What The New Affordable Housing Law Means For NJ Homeowners

NEW JERSEY - Gov. Phil Murphy has signed a landmark bill slated to change the way the number of mandatory affordable units are decided for municipalities.

Touted as a significant reform for one of the most expensive states in the nation, the legislation 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 lifted from a 2018 state Supreme Court decision.

“One of our Administration’s top priorities has been to establish New Jersey as a national leader in expanding affordable housing,” Murphy said Wednesday. “With today’s bill signing, we will be able to create more certainty and lower costs in New Jersey’s affordable housing landscape.”

Starting in 2025, the Department of Community Affairs will be tasked with issuing towns’ obligation numbers under the New Jersey Supreme Court’s Mount Laurel doctrine and the state’s Fair Housing Act based on the 2018 decision, which weighted factors like developable land, property values and household growth. The legislation is expected to determine housing obligations much quicker than in years past, which saw some decisions arise only after lengthy and costly settlement processes.

$16 million has been earmarked to fund the new 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.

Disputes about towns’ affordable housing obligations and plans to meet those obligations will be resolved on an “expedited basis” by experts on a state panel to manage any challenges to the new formula.

The bill also bans regional contribution agreements — in which towns pay neighboring municipalities to bolster their affordable housing stock instead. Under the legislation, municipalities must meet deadlines to outline where affordable housing will be zoned, what type of housing would be permitted in those area and more.

“By establishing new processes and practices for towns to meet their Mount Laurel affordable housing obligations, we are able to more quickly and efficiently allocate funding to municipalities and support those building affordable housing in our state," Murphy added. "I am proud that my administration and the Legislature have enacted a coherent and workable framework that no longer leaves this issue exclusively to the courts.”

You can read the full text of the legislation here.