Growing Smart Legislative Guidebook
Chapter 4 (part 3): State Planning
4-208 State Planning for Affordable Housing (Two Alternatives)
Alternative 1 — A Model Balanced and Affordable Housing Act 
4-208.1 Findings and Purposes
The [legislature] finds and declares as follows:
(1) The primary goal of this Act is to assure the availability of a wide variety of housing types that will cover all income strata and accommodate a diverse population, including growing families, senior citizens, persons and households with special needs, single householders, and families whose children are of adult age and have left the household, with special emphasis and high priority on the provision of low- and moderate-income housing on a regional fair-share basis.
(2) The attainment of this goal of providing a regional fair share of the need for balanced and low- and moderate-income housing is of vital statewide importance and should be given highest priority by local governments. It requires the participation of state, regional, and local governments as well as the private sector, and the coordinated effort of all levels of government in an attempt to expand the variety of affordable housing opportunities at appropriate locations.
(3) Balance in employment and residential land use patterns should reduce traffic congestion, contribute to an improved environment through the reduction in vehicle-related emissions, and ensure that workers in this state will have available to them the opportunity to reside close to their jobsites, making the state more competitive and attractive as a location for new or expanded businesses.
(4) Balanced housing and employment opportunities at appropriate locations should result in reducing the isolation of lower income groups in a community or region, improving the safety and livability of neighborhoods, and increasing access to quality public and private facilities and services.
(5) State, regional, and local governments have a responsibility to use the powers vested in them to facilitate the improvement and development of a balanced housing stock that will be affordable to all income levels, especially middle-, moderate-, and low-income households, and meet the needs of a diverse population.
(6) The [legislature] recognizes that in carrying out this responsibility, each local government must also consider economic, environmental, and fiscal factors and community goals set forth in its local comprehensive plan and must cooperate with other local governments and state and regional agencies in addressing the regional housing needs for middle-, moderate-, and low-income households.
It is the [legislature's] intent to:
(1) ensure that local governments recognize their responsibilities in contributing to the attainment of the state's fair-share housing goal identified in Section [4-208.1] of this Act and that they endeavor to create a realistic opportunity to achieve this goal;
(2) ensure that local governments prepare and affirmatively implement housing elements in their comprehensive plans, which, along with federal and state programs, will realize the attainment of the state's fair-share housing goal identified in Section [4-208.1] of this Act;
(3) recognize that local governments may be best capable of determining which specific efforts will most likely contribute to the attainment of the state's fair-share housing goal identified in Section [4-208.1] of this Act;
(4) ensure that each local government cooperates with other local and regional governments in order to address the regional housing needs of middle-, moderate-, and low-income persons;
(5) assist local governments in developing suitable mechanisms and programs to promote and develop a variety of middle-, moderate-, and low-income housing types;
(6) provide a mechanism whereby low- and moderate-income housing needs may be equitably determined on a regional basis and a fair share of such regional needs may be allocated to local governments by a state administrative agency [and by regional planning agencies];
(7) encourage state agencies to reward performance by creating linkages between grant-in-aid programs and the provision of opportunities for low- and moderate-income housing by local governments;
(8) implement programs that will encourage home ownership over a wide range of income levels, especially by middle-, moderate-, and low-income persons;
(9) provide for a state administrative agency to review and approve local housing elements and provide state funding, when available, on a priority basis to those local governments with approved elements; and
(9) provide for [regional planning agencies] to review and approve local housing elements under the general supervision of a state administrative agency which will provide state funding, when available, on a priority basis to those local governments with approved elements; and
(10) provide for a state administrative agency to prepare substantive and procedural rules to assist and guide [regional planning agencies and] local governments in carrying out this Act.
As used in this Act:
(1) "Act" means the Balanced and Affordable Housing Act of ___________.
(2) "Affordable Housing" means housing that has a sales price or rental amount that is within the means of a household that may occupy middle-, moderate-, low-, or very low-income housing, as defined by paragraphs (13), (14), (15), and (21), below. In the case of dwelling units for sale, housing that is affordable means housing in which mortgage, amortization, taxes, insurance, and condominium or association fees, if any, constitute no more than  percent of such gross annual household income for a household of the size which may occupy the unit in question. In the case of dwelling units for rent, housing that is affordable means housing for which the rent and utilities constitute no more than  percent of such gross annual household income for a household of the size which may occupy the unit in question.
