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Affordable Housing Trust Funds
On July 24, 2012, COAH began working with municipalities to quantify the amount of unspent and/or uncommitted funds that must be transferred to the statewide affordable housing trust fund. Initially, this amount is calculated using the first-in-first out (FIFO) accounting principle. The first step in this process was to identify the account balance for each municipality as of July 17, 2008 (the date the Fair Housing Act was amended). Next, the amount of funds that each municipality has actually spent (as opposed to obligated, encumbered or committed) from July 18, 2008 to the close of business on July 17, 2012 were identified and then subtracted from the July 17, 2008 account balance to arrive at a remaining balance that was to have been expended or committed for expenditure during that four-year period. All of this information is based on self-reported monitoring entered into the online record-keeping system (CTM) used by all municipalities to track local affordable housing trust fund accounts. These three figures are listed for each impacted municipality in tabular form via the link to the right called “Trust funds to be spent and/or committed for expenditure by July 17, 2012.”
To ensure the accuracy of this process, letters were sent to each municipality requesting that the Mayor complete and sign a certification verifying the figures included in municipal monitoring reports. A sample of this letter is available through the link to the right. These letters provided a summary of trust fund monitoring provided by the municipality that included the trust fund balance as of July 17, 2008, the amount reported as spent during the four years subsequent to July 17, 2008 and the resulting balance that was to have been spent or committed to be expended by July 17, 2012. The letter recognized that in some cases, this information might not be correct because it is based on municipally generated reporting that may not have been recently updated. Where the figures are known to be inaccurate, the letter indicates that the municipality must update its trust fund monitoring immediately and provide COAH with a bank statement for the month of July 2012 so that accurate numbers can be determined based on an account reconciliation. The figures included in the letter sent to each Mayor are included in the link to the right called “Trust funds to be spent and/or committed for expenditure by July 17, 2012.”
Recognizing that some municipalities may have contractual commitments that encumber some of the funds that were to subject to the 2008 law, each municipality has been given an opportunity to demonstrate these commitments by providing COAH with documentation substantiating either a legally enforceable agreement entered into by the municipality with a third party or other documentation that demonstrates a firm and binding obligation by the municipality to spend trust fund monies in a manner consistent with the municipality’s fair share plan, the Fair Housing Act, and all applicable regulations.
On August 10, 2012, the Appellate Division issued an order concerning remittance of trust fund dollars pursuant to the above process. That order, available here, is currently in effect.