TRENTON – Authored by Senator Raymond Lesniak, legislation that would extend the suspension of a fee on commercial construction and, at the same time, help put abandoned homes that are in foreclosure back on the market as affordable housing or market-rate real estate was approved by the state Senate and General Assembly on Monday.
The foreclosure transformation plan was previously vetoed twice by Republican Gov. Chris Christie, but Lesniak said that with the foreclosure crisis continuing in New Jersey, the governor should be given the opportunity to correct his “mistake.”
“This bill combines an incentive for economic growth with a productive means of responding to the mortgage foreclosure crisis that continues to plague New Jersey,” said Lesniak (D-Union.) “It extends the moratorium on the 2.5 percent fee on non-residential development that is scheduled to expire on July 1st and it includes a plan to rescue homes from foreclosure and convert them to affordable housing or put them back on the market where they can be purchased and occupied.”
The bill, S-2716, approved 22-15 by the state Senate and 46-27-5 by the Assembly, would extend until 2018 the moratorium that was originally put in place in 2009, during the depths of the recession, and then extended in 2010.
Also included in the bill is Lesniak’s “New Jersey Residential Foreclosure Transformation Act,” a plan to combat the chronically-high rate of mortgage foreclosures in the state. New Jersey has one of the highest foreclosure rates in the country, with more than 100,000 homeowners dealing with foreclosure.
“In addition to the tragic loss of homes, this foreclosure crisis is a drag on the economy and continues to do harm to cities and towns by leaving houses abandoned and neglected,” said Senator Lesniak. “Unoccupied houses depress property values and can be a safety hazard. The sooner they are put back on the market and become occupied the better.”
New Jersey is experiencing another spike in foreclosures, with foreclosure starts increasing by 82 percent in May, according to RealtyTrac, the fifth-highest increase in the country.
“This will give the governor the opportunity to correct his mistake in light of a foreclosure crisis that continues to plague New Jersey and threatens to get worse in the coming months,” said Lesniak. “We know that abandoned, dilapidated properties drive down property values and contribute to crime and decay. By putting these homes on the market as affordable housing or at market value, new homeowners and communities will benefit.”
The bill would require the New Jersey Housing and Mortgage Finance Agency to facilitate and finance the purchase of foreclosed residential properties from institutional lenders, and dedicate such properties as affordable housing units or market-rate housing. HMFA would be able to use its bonding authority – without recourse to the state – federal funds and funds from the State Affordable Housing Trust Fund to finance the purchase of foreclosed homes by for-profit and not-for-profit corporations. Some properties could be deed-restricted with the consent of the affected municipality, to be used as affordable housing.
Connect with NJTODAY.NET
Join NJTODAY.NET's free Email List to receive occasional updates delivered right to your email address!