Christina Foglio, founder of Community Investment Strategies.

While many New Jersey towns are struggling to determine the amount of affordable housing they need to provide, Plainsboro has taken the next step towards getting affordable units actually built.

Last December, the town cut a deal with Community Investment Strategies, a for-profit builder based in Lawrence Township, to help meet Plainsboro’s latest fair share obligation. The township planning board approved the The Place at Plainsboro at its meeting on March 20.

In contrast to West Windsor and a group of three other Mercer County towns that remain embroiled in Mercer County Superior Court, where a judge will decide their affordable housing obligations, Plainsboro reached a legal settlement last year with the Fair Share Housing Center that established an obligation of 638 units through 2025. This includes 191 units that have already been built.

FSHC is the Cherry Hill-based nonprofit that has sued towns throughout the state to force the construction of more affordable housing.

CIS will be responsible for securing funding, and then building and managing the 100-unit affordable development. The Place at Plainsboro is the largest single source of new affordable units within the new fair share plan accompanying the settlement.

The township has labeled the project a “municipally sponsored” development, and the town’s primary contribution is providing the land: a 30.7 acre parcel on Dey Road between Wyndhurst (the township’s other municipally sponsored affordable housing development) and the Meadows at Middlesex Golf Course. In addition, the project will initially be exempt from property taxes. CIS will pay the town an annual payment in lieu of taxes equal to five percent of the project’s gross rent. The estimated annual PILOT is $34,000 for the project’s first phase of 70 units.

The New Jersey constitution and decisions by the state Supreme Court mandate that every town provide affordable housing. A primary concern for many suburban towns is the high rate of residential growth that can come with affordable housing. More residential development invariably requires more taxpayer-supported public services down the road.

Plainsboro’s settlement with the Fair Share Housing Center stipulates that construction of the all-affordable site must begin by the end of 2018.

This results from inclusionary zoning in which towns give builders an economic benefit (e.g., allowing them to build a higher density of housing) in exchange for the construction of affordable units. In other words, developers shoulder the cost of building affordable units as part of their overall development, but as a trade off are allowed to build at a greater density overall. A common ratio is four market rate units to subsidize the cost of every affordable unit.

Like the 126-unit Wyndhurst, the CIS development consists of 100 percent affordable units. If completed, the project would represent an alternative mechanism for providing affordable housing without a large number of accompanying market rate units.

If Plainsboro had provided for all of its affordable housing through inclusionary zoning, it could have resulted in a total of more than 3,000 total units being built in the township. In contrast to CIS’ 100-unit all-affordable project, also included in Plainsboro’s fair share plan is a 394-unit inclusionary project at Forrestal Village that only provides 50 affordable rental units.

“I think you may see some strategies where all-affordable projects might give towns the quick hit to meet their fair share obligation,” said Christina Foglio, the founder and CEO of CIS. “For all affordable (housing), you have to have land. Towns could have to pay, and it could be difficult to finance.”

CIS is the only woman-run affordable housing development company in New Jersey. Foglio’s company has development, construction and management components. Previously based in New Brunswick and then Bordentown, Foglio says CIS has 300 employees and has built more than 3,000 units.

The CIS website lists 30 projects, including multifamily affordable developments in Gloucester, Middlesex and Ocean counties. Roughly half the projects are affordable housing for seniors, and the company owns and manages an assisted living site in Bordentown.

The current headquarters of CIS is located in a first-floor office in Heritage Village on Business Route 1 in Lawrence Township. The mixed-use project is located on the site of the former Trent Motel and it was developed by CIS and The Eagle Group, an office design company in Springfield Township. There is 7,031 square feet of first-floor retail and office, and 64 age-restricted rental apartments (all affordable units) on the second and third floors.

Plainsboro’s agreement with CIS is for a multifamily development with no age restrictions, and will remain affordable for at least 30 years. It will include 20 one-bedroom units, 50 two-bedroom units and 30 three-bedroom units. Half the units will be moderate-income units, while the other half will be low-income units. Thirteen very low-income units will be restricted to households with incomes below 30 percent of the area median.

Families that earn less than 50 percent of the median household income in the Middlesex-Hunterdon-Somerset region qualify as low income. Families making between 50 and 80 percent of the median household income qualify as moderate-income households. As of 2014, median income is defined as $73,500 for a one-person household, $84,000 for two-person, $94,500 for three-person and $105,000 for four-person.

Plainsboro’s settlement with the Fair Share Housing Center stipulates that construction of the all-affordable site must begin by the end of 2018.

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The biggest obstacle for all-affordable sites is the lack of funding. The main funding mechanism for the CIS development in Plainsboro is the Low Income Housing Tax Credit, a federal subsidy administered through the state Housing and Mortgage Finance Agency. Projects are granted federal tax credits through a competitive application process.

