A Break for a Break

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Among the many things lost with the collapse of the World Trade Center was the hope that revenues from the leasing of the towers to a private operator could be channeled into an affordable housing development fund. But while New York recovers, Jersey City is sprinting forward–not just with a surge in companies moving their operations there, but with a commitment under new mayor Glenn Cunningham that any new incentive deals for new luxury residential or commercial development will include prescribed contributions from builders to a fund for affordable housing construction.

Cunningham’s office has not yet released its new incentive policy, breaking its own promise to release a plan by last Thanksgiving. But representatives from member organizations of the Jersey City Affordable Housing Coalition, a group formed to promote increased public investment in shelter, say they expect the mayor to follow through on a pledge he signed last spring. At a mayoral debate, members of New Jersey ACORN asked each candidate to pledge on the spot whether or not he would support legislation linking tax abatements for developers to a fund for affordable housing. Cunningham said yes, and now, as Jersey City’s first African-American mayor, he owes his election to support from the city’s black and Latino-majority wards, where insufficient access to affordable housing is a mounting problem.

To ACORN, the prospect of piggybacking on breaks for developers and their corporate tenants is not ideal. “We’re really committed to getting a linkage ordinance not tied to tax abatements,” says an ACORN spokeswoman. “Too much money is given away when [Jersey City] is really a desirable place to locate right now.” But the current initiative comes at a critical time. Governor James McGreevey is calling for the state to use more than $100 million from the state’s existing affordable housing fund–a resource won through decades of landmark litigation–to help eliminate the state’s budget deficits.

This wouldn’t be the first time Jersey City tied tax abatements for developers to a fund for affordable housing. Such “linkage” efforts are commonplace now, but Jersey City was a pioneer in the early 1980s. Because the legality of these initiatives had not yet fully been put to the test in court, they were undertaken informally, recalls Rick Cohen, then the city’s director of the Department of Housing and Economic Development. Says Cohen, now executive director of the National Committee for Responsive Philanthropy, “We made it work by negotiating on a case-by-case basis with developers.”

Under more recent mayors, however, including ex-gubernatorial candidate Bret Schundler, cash collected in lieu of taxes from developers–including big revenues from the building boom of the late 1990s–ended up earmarked for purposes other than housing.

Sources familiar with the mayor’s plans say a new housing fund is likely to include developer dollars already collected but not spent. Says Harold Colton-Max, president of the Affordable Housing Coalition, “If it reverts to some semblance of the old policy, it’s a welcome result.”