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Lesniak The Free Marketeer

Add the high cost of housing to the list of problems that the government wants to solve that were created by government distortion of the market in the first place. This list includes the high costs of medicine, college, day care, and auto insurance.

In his opinion piece in Wednesday’s Asbury Park Press, state senator Raymond Lesnaik states he wants to introduce a “market driven” affordable housing system. And his idea of a free market?  “we need a larger affordable housing strategy on the state level, which includes development incentives, state support and rational planning guidelines.”  I would hate to see what he calls intervention. His “free market” bill, S1, supposedly eliminates COAH, but actually simply moves all it’s power to the State Planning Commission and hands sweeping new powers to the commissioner of the state Department of Community Affairs.

Former candidate for governor, and former Bogata mayor Steve Lonegan explains:

Re: Exposing the HOAX of Senate Bill One

Reference: The truth about Senate Bill One (1), hereafter referred to as S1. This bill falsely represents itself to abolish the radical Council on Affordable Housing a.k.a COAH.

The following excerpts from S1 debunk the claim that this legislation “abolishes” COAH. S1 actually creates a super bureaucracy that concentrates even more power and money with the State Planning Commission, hereafter referred to as the “Commission.”

S1 empowers the Commissioner of the Department of Community Affairs with sweeping authority to “prioritize” LOW INCOME HOUSING projects and establish “rules” on the management of these projects, in essence establishing a “LOW INCOME HOUSING CZAR.”

I have cited specific passages from the bill and copied these passages directly to this memorandum, including short explanations. The passages speak for themselves. However, it is necessary to provide explanations for those legislators who will be voting on this bill, but appear to have some difficulty comprehending its actual meaning.

Please contact me if you require additional clarification.

The hoax that S1 “abolishes” COAH is exposed on the first page. The bill’s synopsis contains the following sentence in the first paragraph:

”1. (New section) The Council on Affordable Housing established by the Fair Housing Act is abolished, and all of its powers, functions and duties are continued in the State Planning Commission…”

Furthermore, the bill transfers every single prior act, rule and regulation ever promulgated by COAH to the State Planning Commission:

”Whenever, in any law rule, regulation, order, contract, document, judicial or administrative proceeding or otherwise; Reference is made to the Council on Affordable Housing the same shall mean and refer to the State Planning Commission.”

Money, your tax dollars, is the fuel the COAH fanatics need to advance their failed agenda. The following passage, also on page one, clearly defines that all funding is intact:

”All appropriations and other money available and to become available to the Council on Affordable Housing are hereby continued in the commission, and shall be available for the objects and purposes for which such moneys are appropriated…”

These three simple passages from the first page of S1 expose the truth — COAH is simply being renamed. But that is not all. The newly constituted “State Planning Commission” becomes a hybrid super bureaucracy, even more dangerous than COAH as we know it.

I have stated S1 transforms the DCA Commissioner into a LOW INCOME HOUSING CZAR. This is proven in the following passages describing the Commissioner’s power. Start with the maintaining of the “Register” of LOW INCOME projects, this passage defines the term:

“Register” means The Register of Housing Projects directed by section 2 of this act to be established and maintained by the commissioner.”

The “Commissioner’s” power is expanded with the additional ability to “prioritize” these projects and force their implementation:

“The commissioner shall cause to be developed a system for assigning and designating priority ratings to each project included in the register. Priority ratings shall be based upon the following factors, giving to each factor such weight as the commissioner shall judge to be appropriate:”

The list of factors is long and complex and listed in detail in the bill. They include feasibility, distribution of units, desirability, size, etc. Ultimately, the commissioner has control over every aspect of the project. Under the term “desirability” the “Commissioner” could assume the authority to choose paint colors in the units. This is clearly a Low-Income Housing Czar.


The likelihood of Senator Lesniak embracing anything even remotely free market is about the same as that of Osama Bin Laden converting to Judaism. He and his fellow interventionists despise anything free about any market. To them, “free market” means giving them the freedom to distort the market and then empowering themselves to force their poisonous “solutions” on us. For them the problem isn’t high housing costs, the problem is getting re-elected. Their only interest is in buying votes, and they don’t care how much damage they do to us in the process.

Here is my advice to the government on this issue:

If you want to have a healthy real estate market that provides housing choices for people of all incomes there is only one thing you can do and that is STAY THE HELL OUT OF IT!  PLEASE  DO  NOTHING!

Everything the federal and state government is doing is making things worse. The federal government is desperately trying to keep the housing bubble inflated. This way they can pretend that their bailed-out banks are solvent. It may feel good to think your house is worth so much money, but unless you are selling in the next year or so then all it does is raise your property taxes. Meanwhile you are paying enormous state and federal taxes to subsidize mortgages for overpriced houses. Worse still, the federal government is printing dollars at an unprecedented rate in order to sustain basically 0% interest rates. (Unprecedented for the United States by the way. It has been tried in other countries. Zimbabwe and Argentina come to mind.) If we allowed interest rates to be set by the market, housing prices would fall. People would be able to afford housing without government help. It would also encourage more savings, which this country badly needs.

You can’t buy a house unless you have a job. You can’t have productive jobs without  investment capital. You can’t have investment capital without savings. And you can’t have savings with 0% interest rates. They are setting us up for an even bigger bubble. Normally, low interest rates send a signal that it is a good time for business to invest because there is sufficient capital available in the form of savings. Businesses can feel secure that the funding will last until their projects are completed. But our low interest rates are a mirage. The money isn’t really there. This false signal causes all kinds of mal-investments that can only result in recessions and joblessness.

I have news for senator Lesniak and his buddies. Mankind has created housing without your guidance for thousands of years. A true free market will always find the most efficient way to fulfill every human want. In any field, replacing the market with dictates from politicians only results in disaster.

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