Murphy, legislators: Revamped affordable housing rules will have huge impact

Bill alters process for municipalities to meet Mount Laurel obligations in what some are calling most significant housing legislation in 4 decades

Calling it landmark affordable housing legislation that will support towns in meeting their affordable housing obligations, Gov. Phil Murphy on Wednesday signed legislation that develops a new system for municipalities to meet their Mount Laurel affordable housing obligations, replacing the current process that exists entirely in the courts.

Murphy said the bills will help him meet a goal for his administration: Becoming a national leader in expanding affordable housing.

“With today’s bill signing, we will be able to create more certainty and lower costs in New Jersey’s affordable housing landscape,” he said. “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.”

The primary bill (A4, S50) establishes a new, streamlined framework for determining and enforcing municipalities’ affordable housing obligations under the New Jersey Supreme Court’s Mount Laurel doctrine and the state’s Fair Housing Act.

Starting with the compliance period that begins in 2025, the Department of Community Affairs will publish nonbinding calculations of municipalities’ current and prospective need for affordable housing using a formula based on prior court decisions. Disputes about municipalities’ affordable housing obligations and plans to meet those obligations will be resolved on an expedited basis by the judiciary, with assistance from a new dispute resolution program.

This process will replace the role previously played by the Council on Affordable Housing, which has been defunct for over a decade and is formally abolished under this bill. The new process will streamline compliance and reduce litigation-related delays to the construction of new affordable housing and will give municipalities and developers more certainty, which will enable smarter planning around where housing should be built.

As part of this process, the bill contains provisions outlining how municipalities may receive “bonus credits” that allow units of affordable housing to be credited as 1.5 or 2 units in certain circumstances. This bonus credit system incentivizes age-restricted housing, housing set aside for individuals with special needs and other location- or purpose-specific housing projects, such as housing near mass transit stations. The bill caps the use of bonus credit units at 25% of a municipality’s prospective need obligations and establishes related parameters for how much of a municipality’s obligations must be satisfied through housing available to families with children and through rental housing.

The bill was sponsored by Assemblywoman Yvonne Lopez (D-Perth Amboy), Assembly Speaker Craig Coughlin (D-Woodbridge), Assemblyman Benjie Wimberly (D-Paterson), Assemblywoman Verlina Reynolds-Jackson (D-Trenton) and Sen. Troy Singleton (D-Moorestown), Senate President Nick Scutari (D-Clark) and Sen. Teresa Ruiz (D-Newark).

Additional bills signed include:

  • ACS for A2267/SCS for S1415 (Lopez, Asw. Annette Quijano, D-Elizabeth; Singleton, Sen. Brian Stack, D-Jersey City), which requires the New Jersey Housing Mortgage and Finance Agency to establish a pilot program to support insurance premiums for eligible affordable housing projects constructed by for-profit affordable housing developers.
  • S1422/A3365 (Singleton, Sen. Shirley Turner, D-Ewing Twp.; Lopez, Asw. Shanique Speight, D-Newark, Asm. Clinton Calabrese, D-Ridgefield), which allows taxpayers to accelerate depreciation of eligible property expenditures in connection with construction of new affordable housing developments in order to realize cost savings. 
  • A2296/S2309 (Lopez, Wimberly; Sen. Angela McKnight, D-Jersey City, Stack), which allows a municipal governing body to delegate to the municipal clerk the authority to issue certain approvals to facilitate development of affordable housing projects. 
  • A3337/S2312 (Wimberly, Reynolds-Jackson, Quijano; Stack, Singleton), which permits “payment in lieu of taxation” agreements between municipalities and affordable housing projects that receive funding through the State Affordable Housing Trust Fund or municipal affordable housing trust funds. 
  • A1495/S1484 (Asm. Robert Karabinchak, D-Edison, Lopez, Asw. Lisa Swain, D-Paramus; Sen. Joseph Lagana, D-Paramus, Sen. Patrick Diegnan, D-South Plainfield), which exempts receipts from sales made to contractors or repairmen of materials, supplies or services related to the construction of 100%-affordable housing projects in order to help reduce costs for the construction of such projects.

“Affordability has been the cornerstone of the efforts we have taken in the Legislature to address the challenges our residents face every day,” Scutari said. “This initiative will allow us to develop additional affordable housing in New Jersey and make the system more workable. These bills make real progress in making housing more accessible and affordable for residents in communities throughout the state.”

Coughlin agreed.

“We have an obligation to expand opportunities and make housing more affordable in our state,” he said. “When more families are secure in homes of their own, they contribute to their communities and our economy thrives. This legislation strikes the right balance in incentivizing opportunity and providing support for municipalities.”