Under the program, the affordable housing developer raises immediate capital by selling tax credits that investors, usually financial firms, can apply over a 10-year period of time. For example Foglio says, one residential unit may cost $100,000 to build. An investor could pay $80,000 upfront for a tax credit that gives a $9,000 reduction in federal income tax per year for 10 years. The investor also receives an equity stake in the housing development, and the developer can use the $80,000 to offset construction costs.

In 2015, 48 applicants made it to the final round, and the agency approved funding for 25 projects. That year, CIS received LIHTC credits for a 60-unit rehabilitation project in Union. The total project cost was $16 million, and roughly three quarters of the cost was offset through the sale of the tax credits.

For the Plainsboro project, applications are due in May, and Foglio says it may take more than two years to actually receive an award.

She adds that the already competitive tax credit application process may intensify due to the the wave of legal settlements municipalities are reaching with FSHC. More settlements could lead to more all-affordable projects.

Foglio is from Delran. Her dad worked at an engineering firm and her mother was a community college math professor.

An economics major at Rutgers, Foglio first got involved in urban planning in the 1980s during an internship with New Brunswick mayor John Lynch. Also a powerful state senator, Lynch sponsored the New Jersey Fair Share Housing Act of 1985, legislation which created the Council on Affordable Housing and made the “fair share” provision a state constitutional requirement.

‘Development trends have changed… Rental units are replacing the condo market and urban centers are more popular.’

Foglio went on to serve as head of economic development under Lynch. She also was president of the nonprofit New Brunswick Development Corporation. Before founding CIS, Foglio served as the executive director of the New Jersey Housing and Mortgage Financing Agency from 1992-1995, and she also chaired COAH. She currently lives in Princeton with her husband, former Trenton Mayor Doug Palmer, and their daughter, Laila, who attends the Chapin School in Lawrence.

“I came at urban planning from a fiscal-impact perspective,” Foglio said. “Many planners are from a design or policy background. There wasn’t even the title ‘economic development’ when I started out. There is a lot of economic context, where you understand what’s driving the economics of the city, and then layer on design criteria and the like.”

One example is a cultural center proposal.

“I was asked to look at it in terms of fiscal impact of every dollar spent on art,” Foglio said. “Although it meets all these public purposes, how do you look at the use as to how it supports the economic foundation and what was being generated?”

Foglio says she takes a similar approach as an affordable housing developer.

“Beyond the first level of public purpose, providing a need, I think about how affordable housing helps the economy,” Foglio said. “Seniors tend to spend locally, at places within a reasonable distance. Dollars from an affordable senior project have more impact locally than a market rate project. The diner and pizza place across the street from Heritage Village were probably saved.”

CIS is a for-profit builder, where the company’s owners put in their own money for a project in anticipation of an investment return. Nonprofit affordable housing builders must fundraise, something Foglio was not interested in.

“To build affordable housing, you have to give guarantees,” said Foglio, referring to affordable rent restrictions. “Builders have to wait to earn a return.”

When she was pursuing her master’s degree in planning in the mid-1980’s, Foglio recalls a professor saying the state’s Fair Share Housing Act would be known as the “full employment act for planners and lawyers.” His observation proved prescient. Municipalities across the state are embroiled in litigation as the judiciary oversees planning compliance with the state’s affordable housing requirements.

“I’m hopeful that the next governor’s administration might take a more aggressive role towards affordable housing,” Foglio said. “My hope is there will be new sources from the state.”

Not only is the compliance process more costly and time consuming after the demise of COAH under Gov. Chris Christie, but the days of towns receiving one to two million in state subsidies for an affordable project are long gone.

“Originally, the idea was the state would be your partner in providing affordable housing, that there were mechanisms that towns would do this without significant distress,” Foglio said. “The state had an affordable housing fund, which hasn’t been funded in 20 years. There used to be a program called Balanced Housing. It was funded by the real estate transfer tax, but the governor used those funds to balance the state budget.”

A lot has been learned in the past 30 years, Foglio said. “COAH has ruled that towns playing the ratable chase cannot only grow commercially and put housing costs to other towns. The economic discrimination of projects, like only zoning for corporate parks, led to economic and race based exclusion,” she said.

In addition to more state funding to support affordable housing, Foglio thinks a comprehensive reevaluation is needed.

“Development trends have changed. What is the appropriate way to integrate affordable housing? Rental units are replacing the condo market and urban centers are more popular,” Foglio said. “Proponents of more affordable housing in the suburbs base it on access to good schools. I don’t think housing policy should be based on schools. I think the state needs to focus on an inclusive urban policy that includes improving schools everywhere.”