NJ Sued By Dozens Of Towns Over Affordable Housing Requirements

A group of 27 towns is challenging the state's affordable housing policies in a federal court hearing on Wednesday.

The collection of municipalities, known as the Local Leaders for Responsible Planning, are challenging the methods that state officials use for determining housing requirements, calling them unconstitutional.

"This small group of wealthy towns has filed lawsuit after lawsuit trying to block the affordable homes New Jerseyans desperately need, and they have lost at every stage," Adam Gordon, executive director at Fair Share Housing Center, said.

The hearing comes after dozens of towns were unable to reach agreements on housing by a Dec. 31, 2025 deadline due to what Fair Share said included "bad faith interpretations of the law."

According to Local Leaders, the Fourth-Round affordable housing law "overdevelops...communities with high-density housing, which overburdens...infrastructure and public schools."

On Sept. 30, 2025, a New Jersey judge dismissed an earlier claim brought forth by 28 towns looking to overturn the law. Led by Montvale, the suit was filed in 2024, and claimed that New Jersey's updated affordable housing law violated the state constitution's requirements under the Mount Laurel doctrine.

The suit also alleged that an "unconstitutional structure" was being used to place affordable housing determinations in the hands of unelected officials-including so-called 'experts.'"

Under the new affordable housing law signed by Governor Phil Murphy in March 2024, towns would be able to meet requirements with credits, financing options, and new bonuses.

Superior Court Judge Robert Lougy, in dismissing the suit, ruled that the participation in the program remains "fundamentally voluntary." The towns contended that their risk of losing immunity to builders' remedy lawsuits made them feel constricted and not free to make their own choices.

Such lawsuits can result in developers having little constraints over what they build and where in a neighborhood.

"We're confident that the federal court will once again reject these efforts, and uphold a law that is already working, with more towns than ever planning affordable housing in ways that strengthen local economies and fit their communities," said Gordon.

Prior to the hearing on Wednesday, the towns involved in the dispute were still required to file a revised housing plan by March 15.

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