REINHART: Adaptive reuse can help towns with affordable housing

The first full week in July has shot off the starting gun for the race to the courthouse for many towns and developers since the New Jersey Supreme Court decision in March announcing that COAH is officially in a coma and the affordable housing battleground shifted back to the courts where it began 40 years ago.

While the early skirmishes will involve just how much affordable housing each town has to provide, what should not be overlooked is where the housing will be created and what it will look like.

Much of the affordable housing provided in the 1980s to the early 2000s was in multifamily attached buildings of three stories or less in suburban greenfield open space locations. That type of housing was desired and accepted by the market and the economics worked. Today’s buyers and renters are dominated by the millennial generation, which has shown a desire for a different type of housing.

This moment in the history of the New Jersey affordable housing experiment provides an opportunity for some fresh thinking that can provide affordable housing while improving the tax situation and maintaining open space.

In recent years, there has been a movement toward redevelopment with a “twist” in the usage of the property: car dealer showrooms are becoming restaurants, schools becoming offices, parking garages becoming residential structures. The term coined for this is “adaptive reuse.” New Jersey is seeing some of this and could see more with better coordination between the development community, the planning community and the municipalities.

The court-compelled requirement for towns and developers and planners to come together now to address the affordable housing litigation presents an opportunity to utilize the adaptive reuse approach in a true “win-win” strategy. Conversion of older buildings into residential structures can more easily carry an affordable housing component than traditional new construction on open fields.

Aesthetically, it is easier to include affordable units within a single structure without any outward evidence of lesser fit and finish. Maintenance fees for the association managing the building can be based upon square footage so the smaller affordable units will naturally pay a smaller monthly association fee without the stigma of lower fees as subsidized housing.

Residential reuse buildings can include affordable units that will go toward satisfying a municipality’s affordable housing obligation with no new construction and creating property tax revenues that had been lost as the building’s value declined.

Unfortunately, much of the current zoning in suburban New Jersey does not match the market demand. As a result, requests for changes in zoning through the governing body or the use variance process are common. The opportunity exists to link a zone change or use variance with the provision of some affordable housing. Combining a residential component with an office or retail use is becoming more common, particularly with older buildings that offer fresh thinking options.

As the towns, developers and their legal teams prepare to do battle in the coming months over affordable housing, they should consider reuse of existing buildings to provide affordable housing.

Peter S. Reinhart is the director of the Kislak Real Estate Institute at Monmouth University and the NJAR/Greenbaum Professor of Land Use Policy. He was a member of COAH from 1993-2004.