New Jersey lawmakers plan overhaul of affordable housing system

New Jersey lawmakers unveiled legislation to retool the regulations governing the construction of affordable housing in the closing days of the Legislature’s lame-duck session, just months before towns and cities face the fourth round of their affordable housing obligations. 

“For far too many people, the American dream of homeownership, which represents generational wealth, has been more fantasy than reality,” said Sen. Troy Singleton (D-Burlington), the bill’s prime Senate sponsor. “Our objective here today is to bring that full circle so that everyone, no matter where they live, no matter where they come from, can find a home here in the State of New Jersey.”

The bill unveiled Monday would sunset the largely defunct Council on Affordable Housing, transferring some of its regulatory powers to the Department of Community Affairs and the New Jersey Housing and Mortgage Finance Agency.

Other oversight would remain with the courts, which have had oversight over affordable housing obligations since declaring the council “moribund” in 2015. The court would appoint new regional special masters to determine affordable housing needs in North, Central, and South Jersey.

The bill would still allow towns to determine their own affordable housing obligations, but they would be required to consider their special master’s findings when doing so.

“We know the Council on Affordable Housing did not work. Although the current court-led system increased production, it has also resulted in a process that has been costly and lengthy for municipal partners,” said Assemblywoman Yvonne Lopez (D-Middlesex), the bill’s prime Assembly sponsor. “Moving forward, this bill offers a clear and comprehensive pathway towards meeting our shared housing goals.”

Residents and others could challenge a town’s affordable housing plan if they believe its current and future affordable housing obligations do not meet the requirements set by the bill.

The bill would create the Affordable Housing Dispute Resolution Program, whose membership would be appointed by the chief justice of New Jersey’s Supreme Court, to resolve such challenges.

Towns that meet affordable housing deadlines and follow the program’s provisions would have immunity to builder’s remedy lawsuits. Such suits are filed by developers seeking to circumvent local approval for affordable housing projects, often in municipalities with affordable housing plans.

The bill would not affect any ongoing builder’s remedy suits, said Assembly Speaker Craig Coughlin (D-Middlesex).

Nor would the legislation allow the return of regional contribution agreements, which allowed towns to trade affordable housing obligations with one another. Lawmakers barred the practice in 2008 after wealthier towns offloaded their obligations to poorer neighbors, worsening segregation.

“It’s a failed process, and I don’t see it being reincarnated,” Coughlin said.

The bill would exempt municipalities eligible for state aid based on the number of resident children enrolled in the Aid to Dependent Children Program, lower property valuations, and existing public housing aid if they have more low- and moderate-income housing than regional peers, are sufficiently dense, or have sufficiently few vacant parcels of land.

The state marked roughly 60 such municipalities, called qualified urban aid municipalities, in 2022. The list includes urban centers like Camden, Newark, and Paterson, among some wealthier towns like Montclair that are kept on the list due to state budget language.

For the most part, the number of low- and moderate-income housing units within a municipality will determine whether it has met its obligations under the Mount Laurel Doctrine, a series of court decisions that found New Jersey towns and cities must allow and provide for low- and moderate-income housing within their borders.

The bill would allow a given municipality to fill up to half of its affordable housing obligations through bonus credits, which towns can earn for age-restricted housing, housing near public transit, or housing used by residents making less than 30% of the area’s median income.

The Fair Share Housing Center, which sues towns to enforce affordable housing obligations, met Monday’s announcement with measured enthusiasm.

“The key principles announced this morning, including expediting the process to build affordable homes, abolishing the failed Council on Affordable Housing, and continuing to ban Regional Contribution Agreements, offer a promising framework for moving forward,” said Adam Gordon, the center’s executive director.

In New Jersey, affordable housing is housing whose price or rents can be met by moderate-income households — those making between 50% and 80% of their area’s median income — or low-income households, those making 50% or less.

The court-run affordable housing system has been successful in increasing New Jersey’s affordable housing stock, which has doubled to roughly 100,000 units since the courts declared the council defunct in 2015.

But that growth still leaves New Jersey roughly 200,000 units short of its affordable housing goals, and it’s not clear when the state expects to meet those goals.

“There is no one silver bullet to affordable housing production,” Singleton said.

A breakneck pace

The Democratic leaders said they would work to approve the bill before the lame-duck session ends at noon on Jan. 9. That timeline leaves little room for public hearings on an issue that has been controversial in New Jersey for close to half a century.

The Legislature is not expected to meet between Christmas and New Year’s Day, and it’s unclear whether the Assembly Housing Committee will consider the bill at its Wednesday meeting. The Senate had no committee meetings scheduled through the end of the lame-duck session as of Monday morning.

Legislative schedules can shift with little notice during the lame-duck session, and it’s possible the bill will go from a committee hearing to the governor’s desk all within the first week of January.

It’s not likely to stall on Gov. Phil Murphy’s desk. The governor, through a spokesperson, applauded the pending legislation Monday.

“The Governor looks forward to constructively engaging with the Legislature on this legislation and is hopeful that a final version can be enacted into law before the end of the current legislative session,” said Bailey Lawrence, the spokesperson.