• Percentages of gross annual household income, shown in brackets, are for 1995 and were derived from the New Jersey Administrative Code, § 5:93-7.4 (1995), for the New Jersey Council on Affordable Housing. These percentages may vary by region of the country or may be influenced by current requirements of various mortgage financing programs, such as those administered by the Federal Housing Administration (FHA), the Federal National Mortgage Association (FNMA), or the Federal Home Loan Mortgage Corporation (FHLMC). Consequently, it may be necessary to modify or update these percentages.
• It is the intention that the term "affordable housing" be construed throughout this Act to be synonymous with the term "middle-, moderate-, and low-income housing" and they are used interchangeably throughout this model. By contrast, when the term "low- and moderate-income housing" is used, the intent is to specifically exclude middle-income housing.
(3) "Authority" means the entity designated by the local government for the purpose of monitoring the occupancy, resale, and rental restrictions of low- and moderate-income dwelling units.
(4) "Balanced" means a recognition of, as well as an obligation to address, the need to provide a variety and choice of housing throughout the region, including middle-, moderate-, and low-income housing.
(5) "Council" means the Balanced and Affordable Housing Council established by this Act which shall have primary jurisdiction for the administration and implementation of this Act.
(6) "Density" means the result of:
(a) dividing the total number of dwelling units existing on a housing site by the net area in acres; or
(b) multiplying the net area in acres times 43,560 square feet per acre and then dividing the product by the required minimum number of square feet per dwelling unit.
The result is expressed as dwelling units per net acre.
(7) "Development" means any building, construction, renovation, mining, extraction, dredging, filling, excavation, or drilling activity or operation; any material change in the use or appearance of any structure or in the land itself; the division of land into parcels; any change in the intensity or use of land, such as an increase in the number of dwelling units in a structure or a change to a commercial or industrial use from a less intensive use; any activity which alters a shore, beach, seacoast, river, stream, lake, pond, canal, marsh, dune area, woodland, wetland, endangered species habitat, aquifer, or other resource area, including coastal construction or other activity.
(8) "Household" means the person or persons occupying a dwelling unit.
(9) "Housing Element" means that portion of a local government's comprehensive plan, as identified in Section [4-208.9] of this Act, designed to meet the local government's fair share of a region's low- and moderate-income housing needs and analyze the local government's overall needs for affordable housing.
(10) "Housing Region" means that geographic area determined by the Council that exhibits significant social, economic, and income similarities, and which constitutes to the greatest extent practicable, the applicable primary metropolitan statistical area as last defined and delineated by the United States Census Bureau.
(10) "Housing Region" means a substate district that was previously designated by the governor pursuant to [Sections 6-601 to 6-602, or cite to other section of state statutes providing for substate districting delineation].
(11) "Inclusionary Development" means a development containing [at least 20 percent] low- and moderate-income dwelling units. This term includes, but is not necessarily limited to, the creation of new low- and moderate-income dwelling units through new construction, the conversion of a nonresidential structure to a residential structure, and/or the gut rehabilitation of a vacant residential structure.
(12) "Local Government" means a county, municipality, village, town, township, borough, city, or other general purpose political subdivision [other than a council of governments, regional planning commission, or other regional political subdivision].
(13) "Low-Income Housing" means housing that is affordable, according to the federal Department of Housing and Urban Development, for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income that does not exceed 50 percent of the median gross household income for households of the same size within the housing region in which the housing is located. For purposes of this Act, the term "low-income housing" shall include "very low-income housing."
(14) "Middle-Income Housing" means housing that is affordable for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income that is greater than  percent but does not exceed [specify a number within a range of 95 to 120] percent of the median gross household income for households of the same size within the housing region in which the housing is located.
• While the definitions of low-income and moderate-income housing are specific legal terms based on federal legislation and regulations, this term is intended to signify in a more general manner housing that is affordable to the great mass of working Americans. Therefore, the percentage may be amended by adopting legislatures to fit the state's circumstances.
(15) "Moderate-Income Housing" means housing that is affordable, according to the federal Department of Housing and Urban Development, for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income that is greater than 50 percent but does not exceed 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located.
(16) "Net Area" means the total area of a site for residential or nonresidential development, excluding street rights of way and other publicly dedicated improvements such as parks, open space, and stormwater detention and retention facilities. "Net area" is expressed in either acres or square feet.
(17) "Petition For Approval" means that petition which a local government files which engages the [Balanced and Affordable Housing Council or regional planning agency] approval process for a housing element.
(18) "Regional Planning Agency" means a [council of governments, regional planning commission, or other regional political subdivision] with the authority to prepare and adopt a regional comprehensive plan.
(19) "Regional Fair Share" means that part of a region's low- and moderate-income housing units that is allocated to a local government by [the Balanced and Affordable Housing Council or a regional planning agency].
