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Cascade: No. 58, Summer 2005

RCAs Contrary to the Goals of Regional Equity

Founded in 1975, FSHC is an independent public interest law firm and policy center that promotes racial and economic integration in communities through regional housing policies and enforcement of the Mount Laurel doctrine.

Editor’s Note: Another perspective on RCAs will appear in a future issue of Cascade.

New Jersey has long been at the forefront of regional equity. Well before that term was coined, the New Jersey Supreme Court ordered the state’s municipalities to fill their fair share of the region’s need for affordable housing in the landmark Mount Laurel I (1975) and Mount Laurel II (1983) decisions. Informed by the civil rights movement and coming shortly after the smoke of the urban riots had cleared, the Mount Laurel doctrine was born in the recognition that racial and economic segregation hurts people of color uniquely and society overall. The court required municipalities to provide affordable housing as part of an effort to solve problems with racial and economic origins. Anything less, the court decreed, would be a violation of the state constitution.

The recognition in 1975 of the doctrine as a constitutional imperative was a bold move. Revisiting the issue in 1983, the court wrote that “the clarity of the constitutional obligation is seen most simply by imagining what this state could be like were this claim never to be recognized and enforced.” If the court did not act, it wrote, “poor people [would be] forced to live in urban slums forever, not because suburbia, developing rural areas, fully developed residential sections, seashore resorts, and other attractive locations could not accommodate them, but simply because they are not wanted.” The court concluded that was “a vision not only at variance with the requirement that the zoning power be used for the general welfare but with all concepts of fundamental fairness and decency that underpin many constitutional obligations.”

Despite the courage shown by the court, the Mount Laurel doctrine’s promise of inclusion has not been fulfilled, and the polarization the court intended to reverse has in fact gotten worse. New Jersey still is at the top of the list of racially and economically segregated states, according to numerous sources.1 Although the doctrine has resulted in significant amounts of affordable housing, and thus accomplished some of its goals, the goal of promoting racial and economic integration, of responding effectively to the apartheid in our state, has not even been seriously pursued by New Jersey policymakers.

The greatest example of the distortion and failure of the Mount Laurel doctrine is the use of regional contribution agreements (RCAs), which are essentially contracts between a municipality that sends its fair share to another municipality along with a check that the receiving municipality can use for affordable housing purposes. RCAs were permitted by the Fair Housing Act of 1985, a piece of legislation that was passed in response to the second Mount Laurel decision. For as little as $20,000, the cost of sending two children to school for one year, suburban municipalities avoid having one lower-income family living within its borders.

The Council on Affordable Housing (COAH), which was established by the 1985 legislation, is the state agency in charge of approving and monitoring RCAs, and it has never met one that it didn’t like. COAH approves RCAs from almost exclusively white municipalities to subsidize the construction or rehabilitation of affordable housing in municipalities that are almost exclusively home to lower-income people of color. COAH thus sanctions the reduction of affordable housing opportunities in thriving, job-rich communities and replaces it with units in communities that are the most crime-ridden, environmentally unsound, impoverished, dysfunctional, and lacking in employment. This is hardly in keeping with the vision of racial and economic integration set forth by the Supreme Court.

Since 1985, $170 million has been transferred to troubled, deteriorating municipalities with the worst school systems in exchange for relieving growing suburban municipalities of 9000 affordable houses for families. Units are most often sent to municipalities with segregated school systems. In a 2000 study of RCAs, researcher David Rusk determined that the “’sending’ communities averaged almost three times the average income level of the ‘receiving’ communities. The percentage of poor children in the wealthy, ‘sending’ suburban school districts averaged just 6 percent; the percentage of poor children in the poverty-impacted, ‘receiving’ city school districts exceeded 71 percent.” He concluded that “whatever else they may have achieved, rather than opening up mainstream opportunities, the RCAs literally cemented 15,000 to 20,000 poor children into poverty-impacted neighborhoods and school where they are doomed to fail in overwhelming numbers!”2

RCAs rightly remind one of the Civil War practice of paying another person to serve in the military. They operate like pollution credits: polluters purchase pollution credits to permit them to continue to pollute; wealthy municipalities purchase RCA credits to permit them to continue discriminating and to keep out lower-income New Jerseyans. In both instances, the public at large and lower-income New Jerseyans suffer as a result of an arguably legal, but decidedly immoral, economy.

The case against RCAs is getting stronger, and, in addition to challenges in court brought by the Fair Share Housing Center , new allies are joining the fight to abolish them. Residents of distressed municipalities are beginning to realize that RCAs shift the obligation of housing lower-income households on municipalities least equipped to fulfill it. Through the community organizing efforts sponsored by the New Jersey Regional Coalition, a statewide regional equity organizing project, residents are beginning to see that RCAs impose an increased burden on municipal services, raising the overall costs of fiscally strapped cities without adding anything to their tax bases. This fiscal impact is among the reasons why wealthy towns seek to exclude lower-income residents.

Assembly Majority Leader Joseph Roberts, of Camden , one of the most powerful politicians in the state, has shown a committment to fighting RCAs. In legislation sponsored by Roberts passed in 2002, Camden was prohibited from accepting RCAs for five years. Additionally, speaking in Princeton in April 2004, the majority leader announced his intention to abolish “repulsive,” “exploitative,” and “odious” RCAs through an amendment to the 1985 legislation that permitted them. He noted that the cost of rehabilitating housing should not be the reduction of housing in growing municipalities and that we should be able to do both, something that seems likely in view of the relatively minor amount of funding RCAs have generated.

Pennsauken Township and Haddonfield Borough, both near Camden, recently also registered their opposition to RCAs. Pennsauken, which prides itself on its successful efforts to promote stable racial integration, rejected a $3 million RCA offer from a wealthy, growing town. And Haddonfield, itself one of the wealthiest municipalities in South Jersey, pledged to reconsider its decision to send RCAs to poor towns after being pressured by the borough’s clergy.

Much harm has been done by RCAs, but their end is near. The political calculus is changing as grassroots groups and powerful politicians appreciate the wisdom and prescience of the New Jersey Supreme Court when it warned of the consequences of failing to prevent the continued racial and economic segregation of our state. Assembly Majority Leader Roberts reflected and helped advance this movement when he concluded last year that “to advance as a state, we must move forward together — all of us — and not pay others to stay behind.”

For information, contact Kevin D. Walsh, Esq. at (856) 665-5444 or kevinwalsh@fairsharehousing.org.

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