LEGISLATIVE UPDATE

By: Michael Pesce, PCAM

The New COAH Regulations

Several issues ago, an article appeared in this publication addressing new regulations adopted by the Council on Affordable Housing (COAH) concerning the establishment of monthly maintenance fees in affordable housing units in future community associations. This was a major policy decision with significant impact. Unfortunately, because the decision only affects communities to be constructed in the future, and not fee structures already in place, the impact will not be felt immediately. But it will avoid the inequities brought about by the old rules, at least prospectively.

The new rules prohibit the maintenance fees of affordable units from being discounted and, in effect, being subsidized by the market priced units in the development. The typical practice in these mixed communities was for the affordable units to pay one-third of the fee that they would have paid without the subsidy. These arrangements created tremendous hard feelings between owners within the same development, with the market unit owners resenting the subsidy, and the affordable owners resenting the resentment, as they did nothing but take advantage of what the law allowed.

Questions do remain as to how the new policy will be implemented. For example, suppose the affordable units have less amenities than their market counterparts (e.g., no decks, garages, etc.). It would seem that objective criteria like that would still permit a disparity in fee. It simply can no longer be an arbitrary and unsubstantiated subsidy.

Chalk one up for fairness. It's only too bad that the change won't benefit those associations where the old system prevails.

UCIOA

As expected, UCIOA and the related bills expired with the end of the two-year legislature term in January 2002. Serious negotiations are now taking place between the various groups with an interest in this legislation. We are cautiously optimistic that the new legislature climate makes it more likely than in the past for a legislative solution to be reached. As you may know, these bills have been pending in Trenton, in various forms, for the last five (5) years.