Tweaks to affordable housing bill haven’t won over opponents

Senate lawmakers will meet Thursday to consider a new version of a bill to retool New Jersey’s affordable housing system, a plan that contains a raft of new bonus credits, expanded transparency provisions, and a new oversight structure that would place more power in the governor’s hands, among a host of other changes.

Though some of the changes in the new bill were sought by municipalities and affordable housing attorneys who opposed the earlier version — proposed in December, during the waning weeks of the last legislative session — critics do not appear to be won over.

“We think that they haven’t done their homework that they need to do before they adopt such far-reaching legislation,” said Jeffrey Surenian, a land use attorney specializing in affordable housing, adding, “Before you start planning for the future, you need to account for the consequences of the past.”

Despite the additions, large swaths of the legislation remain unchanged.

It would still abolish the defunct Council on Affordable Housing and limit lawsuits to force development in some towns. But in the new version of the bill, calculations municipalities would be required to use to determine their affordable housing obligations would come from the state Department of Community Affairs, instead of from the court-appointed special masters provided for in a prior version.

Affordable housing advocates, who liked the last iteration, remain pleased.

“The revisions are substantial and significant and really seem to take into account both things we advocated for and things other people advocated for. I think overall, they make it a stronger and really workable bill,” said Adam Gordon, executive director of the Fair Share Housing Center. “We’re hoping that it moves quickly and the Legislature passes this so that we can get to work on everybody actually developing affordable housing for the next round.”

The Senate Urban and Community Affairs Committee is set to consider the bill and a package of related legislation at its Thursday meeting.

The new version of the legislation adds five new ways for municipalities to obtain bonus credits offsetting their affordable housing obligations. Municipalities receive one regular credit for each unit of affordable housing built, with bonus credits reducing the total amount of credits required to meet their affordable housing obligations.

Those include bonus credits for development on previously non-residential land, housing built in partnership with a nonprofit developer, developments for which the municipality provides land it pays for, and certain affordable housing that contains at least three more bedrooms than are required under a given development agreement.

Another new bonus credit would allow municipalities to offset their obligations by extending affordability controls on existing affordable housing.

“There are important policy reasons to focus on preservation. There’s instances in which, if you go to stuff that was built 30 or 40 years ago, often it served lower income levels than some of the housing that’s being built now in the aggregate,” Gordon said.

In each of those instances, an affordable housing unit would provide one regular credit and half a bonus credit.

The bill’s detractors say the reduction to a half credit could effectively increase towns’ affordable housing obligations by making it more difficult to max out their bonus credits, which can account for up to 25% of a municipality’s obligations.

“In yesteryear, if you had an obligation of 1,000, as long as you were willing to commit to having 250 rentals, your obligation was effectively 750,” said Michael Edwards, an affordable housing attorney who is a partner at the same firm.

“Now they’re saying that 250, best case scenario, would be 125 [bonus credits],” Edwards added.

Some of the credits that existed in the prior version of the bill have seen changes, too.

Bonus credits for certain affordable housing for people with head injuries, developmental disabilities, and mental illness were broadened to cover all individuals with special needs or who need permanent supportive housing. That provision would now also provide a full bonus credit instead of half a bonus credit.

The newer version of the bill would allow municipalities to claim bonus credits on up to 15% of age-restricted affordable housing, up from 10% last session, and a bonus credit for very low-income housing was narrowed to apply only to units in excess of the 13% municipalities are required to set aside.

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

The new version of the bill tweaked terms on deed restrictions, requiring low- and moderate-income rental units to be restricted for 40 years and for-sale housing to be restricted for 20. The prior bill set that term to 30 years without regard to housing type.

The new bill would also codify limits on bonus credits that exist only in Council on Affordable Housing regulations that the bill would abolish. Those include the 25% cap, a requirement that local governments meet 25% of their affordable housing obligations with affordable rental units without the use of bonus credits, and a rule that restricts a given unit of affordable housing to a single type of bonus credit.

The updated bill includes a bevy of new transparency provisions that would require municipalities to report the collection and spending of developer fees to the Department of Community Affairs to allow residents greater insight into their towns’ funding of affordable housing.

“There is no way to ascertain that now. We try to track data as we can, but that obviously should not be the system,” Gordon said of current law. “That should be public information that’s easily ascertainable. It shouldn’t require [Open Public Record Act] requests or anything like that.”

Other provisions would bar municipalities from spending money collected from those developer fees if they have lost immunity to builder’s remedy lawsuits — these are filed by developers seeking to force a town to allow them to build housing that includes affordable units — as they would by missing certain deadlines set by the program.

Surenian said the bill would increase municipalities’ legal exposure because the bill would immunize towns that observed program deadlines only from builder’s remedy lawsuits and not other exclusionary zoning claims.

“They’re trying to sell it on ‘this will reduce litigation, this will reduce cost.’ The exact opposite is true with all these loopholes for builders to sue you and to even be sued after you got your plan approved,” Surenian said. “The amount of litigation is going to go through the ceiling, and the cost to the public is going to go through the ceiling.”

Such immunity could also expire sooner under the bill, potentially lapsing in early February 2025 instead of on July 1, 2025, as provided by settlements and declarations stemming from suits over the third round of affordable housing obligations.

“The timelines are extremely unrealistic,” Edwards said.