Politics & Government

Mahwah Moves to Buy Back Affordable Housing Units

Amidst controversy among unit owners over what happens to the money once mature units are sold, the township is looking to buy some of the 459 units whose controls are set to expire.

By Patch Editor Jessica Mazzola.

Hundreds of affordable housing units in Mahwah are reaching their control period expiration dates, and the township is interested in buying some of them so they can retain their Affordable Housing status.

At a township council meeting last Thursday, the council moved to create a new ordinance indicating its interest in using Affordable Housing Trust Fund money to buy back some of the units that have reached their 25-year maturation point. Once a unit has been owned for a pre-determined “control period,” the owners have the option to sell it. 

Find out what's happening in Mahwahwith free, real-time updates from Patch.

The town gets first dibs, and could buy the home at its Affordable worth – a number reset by the Council on Affordable Housing each year. The town has 90 days to decide whether or not it wants to buy. If the town, COAH, and non-profits pass on the purchase, the owner can sell it at full-market value, effectively eliminating it from the town's Affordable Housing pool.

The council’s discussion was prompted by two units whose owners recently indicated they’d like to sell. The council decided Thursday night to buy one of them, a control-priced $154,000 condo unit that Mahwah only has about 30 days left to act on.

Find out what's happening in Mahwahwith free, real-time updates from Patch.

Moving forward, the council said, it wants an ordinance spelling out its desire to buy back some of the AH units. It is expected to discuss a draft of such an ordinance at its next meeting.

Still undetermined, however, is exactly which houses to buy back, and how many.

According to township Business Administrator Brian Campion, Mahwah has already satisfied its COAH obligations, in terms of the number of affordable housing units, in the township for the organization’s Round 1 and Round 2 prescribed obligations.

“Those obligations have been satisfied, they're not coming back,” he told the council Thursday, indicating that Mahwah will not lose COAH credit if it doesn’t buy back all of the units reaching maturation.

However, he said, Round 3 obligations have yet to be determined. And, if the town buys a unit, it can then be re-sold as Affordable Housing, and work toward satisfying the town’s Round 3 obligation.

The council also requested all units be reviewed by the Affordable Housing Commission, which would then make a recommendation on whether or not the town should buy them.

Mahwah has over $2 million in its Affordable Housing Trust Fund, over $1M of which is committed to a United Way Affordable Housing project planned for Route 202. Campion said one problem the town might encounter when buying maturing units is cash flow.

“You replenish the money [in the trust fund] when you resell the unit,” he told the council. “You can’t do 100 of these simultaneously, you can’t recycle the money fast enough.”

And, the tone of the entire conversation was set by a growing controversy amongst affordable housing unit owners in Mahwah, who were recently notified of the state’s 95-5 policy.

The rule says says that if owners sell at full-market value they need to split the profit with the Affordable Housing Trust Fund, with 95% of it going to the Fund. A group of township residents is organizing to sue Mahwah, and possibly the state, over the 95-5 rule.

“It’s a very, very difficult situation,” now-retired Councilman John Spiech, a member of the Affodable Housing Commission, said at the meeting.

But, despite the controversy, and the uncertain future of COAH and its guidelines, the council said the township will likely move forward on purchasing units.

“We need to show the community we are committed to Affordable Housing,” Mayor Bill Laforet said.

Follow Patch on Facebook and Twitter. And, be sure to sign up for the Mahwah Patch newsletter and breaking news alerts.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here