[(20) "Regional Fair-Share Allocation Plan" means the plan for allocating the present and prospective need for low- and moderate-income housing to local governments in a housing region that is prepared by a [regional planning agency] using regional need figures provided by the Balanced and Affordable Housing Council.]
(21) "Unnecessary Cost Generating Requirements" mean those development standards that may be eliminated or reduced that are not essential to protect the public health, safety, or welfare or that are not critical to the protection or preservation of the environment, and that may otherwise make a project economically infeasible. An unnecessary cost generating requirement may include, but shall not be limited to, excessive standards or requirements for: minimum lot size, building size, building setbacks, spacing between buildings, impervious surfaces, open space, landscaping, buffering, reforestation, road width, pavements, parking, sidewalks, paved paths, culverts and stormwater drainage, oversized water and sewer lines to accommodate future development without reimbursement, and such other requirements as the Balanced and Affordable Housing Council may identify by rule.
(22) "Very Low-Income Housing" means housing that is affordable, according to the federal Department of Housing and Urban Development, for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income equal to 30 percent or less of the median gross household income for households of the same size within the housing region in which the housing is located.
• Additional definitions may be needed as the Council develops procedures and programs to implement this statute. Some definitions may be incorporated into the Council's rules, thereby avoiding the need to amend the statute.
4-208.4 Creation and Composition of Balanced and Affordable Housing Council
(1) There is hereby established a Balanced and Affordable Housing Council.
(2) The Council shall consist of  members to be appointed by the governor. The members shall consist of the following:
[(a) The commissioner or director of the Department of Housing and Community Development [or similar state agency];]
[(b) The director of the State Housing Finance Agency;]
[(c)  members of a municipal legislative body [or other elected chief officials of local governments, other than counties];]
[(d)  elected chief county executives or legislators;]
[(e)  resident of low- or moderate-income housing or citizen designated as an advocate for low- or moderate-income persons;]
[(f)  citizens representing the various geographic areas of the state; and]
[(g)  representatives of professional and service organizations who are active in providing balanced and affordable housing, including, but not limited to, home building, nonresidential development, banking, construction, labor, and real estate.]
• A key to a successful balanced and affordable housing council is broad representation by both local officials and persons knowledgeable about building and managing middle-, moderate-, and low-income housing. While this model has the governor making all of the appointments to the Council, in some states, appointments could instead be made by the senate president and speaker of the house. Other designated appointments could include representatives of the state home builders association and/or a state chapter of the American Planning Association. While language has not been provided here, the Act may also indicate whether members should have term limits and how they may be removed.
4-208.5 Organization of the Council
(1) The Approving Authority shall grant approval of an affordable housing development unless facts produced in the record at the public hearing or otherwise of record demonstrate that the development as proposed:
(a) would have significant adverse effects on the environment; or
(b) would significantly conflict with planning goals and policies specified in the local government's comprehensive plan, provided they are not designed to, or do not have the effect of, rendering infeasible the development of affordable housing while permitting other forms of housing.
(2) The Approving Authority may condition the approval of the affordable housing development on compliance with local government development standards, contained in an ordinance or regulation, which are necessary for the protection of the health and safety of residents of the proposed development or of the residents of the local government, or which promote better site and building design in relation to the area surrounding the proposed development, provided that any such ordinances or regulations must be equally applicable to both affordable housing development and other development, and provided that such conditions do not render the affordable housing development infeasible. The Approving Authority shall waive such local government development standards where their application would render the provision of affordable housing infeasible, unless such waiver would cause the affordable housing development to have significant adverse effects on the environment.
(3) For purposes of this Act, a requirement, condition, ordinance, or regulation shall be considered to render an affordable housing development proposed by an affordable housing developer that is a nonprofit entity, limited equity cooperative, or public agency infeasible when it renders the development unable to proceed in accordance with program requirements of any public program for the production of affordable housing in view of the amount of subsidy realistically available. For an affordable housing development proposed by an affordable housing developer that is a private for-profit individual firm, corporation, or other entity, the imposition of unnecessary cost generating requirements, either alone or in combination with other requirements, shall be considered to render an affordable housing development infeasible when it reduces the likely return on the development to a point where a reasonably prudent developer would not proceed.
4-208.6 Appeal to [State Housing Appeals Board or Court]
(1) An affordable housing developer whose application is either denied or approved with conditions that in his or her judgment render the provision of affordable housing infeasible, may, within [30 or 45] days of such decision appeal to the [State Housing Appeals Board or other state trial court] challenging that decision. The [Board or Court] shall render a decision on such application within  days of the appeal being filed. In its determination of any such appeal, the [Board or Court] shall conduct a de novo review of the matter.
