Comprehensive Guide to NJ’s New Affordable Housing Law for Municipalities, Planners, Developers, Advocates, and Residents

Today, Fair Share Housing Center (FSHC) and the Housing and Community Development Network of NJ (the Network) are co-publishing a new report to help local officials, planners, developers, advocates, and residents understand and participate in New Jersey’s affordable housing development process. This publication updates and expands on the 2015 report published by HCDNNJ following the NJ Supreme Court’s Mount Laurel IV decision, which reinvigorated enforcement of the Mount Laurel Doctrine.

In New Jersey, the obligation to create affordable homes is recalculated every 10 years in cycles known as Rounds. Those obligations are determined by looking at the growth of low- and moderate-income households in the various regions of the state, producing an individualized requirement for affordable housing in each municipality. Towns are encouraged to engage in the process and create their own fair housing plans that realistically zone for their fair share of affordable housing.

Ahead of the Fourth Round of Obligations starting in 2025, Governor Murphy signed landmark legislation (A4/S50) in March that sets a course for future enforcement of the Mount Laurel Doctrine by streamlining the affordable housing development process and codifying the methodology used to determine each municipality’s obligations. The legislation’s primary sponsors were State Senator Troy Singleton, Senate President Nicholas Scutari, Senate Majority Leader Teresa Ruiz, and State Assemblymembers Yvonne Lopez, Speaker Craig Coughlin, Benjie Wimberly, and Verlina Reynolds-Jackson.

In October, the New Jersey Dept. of Community Affairs (DCA) released calculations on the number of affordable homes each municipality is required to allow over the next decade. Municipalities now have until Jan. 31, 2025 to participate in the new Affordable Housing Dispute Resolution Program by adopting DCA’s guidance or providing their own calculation consistent with New Jersey law. Municipalities then have until June 30, 2025 to adopt specific plans for how to address that number.

To assist participants in fair share housing planning at the municipal level, the new report spells out what steps municipalities must take, provides timelines and key dates for Fourth Round planning, and describes opportunities for public comment and advocacy.

The report identifies the principal compliance mechanism options, their key features, and advantages and disadvantages, while using case studies of recent actual developments to illustrate the most common mechanisms. It summarizes several important principles, standards, and rules established in NJ’s new law and pre-existing regulations. The report also addresses the most significant financial resources available to municipalities and provides an update on municipal affordable housing trust funds.

All New Jersey municipalities are encouraged to engage in the process and create their own plans that provide a realistic opportunity for their fair share of affordable housing. Towns that do not participate in the process voluntarily are subject to lawsuits from advocates and developers seeking to require rezoning.

New Jersey law gives towns a wide variety of tools to create affordable housing in the way they prefer. Municipalities can choose from a range of options — including 100% affordable housing, mixed income housing, preservation of existing affordable homes that otherwise would no longer be affordable, and accessory dwelling units that a property owner can place on their property. The recently-enacted law and associated bills give towns additional tools like new bonuses, financing options, and credits to meet their obligation.

By codifying the affordable housing development process, the new law allows municipalities to more efficiently determine their housing obligations. The updated framework increases transparency, while also safeguarding towns’ discretion in deciding how they want to fulfill their fair share obligation. For towns who cooperate with the process, the new law is expected to reduce municipal costs.

“This is an opportunity for municipalities to prioritize sensible and equitable growth, redevelopment, and infrastructure investments that will benefit their communities for generations to come,” said Adam Gordon, executive director of Fair Share Housing Center. “We look forward to working with towns and community leaders to implement the new law and create much-needed affordable homes.”

“Network members and NJ’s nonprofit community development sector have generated more than a billion dollars for our state’s economy, largely through the development of quality affordable homes,” said Staci Berger, president and chief executive officer of the Network. “They are building the homes our neighbors need and deserve, in communities around the state. For decades, many of our members have collaborated with public officials in municipalities across NJ to strengthen neighborhoods and create opportunities for New Jerseyans. Whether they are building first-generation homeownership opportunities and creating generational wealth, creating affordable rents for families, or providing services and safety for neighbors with special needs or experiencing homelessness. This guide will be helpful for expanding those collaborations because together, we can help HouseNJ and make our state a place everyone can afford to call home and thrive. We look forward to working with Fair Share and all of our partners to implement the Fourth Round without delay.”

Read the report: “Developing Effective Housing Plans in The Fourth Round: A Guide For Municipalities, Planners, Developers, Nonprofits, and Residents” at www.hcdnnj.org