To the Editor:

Comparison of the Cost of the Municipal Building Plan for Affordable Housing

with the Cost of River Road Affordable Housing Plans Done in Conjunction with

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Moving the Police Department to an Upgraded Municipal Building

I am trying to raise awareness of the relatively high cost of the proposed Municipal Building Plan for locating 65 affordable housing units at the current Chatham Township Municipal Building site on Meyersville Road in conjunction with building a new Municipal Building at the Police Station site on Southern Boulevard.  I addressed the total cost of the Municipal Building Plan in a recent Letter to the Editor of TAPInto Chatham.

In this letter, I will provide a cost analysis of possible plans to utilize a Township owned property on River Road as a primary site for affordable housing.  The River Road site (Block 62, Lot 71) is a 5.69-acre steeply sloped vacant lot about 50-yards up River Road NE of the Firehouse.  It was acquired at a very low cost via a tax foreclosure and was virtually designated in December, 2018 Affordable Housing Settlement Agreement as the site to be utilized to satisfy the 74 affordable housing units required.  It was envisioned that the affordable housing buildings would be arranged to step up the slope in much the same manner as the nearby Cardinal Hill Apartments.  However, a developer selected for the site said that this was not possible due to the steepness of the slope (17% vs 12% at Cardinal Hill) and submitted a plan for a massive 4-story (plus basement/garage level) structure that Township officials found visually unacceptable.  In the summer of 2019, the River Road site development was abandoned in favor of the Municipal Building Plan proposed by Robert Hoffmann, the new Township Administrator.  That plan was approved by the Township Committee in November but encountered such strong opposition that it was shelved in December while alternatives were explored.

The River Road site is currently being reconsidered as a core element in the development of alternative affordable housing plans.  Integral to the development of these plans is the move of the Police Department to an upgraded Municipal Building.  In this letter, I will show that the original plan to build 74 affordable housing units at the River Road site together with an associated move of the Police Department to an upgraded Municipal Building would cost less than $10M.  

The deteriorated state of the current Municipal Building along with the requirement to upgrade the Police Station to required standards provided two of the selling points for the Municipal Building Plan.  It was argued that the cost of improving the Municipal Building and Police Station was so high that the new Municipal Building was a better alternative financially.  However, that financial analysis did not include some important cost elements that I included in my Municipal Building Plan Cost Analysis published as a Letter to the Editor of TAPinto Chatham.  My analysis showed that even using Township acknowledged estimates, the Municipal Building Plan will cost a total of about $17M or more.

I am not advocating that the Township adopt the originally proposed River Road development plan.  What I am intending to show is that by using the River Road site as the core of a multi-site affordable housing plan, the Township could afford to spend up to $7M to purchase and develop additional sites to produce a multi-site plan that is financially competitive with the Municipal Building Plan and much more socially acceptable.  I don’t know of any member of the public who is demanding a new Municipal Building, but there are an awful lot of aroused citizens who are demanding a multi-site plan that would distribute affordable housing around the Township in a broadly acceptable manner.

Cost of the Police Department Move to an Upgraded Municipal Building

The Township has provided a budgetary estimate of $7,254k as the total cost of moving the Police Department to an upgraded Municipal Building. This includes the repair of the existing building and bringing it up to standard, the reconfiguration of the space to accommodate the Township Offices and the provision of required facility upgrades for the Police Department.  I am not convinced that all of the planned repairs are required, but for our current purposes, it doesn’t matter.  I will use $7.3M as the cost.

Cost of the Original River Road Development Proposal

The River Road property was acquired through a tax foreclosure for the paltry sum of $135,553. (No wonder they jumped at this property!)  For convenience, I will round this up to a land acquisition cost of $200k.  Extending the Township sewer line some distance along River Road (starting at the intersection with Fairmount Avenue) to service the site is the major cost element.  The cost has been estimated to be about $1.7M.  Not all of this cost will be borne by the Township.  A minor part will be paid by the property owners along River Road who will be required to hook up to the system.  The owners of the affordable housing development will also be required to pay for their sewer service, but that is not expected to be sufficient to pay for a substantial part of the sewer extension.  To avoid controversy at this point, I will just assume that the Township will have to pay all of the $1.7M.  In addition, there may be additional engineering and site preparation work to develop the site.  I will allow $300k for those expenses.  Adding these costs yields a total cost estimate of $2.2M.  

Total Cost of the Upgraded Municipal Building and River Road Site

Adding the above estimates for the move of the Police Department to an upgraded Municipal Building and the cost of the original 74-unit River Road development proposal yields a total cost of $9.5M.  For purposes of discussion I have rounded this up to $10M.  I believe this is a rather generous over-estimate of the cost.

Prospects for an Acceptable Multi-Site Plan

Advocates of the multi-site approach do not want a 74-unit development at the River Road site.  However, if 42 to 50 affordable housing units could be sited there in an acceptable manner, only 24 to 32 units would have to be sited elsewhere. 

Using the design parameters of the original River Road proposal as a baseline to scale down to a smaller building with the same footprint, if 74 units could be housed in a 4-story structure, then roughly 54 units could be provided in a 3-story structure and roughly 36 units could be provided in a 2-story structure (based 18 units per floor.)  By using a mixed 2 and 3-story design, almost any number of units between 36 and 54 could be configured.  Furthermore, if the Township were willing to spend some additional money on architectural enhancements, the resulting structure could be made to be much more visually acceptable.  The ultra-low-cost of acquiring this property makes this possible without being considered extravagant.  

To supplement this core River Road development and achieve the required total of 74 units, the Township will have to acquire one or more additional properties to fulfill the public desire for smaller affordable housing developments distributed around the Township.  To provide for the needs of low-income people who do not have their own means of transportation, I believe that properties near Chatham Square should be given the highest priority.  I have suggested at least one prime candidate in that area.  A small wooded property on Shunpike near the corner of Southern Boulevard could support the development of a townhouse-like row of 8 to 10 units.  I have also proposed putting a small townhouse-like row of 8 to 10-units of affordable housing on the grounds of the Municipal Building.  I am sure that other members of the public have additional candidates. 

It should be recognized that small developments may not be as well funded by State agencies as larger developments.  It may be necessary for the Township to subsidize some of the development cost.  However, as with the purchase of land, the low cost of the River Road site would enable the expenditure of a reasonable amount to fund these small developments.

Summary

By using cost estimates that should be acceptable to Township officials, I believe I have demonstrated that the Municipal Building Plan, at $17M, is by far the most expensive option. Almost any multi-site affordable housing plan that builds on the use of the River Road property as a major element will be far less expensive.  The “starting cost” of any such plan is only $10M and any costs for acquiring and developing additional small sites is unlikely to even approach the high cost of the Municipal Building Plan.  The major task at this point is to identify and acquire additional properties that are suitable for a good multi-site plan.

Mike Oien

Chatham Township