NJ Affordable Housing Rule Changes Pass, Head To Murphy For Signature

NEW JERSEY - New Jersey is one step closer to a law that would change the way the number of mandatory affordable units are decided for municipalities after the Senate passed the bill Monday along party lines. Gov. Phil Murphy is expected to sign the bill, touted as a significant reform for one of the most expensive states in the nation.

The bill, A4/S50, aims to move the responsibility of municipal affordable housing quotas for low- and moderate-income families from court settlements to the Department of Community Affairs, which will rely on a formula for mandatory affordable units derived from a 2018 state Supreme Court decision, according to the bill text.

You can read the full text here.

"There are a number of essential ingredients to a comprehensive planning and implementation response, including the establishment of reasonable fair share housing guidelines and standards ... and continuous state funding for low and moderate income housing to replace the federal housing subsidy programs which have been almost completely eliminated," the bill reads.

$16 million has been proposed to fund the program, which would include a slew of incentives for fixing current affordable units and creating special needs housing, age-restricted units, 100 percent affordable developments and housing for very low income households.

The bill also bans regional contribution agreements — in which towns pay neighboring municipalities to bolster their affordable housing stock instead — and states a panel of three to seven experts will serve on a panel to manage any challenges to the new formula.

"Housing stability removes barriers to getting better education and work opportunities," said Sen. Troy Singleton (D-Burlington), the bill's primary sponsor. "Integrated affordable housing builds stronger communities and connections, while alleviating the burden on social services. And most of all, the next generation grows up in stable homes and safe environments."

The current framework for municipal affordable housing, the Mount Laurel Doctrine, was established after a court ruling nearly 50 years ago, mandating a “fair share” of housing for families based on income and prohibiting towns from enacting zoning laws that prevent the development of affordable housing.

Real estate developers have since used the Mount Laurel Doctrine to file "Builders Remedy" lawsuits to invalidate municipal zoning rules in order to allow large, multi-family developments that are in conflict with municipalities' master plans.

The New Jersey Legislature later adopted the Fair Housing Act in 1984 and created the Council on Affordable Housing — a bipartisan agency of members representing different interest groups — in order to prevent courts from becoming the forum for resolving these land use issues.

Governor Chris Christie attempted to abolish COAH in 2013 and no new appointments have been made to the board since that time. But the New Jersey Supreme Court deemed that this attempt exceeded his authority and that it was unlawful.

The new bill proposes the official termination of the COAH, which terminated operations in 2015.

"The Legislature finds that although the court-led system that has developed since 2015 has resulted in a significant number of settlement agreements and increased production of affordable housing, the system could operate more expeditiously to produce affordable housing, and at a lower cost to all parties," the bill reads, adding the state's affordable housing system would benefit from clear and transparent data behind the new formula.

That fix alone would purportedly eliminate "the lengthy and costly processes of determining those obligations that have characterized both the Council on Affordable Housing and court-led system."

The bill now awaits Murphy's signature, and advocates and officials expect the governor to sign off without haste. While addressing New Jersey's population growth by 30,000 new residents in 2023 during his State of the State address in January, Murphy noted that he intends to sign legislation to make it easier to build more affordable housing in areas close to jobs, businesses and transit hubs.

“We need to put the dream of home ownership and affordable housing back into reach for working New Jerseyans," he said.