TRENTON – A housing advocate said that state Sen. Raymond Lesniak is trying to redirect $20 million from the state’s housing trust fund to aid a private developer renovating apartments down the street from the Democrat’s Elizabeth home.
The criticism came on the same day the Senate Economic Growth Committee, chaired by Lesniak, voted 7-0 to advance his affordable housing bill (S-1) to the full Senate. Critics of the measure charge that it will allow municipalities to create new barriers to building affordable housing, and the Office of Legislative Services concluded that the bill would likely be found unconstitutional.
“This is total hypocrisy,” Fair Share Housing Center Associate Director Kevin D. Walsh said. “In his own backyard, Senator Lesniak wants the state to provide a $20 million bail out to a private housing development. At the same time, he is pushing S-1, which would cut $20 million in annual funding for urban areas in the rest of the state and make it harder to build starter homes and apartments everywhere else.”
“The state should allocate scarce funds through a fair and competitive process like the one that Sen. Lesniak proposes to eliminate through S-1,” Walsh said. “Ad hoc bailouts through earmarks from Sen. Lesniak do not constitute an effective or fair state housing policy.”
When asked about Walsh’s statements, Lesniak told a Star-Ledger reporter “I don’t comment on anything that person says, ever. He’s a mean-spirited, evil human being.” He also told the reporter that Walsh is “a stupid imbecile.”
According to Walsh, Lesniak introduced a bill, S-1889, that would transfer $20 million in payments of $5 million a year for each of the next four years from the state’s Affordable Housing Trust Fund to renovations of the Oakwood Plaza Apartments down the street from Lesniak’s Elizabeth home. The bill passed the Senate Economic Growth Committee, which Lesniak chairs, on May 13 and now awaits action on the floor of the Senate and in the Assembly.
In January 2009, the Union County Freeholders authorized $20 million in bonds to renovate the apartments. The proceeds of the bond went to a private developer, Community Investment Strategies (CIS). The deal was structured so that if CIS didn’t pay the funds back, Union County and Elizabeth taxpayers would be required to pay back the funds to the bondholders, which enabled the bond to win a favorable rating from Wall Street ratings agencies based on “the county guarantee to levy ad valorem taxes to assure timely debt service payments.”
In March 2010, CIS lost a statewide competition for financing through the Low Income Housing Tax Credit program. Lesniak introduced S-1889 shortly after.
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