WEST CAPE MAY — This is a town where residents of low and moderate incomes can fall asleep at night near the ocean. If one of those residents needs a new roof or heating system, the local government is there to help. There is even a separate home for the low-income disabled.

These features also helped the town conform to state affordable housing mandates, and most of the bill was not footed by local taxpayers.

Towns throughout New Jersey have struggled to supply affordable housing since the state began mandating it after the landmark 1983 Mount Laurel state Supreme Court decision. This became especially true at the shore as real estate prices skyrocketed.

So how does West Cape May, with an average residential assessment of $504,000, make it work?

It took a court ruling and a creative approach to solve the problem, but while other towns are struggling to meet state Council on Affordable Housing mandates, the borough is poised to supply more units than it needs to by a 2014 deadline. What’s more, it got state programs and private enterprise to fund much of the mandate.

To be fair, the COAH program has been in and out of the courts. Gov. Chris Christie, at one point, tried to abolish it but was not successful. Some towns simply stopped working on supplying the housing pending the outcome of the litigation.

After being sued for its lack of affordable housing, the borough was under a judge’s order to come up with a program, so it had to continue even as the future of COAH was unclear.

It has paid off. COAH has new life after a favorable court ruling, and the borough is meeting its obligation to supply 23 units by 2014.

“It’s all good. We met our obligation. Most towns are sitting around waiting for the rules and didn’t get anything done,” Mayor Pam Kaithern said.

The way the borough did it could give other towns some guidance.

It picked up seven units by turning a vacant borough-owned lot on Fifth Avenue into a home for the low-income disabled. The efficiency units each have a living room, bathroom and kitchen. The ground-floor units are handicapped assessible. There is a community room on the ground floor.

Construction cost $1.5 million, but $1.2 million came from the state’s Housing & Mortgage Finance Agency using a fund to create housing for people with special needs. The borough was getting no revenue from the empty lot and now receives a payment in lieu of taxes of $1,800 a year.

The borough also created a program to allow 10 “accessory apartments” that can be made in garages, above retail businesses, in existing homes or new construction. The borough has two accessory apartments completed and is on the lookout for more willing landlords.

This program pulled in private enterprise, because a landlord can create units that would not normally be allowed by building codes by agreeing to rent them for 15 years to people of low or moderate incomes. The draw is subsidies of $25,000 to $75,000 per unit for landlords to supplement lower rents and construction costs. After 15 years the landlord is free to do what they want with the unit, including renting them at market rates. These are units that normally would not be allowed.

“The key is they aren’t allowed by zoning,” Kaithern said.

The borough isn’t using local tax money. The subsidies are funded by a new “builder’s fee” assessed on new residential and commercial construction. This is a fee that builders pass on to buyers.

“It’s not coming out of tax dollars. Buyers into our community help pay their share for affordable housing,” Kaithern said.

A third program helps lower-income homeowners rehabilitate their homes. COAH translates such programs into affordable units provided, and the borough is using it to get credit for at least 10 units. Local taxpayers are not footing this bill, either. The borough is using the local builder’s fee and a $200,000 grant from the state Department of Community Affairs. The homeowners get no-interest loans that are paid back when the house sells, at which time the money goes into a revolving fund to get loaned to somebody else.

“It can pay for a new roof, windows, plumbing and basically to bring houses up to code. If people have their heater break, we can help them out, which is nice in a small town,” said Lauren Vitelli, the borough’s municipal housing liaison.

A 2005 lawsuit spurred the borough to act. The Mount Laurel decision led to a 1985 state law, the Fair Housing Act, which resulted in the formation of COAH and each town being mandated to provide a certain number of affordable units. COAH came out with its first round of requirements in 1987, a second round in 1999, and a third in 2008.

The borough did not have an affordable housing plan during most of this time. Towns without plans were left open to being sued by developers who wanted projects with densities far in excess of local zoning. The so-called “builder’s remedy lawsuit” allows higher densities as long as a percentage of the units are affordable.

In 2005, a group called Sixth Street Partners proposed a 70-unit development on 5.8 acres on Sixth Avenue, where sewer restrictions and local zoning allowed only seven units.

This led to a drawn-out lawsuit in New Jersey Superior Court that ended in 2009 when Judge William Nugent determined 70 units was too much density and denied the builder’s remedy.

Sixth Street Partners and the borough spent thousands of dollars in legal bills, which is too often the case with affordable housing in New Jersey.

“The shame is there is so much money batted back and forth with legal bills, planners and architects instead of going into the housing,” Kaithern said.

In the end, it helped force the borough to get creative and come up with a way to find affordable units in a town where the average residential assessment is more than $500,000. Kaithern noted the Sixth Avenue property is now going to be several single-family homes.

“It’s worked out well for us. We were really fortunate,” Kaithern said.

Contact Richard Degener:

609-463-6711

More than 30 years’ experience reporting and editing for newspapers and magazines in Illinois, Colorado, Texas and New Jersey and 1985 winner of the Texas Daily Newspaper Association’s John Murphy Award for copy editing.