• The New England statutes are either silent on the burden of proof before the appeals board, or place the burden of proof on the local government. Given the nature of the interests involved — municipal discretion vs. housing affordability — it is advisable to allow the appeal authority to conduct its own independent de novo review of the facts. Whether the applicant or the local government has the ultimate burden of proof is a question of policy for each state to determine as it balances the weight of affordable housing needs against local government planning discretion. Optional language on burden of proof is provided in paragraph (2) below.
(2) In rendering its decision, the [Board or Court] shall consider the facts and whether the Approving Authority correctly applied the standards set forth in Section [4-208.5] above.
[add optional additional burden of proof language for (2)]
[In any proceeding before the [Board or Court], the Approving Authority shall bear the burden of demonstrating that it correctly applied the standards set forth in Section [4-208.5] above in denying or conditionally approving the application for an affordable housing development.]
(3) The [Board or Court] may affirm, reverse, or modify the conditions of, or add conditions to, a decision made by the Approving Authority. The decision of the [Board or Court] shall constitute an order directed to the Approving Authority, and shall be binding on the local government which shall forthwith issue any and all necessary permits and approvals consistent with the determination of the [Board or Court].
(4) The [appellate court of competent jurisdiction] shall have the exclusive jurisdiction to review decisions of the [Board or Court].
[The order of the Board may be enforced by the Board or by the applicant on an action brought in the [trial court].]
• Where a housing appeals board rather than a court is selected, it must be given the authority to enforce its orders.
4-208.8 Nonresidential Development as Part of an Affordable Housing Development
(1) An applicant for development of property that will be principally devoted to nonresidential uses in a nonresidential zoning district shall have the status of an affordable housing developer for the purposes of this Act where the applicant proposes that no less than 20 percent of the area of the development or 20 percent of the square footage of the development shall be devoted to affordable housing, except that the applicant shall bear the burden of proof of demonstrating that the purposes of a nonresidential zoning district will not be impaired by the construction of housing in that zoning district and that the health, safety, and welfare of the residents of the affordable housing will not be adversely affected by nonresidential uses either in existence or permitted in that zoning district.
(2) For purposes of paragraph (1) above, the square footage of the residential portion of the development shall be measured by the interior floor area of dwelling units, excluding that portion which is unheated. Square footage of the nonresidential portion shall be calculated according to the gross leasable area.
4-208.9 Overconcentration Of Affordable Housing
In order to prevent the drastic alteration of a community's character through the exercise of the rights conferred upon affordable housing developers by this Act, the requirements to approve affordable housing developments by a local government as specified in this Act shall cease at such time as:
(1) the local government fulfills the requirements to become an exempt local government, as defined in Section [4-208.3(6)]; or
(2) where the number of units of affordable housing approved and built pursuant to this Act exceeds [__,000] dwelling units over a period of  years.
• Jurisdictions where there is faster growth may experience a rush of affordable housing proposals. To prevent communities from becoming overwhelmed by the prospect that developers may charge out to buy or option land within one community where there is ample vacant land, and seek zoning changes, there should be some upper limit on the amount of housing that can be approved under the special procedures contained in this statute. For example, in New Jersey during the 1980s, some towns were faced with as many as 11 lawsuits by developers. In the Section above, this occurs when the local government meets the requirements for an "exempt local government" in Section 4-208.3(6) or when a statutorily established limit on the number of units of affordable housing over a certain period of time is met.
[4-208.10 Housing Appeals Board]
[(1) Composition [describe composition of housing appeals board and terms of members].]
• If a housing appeals board, rather than the courts, is selected to administer the statute, the state will have to determine its composition. There should be representation by local and, if appropriate, county interests, by private for-profit and nonprofit developers of affordable housing, by planning interests, and by the public at large. Provided that the interests are reasonably balanced, there is no single correct answer either to the size of the body or the precise breakdown of appointees. If a court is chosen, it should be the trial court of general jurisdiction in the state.
[(2) Within  months after the effective date of this Act, the Housing Appeals Board shall adopt rules and regulations governing practice before it. The Board may adopt [subject to approval of the Department of Housing and Community Development or other state agency] such other rules and regulations as it deems necessary and appropriate to carry out its responsibilities under this Act.]
• The bracketed language in paragraph (2) gives the policy-making arm of the governor some input into substantive regulations. It is expected that general state administrative procedures acts will provide the procedural framework, such as notices, public hearings, publication, etc. for rule making, so that rule-making procedures need not be spelled out in this statute.