To the editor:
The Hopewell Township Committee did not undertake a long-term financial projection or study of the demographic impact of their affordable housing decisions. Let’s start such an analysis here, in the open.
First, the expense side. At the April 11 meeting, Deputy Mayor Julie Blake claimed that a 100 percent development of 70 affordable homes would have cost the township $30,000,000, a number undoubtedly meant to scare away objectors. I believe that number is high, but let’s accept it here. At the June 11 meeting, the township confirmed that it had the legal authority to bond that amount within its caps. Such a project was do-able.
On the other side of the ledger: inviting developers to construct those 70 affordable homes also brings 280 market-rate homes into the township. That number is exact.
The proposed 280 new homes will generate tax revenue. Assumption #1: The new market-rate homes will pay on average $10,000 per year in taxes. That generates $2.8 million a year.
Assumption #2: Each new, market-rate home will have 1.3 kids (or 364 new children). This important number may be much higher. The new market-rate homes will likely attract young parents excited about Hopewell Valley schools.
Assumption #3: 300 of these children are of school age.
Each child costs on average about $17,800 a year to educate in the local school district. If the three assumptions above are correct, the yearly school cost of 300 children is $5.3 million.
The municipal budgets will also grow. Assumption #4: Pro-rating municipal budgets for 280 additional market-rate homes with 924 inhabitants raises those budgets by 4.8 percent or approximately $1.1 million.
The net inflows total $2.8 million. Outflows are $6.4 million. Total budget impact of 280 market-rate units: $3.6 million.
I have not included the taxes and costs associated with the affordable units. Those are court-mandated obligations that had to be met.
I have long advocated that we lower that annual financial burden by building in at least one location 100 percent affordable housing, by far the most popular option in New Jersey. These numbers suggest that it pays for itself in approximately 8 years – quicker if the construction costs are lower.
Using those same four assumptions, the 2,881 market-rate homes that the township secretly negotiated will generate 9,500 people, 3,745 children, and 3,000 children of school age. The impact on local government budgets? Approximately $36 million per year. By all means, check my math. Each 100 percent affordable development of 70 units shaves $3.6 million per year off that burden.
An increase of that many children will also overwhelm the schools, requiring much new building. I am not including such costs, but they would also be substantial.
I have made my estimate of a $36 million per year impact in good faith. The township now has some explaining to do.
On June 11, the Township emphasized that it wanted to wait for their Affordable Housing Pilot program to estimate the number of school-aged children per home. That’s another way of acknowledging that they signed these developer contracts without understanding or hiring a professional to estimate the massive financial and demographic consequences of their decisions. Not the financial stewardship about which they brag.