Town Topics — Princeton's Weekly Community Newspaper Since 1946.
Vol. LXI, No. 18
 
Wednesday, May 2, 2007
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No Surprises Here: Borough Homes Increasingly Unaffordable, Report Says

Matthew Hersh

As Princeton Borough, along with all New Jersey municipalities, has tied itself in knots attempting to comply with new housing mandates compiled by the state's Council of Affordable Housing, the Borough's Affordable Housing Board has offered a sobering, but hardly shocking, assessment that while towns continue to find new ways to design affordable housing for low- and moderate-income families, average market rate prices are skyrocketing.

And towns like Princeton Borough need to act quickly, according to a report Princeton Borough's Affordable Housing Board delivered to Borough Council last Tuesday.

David Schrayer, board chairman, as well as a local real estate agent, raised eyebrows last week when he approached Council with some alarming figures: the median price of the nearly 500 home sales in the last five years in the Borough was $716,000. With a 20 percent down payment and a 30-year mortgage at 6.25 percent, along with average property taxes at nearly $13,000, that cost of living, Mr. Schrayer said, is only accessible to the top fifth in income in Princeton Borough: a demographic composed of combined household annual incomes of $189,000 and more.

A primary reason for the increase in property values was the tearing down of smaller, "functionally obsolete" houses, and rebuilding larger homes on the same site, for elevated prices. One of the more alarming examples Mr. Schrayer provided in his presentation was a Leavitt Lane house that, pre-teardown, was valued at $355,000, but once rebuilt, sold for $1.5 million.

Another eye-catching example used in the report was a Springdale Road house that was valued at $475,000 before being resurrected as a $2.2 million estate.

This is not good news for Borough residents, who, according to the 2006 New Jersey Municipal Almanac, experienced a 50 percent increase in property taxes between 2000 and 2005.

Though there could be a bright side if the Borough takes a concerted approach toward keeping house sales affordable for middle-income families, Mr. Schrayer said.

"The market will always dictate people's ability to improve their homes or build new homes and sell them for whatever they can, but what we're suggesting is that there might be ways to build new housing that has long-term affordability restrictions that wouldn't be subject to those market pressures," Mr. Schrayer said in an interview.

He added that there could be ways to encourage property owners, for example, through various tax benefits, to donate a property to a non-profit created for this specific purpose, and use charitable donations to offset tax liabilities generated from the sale of other properties —a scenario that would be most useful to a property owner or group selling several properties.

Mr. Schrayer bolstered his case by pointing out that the senior population living largely on fixed income decreased by 17 percent between 1990 and 2000, and that middle-income households were slowly decreasing.

Some members of Borough Council were troubled by Mr. Schrayer's findings, saying that the ideas listed in the report should be further investigated: "I'm really worried about the people who work in this town," said Councilwoman Barbara Trelstad. "They can't live here."

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In other news, Borough Council agreed to a mirror resolution with Princeton Township in splitting the $11,000 cost of an outside accountant to work with the two towns in revising the school's budget, which was voted down last month. However, David Goldfarb, a member of the Borough's Finance Committee, echoed some of his Township counterparts in predicting that any reduction will be less than hoped for by those who voted against the budget: "It's a very daunting task and we have to ask ourselves if we want to make Draconian cuts. If we do, we're going to hear screams from parents with kids in the district."

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