker at 339 West Broad Street (former car wash), and 753 Grandview Avenue.
The remaining issue is what happens with the difference between the Town’s “fair share” or “Third Round” number and its RDP. That difference is referred to as “unmet” need. In the Town’s case, its unmet need is 1005 (1090 - 68 -24 unit surplus credit from second round = 1005).
The law provides that the Town must “address” its unmet need and Westfield is doing that by enacting overlay zones to offer the realistic opportunity to produce approximately 100 affordable housing units. This will be done through “inclusionary” zoning in designated areas which requires a developer to allocate between 15% to 20% of housing units as affordable (depending if they are rental or sales units). The remaining 80% to 85% of the units will be market rate units.
Thankfully, through discussion and negotiation of the Settlement Agreement terms, Westfield successfully proved that there was no place in which to build that many affordable housing units. However, the Town did agree to provide an opportunity for new affordable housing development via the establishment of new affordable housing overlay zones. (For comparison, the total number of affordable housing units that could be built in the overlay zones comes to approximately 100 units, which equates to maximum buildout of approximately 690 new units)
Finally, and very importantly, the Town was able to negotiate terms in the Settlement Agreement that do not allow developers to use “unmet need” as a legal basis for requiring the grant of additional re-zonings, variances, or other relief beyond what is specifically now agreed. The Town’s commitment to provide 100 units against the Town’s original unmet need requirement of 1005 has been determined as sufficient by the Court, and this number cannot go up.
There are some plans already underway to develop properties within the overlay zone districts and one has been completed. The “Pan Am Cleaners” site (near the corner of South Avenue and Westfield Avenue) which once contained vacant, boarded up buildings, has been developed as "501 South." Other projects within overlay zones have obtained site plan approval from the Planning Board, including “Westfield Crossing”along South Avenue at the Garwood border, once occuped by auto repair, storage, and industrial buildings. Properties at 516 North Avenue East and 440 North Avenue East have also obtained approvals to build inclusionary projects.
All of the developments are subject to local ordinances that regulate building design, building massing including setback and height requirements, and overall site layout. All multi-family or mixed-use development within the overlays is also subject to review by the Planning Board. The standards for building size within the overlay zone districts are identical to or closely match what is permitted by the existing zoning.
Certainly, development generally will put more cars on adjacent roadways but Planning Board review will help to control inflows and outflows of cars on to roadways to help control traffic issues. In addition, the proximity of these housing units to downtown and public transportation will limit vehicle traffic during rush hour.
The Joint Center for Housing Studies at Harvard University found that when comparing apartments to detached single-family dwellings, apartment dwellers own fewer cars and generate fewer automobile trips per household. The proposed overlay zones within Westfield are located in close proximity to downtown and mass transit, thus allowing for more pedestrian vs. vehicular activity.
Often, there is a concern that new apartments will result in a strain on local schools. However, studies conducted by the Center for Urban Policy Research at Rutgers University, the Joint Center for Housing Studies at Harvard University, and information from other New Jersey municipalities have shown that the number of school-age children in multi-family housing is dramatically lower than that which comes from a detached single-family dwelling and in many cases is nonexistent. During the 2018 Downtown New Jersey Annual Conference, the South Orange Village President stated that they were seeing one school aged child coming from 33 units of multi-family housing.
Westfield is now in what is called the “compliance phase,” which means that the Town is carrying out the tasks agreed to in 2017 by the Mayor and Council. Westfield has adopted its housing plan and continues with its implementation as mandated by the Settlement Agreement and Court’s Judgment of Compliance and Repose. As long as it continues to do so, Westfield will have immunity from builder’s remedy lawsuits.