Affordable housing revamp lands on governor’s desk

Lawmakers sent a bill retooling the state’s affordable housing system to the governor’s desk Monday after divided votes in both legislative chambers.

The bill would abolish the defunct Council on Affordable Housing to codify the version of the court-run affordable housing system the state has operated under since New Jersey’s Supreme Court declared the agency all but dead in 2015.

The new system would enact new legal protections for towns that meet deadlines for submitting affordable housing plans, create a spate of bonus credits municipalities can use to reduce their affordable housing obligations, and erect a new court-run system to adjudicate affordable housing disputes.

“Without securing the most basic human needs — a place to live — the other policies we pass cannot be as effective,” said Sen. Troy Singleton (D-Burlington), the bill’s prime Senate sponsor. “Today, I’m grateful we’re collectively poised to take an important and indeed monumental step of ensuring that the best parts of our affordable housing system are set in statute.”

The bill, which passed both chambers in party-line votes, would immunize towns that timely submit affordable housing plans and other documents from exclusionary zoning lawsuits that can force the construction of affordable housing without the approval of local officials.

Municipalities who meet the deadlines could still face challenges that allege they did not follow through on their affordable housing plans, or if portions of the same violate what’s known as the Mount Laurel doctrine. That refers to constitutional case law requiring municipalities to provide realistic opportunities for the creation of low- and moderate-income affordable housing within their borders.

Housing is considered affordable if prices, rents, and related expenses do not exceed 30% of the resident’s gross income. Moderate affordable housing is affordable to residents making between 50% and 80% of their area’s median income, or between 50% and 30% for low-income affordable housing, and less than 30% for very low-income housing.

The bill would set lengthy deed restrictions on newly created affordable housing, requiring rental units created under the program to stay affordable for 40 years, with a 30-year restriction on for-sale units.

“This legislation will help tear down the walls that have denied too many access to opportunity and create new affordable homes near jobs, schools, and transportation,” said Adam Gordon, executive director of Fair Share Housing Center. “It’s good news for families across the state who are struggling to keep up with the soaring cost of housing.

A municipality earns one regular credit for each unit of affordable housing it builds, and towns can earn bonus credits that further reduce their obligations in certain circumstances.

The bill would expand the number and type of bonus credits municipalities can use to offset their affordable housing obligations, creating bonus credits for towns that convert existing market-rate units into affordable ones or extend affordability terms on existing housing.

Municipalities could receive full or partial bonus credits for affordable housing that serves individuals with special needs, age-restricted housing, or housing built on land previously developed for retail or office space, among numerous others.

Bonus credits can be used to meet no more than a quarter of a municipality’s affordable housing obligations.

Republicans and some municipalities have broadly opposed the legislation, cautioning its impacts had not been studied and that the bill could lead to outsized development that would strain local infrastructure or change the character of towns, especially rural ones.

“No one’s done a market analysis to see if the state could even absorb that many homes,” said Sen. Tony Bucco (R-Morris), the chamber’s minority leader. “We can’t be putting municipalities in a position where they’re going to be forced to pave over open space and farmland or develop high-density housing, multi-story housing which will completely change the character of our communities.”

Bucco said the measure would raise costs for municipalities. Other opponents of the bill have charged it would lead to higher property taxes for current residents, though the bill’s sponsors have disputed that.

“The residents in communities surrounding Mt. Laurel developments have continued to experience stable taxes,” Singleton said on the Senate floor Monday, “In fact, a study by Princeton University researchers found no difference in property taxes between Mt. Laurel after it built affordable housing and surrounding communities.”

The affordable housing changes passed alongside a package of narrower bills meant to ease the creation of affordable housing.

Among other things, bills in that package would create a sales tax exemption for materials and services used in the construction of 100% affordable housing developments, allow payments in lieu of taxes for certain affordable housing projects, and create a pilot agreement to help offset affordable housing projects’ property insurance premiums.