Last month, Gov. Phil Murphy signed a landmark measure into law addressing an area of critical importance in the Garden State – affordable housing. “This is a victory that is, frankly, decades in the making,” Murphy said at a signing ceremony for the primary measure Assembly Bill 4/Senate Bill 50. “With this legislation, we are going to – significantly – streamline the process for advancing affordable housing development across our state.”

That lead bill establishes a new 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 – developing a new system to do so, and replacing the current process that runs entirely through the courts.

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

Under the bill, the defunct Council on Affordable Housing is formally abolished. This new process replaces the role COAH previously played.

Officials and lawmakers say the changes will streamline compliance and reduce litigation-related delays for the construction of new affordable housing as well as will give municipalities and developers more certainty – enabling better planning and strategy around affordable housing construction.

‘Clearer guidance’

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

“Housing is the most basic of human needs, and without first securing that need, other policies that we implement cannot be as effective,” said Senate Majority Whip and Chair of the Senate Community and Urban Affairs Committee Troy Singleton, D-7th District, a bill sponsor and long-time advocate on the issue. “The governor’s signing of S50 puts us on a pathway to more success in the next round of affordable housing obligations, with clearer guidance for municipalities and a reduction of legal disputes that can allow those obligations to be fulfilled faster.”

The rest of the bill package signed into law by Murphy on March 20 includes:

• A2267/S1415 – requiring the New Jersey Housing Mortgage and Finance Agency to establish a pilot program to support insurance premiums for eligible affordable housing projects built by for-profit developers;
• S1422/A3365 – allowing taxpayers to accelerate depreciation of eligible property expenditures in connection with construction of new affordable housing developments to realize cost savings;
• A2296/S2309 – allowing a municipal governing body to delegate the municipal clerk the authority to issue certain approvals to facilitate development of affordable housing projects;
• A3337/S2312 – permitting payment in lieu of taxation (PILOT) 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 – exempting from sales taxes receipts from sales made to contractors or repairmen of materials, supplies or services related to the construction of 100%-affordable housing projects to help reduce costs for the construction of such projects.

“This initiative will allow us to develop additional affordable housing in New Jersey and make the system more workable,” said Senate President Nick Scutari, D-22nd District, a sponsor of the primary bill. “These bills make real progress in making housing more accessible and affordable for residents in communities throughout the state.”

“This legislation strikes the right balance in incentivizing opportunity and providing support for municipalities,” said Assembly Speaker Craig Coughlin, D-19th District, a sponsor of the primary bill.

Republicans are pushing back on the approach being taken by Democrats.

“Senate Republicans have long fought to pass commonsense reforms that would increase the state’s housing stock without trampling on the autonomy of the state’s many diverse municipalities. The reason that Republicans have not been able to solve this crisis is not due to a lack of ideas or advocacy on our part, but rather that Trenton Democrats, who control the legislative agenda by virtue of being the Majority Party, have refused to take any action on our reforms or even maintain our ideas,” the Senate Republican Caucus said in a March 14 statement ahead of a floor vote on the legislation.

“We all want to make sure that New Jersey has enough housing for those in need, but we cannot jump right to gutting open spaces and farmland,” the statement continued. “Constructing these units must happen in a commonsense way. Unfortunately, Republican legislators and local leaders have not been given a seat at the table when it comes to this important issue. Democrats are attempting to force through a bill that not only leaves the affordability problem unsolved but will most likely make the situation even worse.”

But the legislation was applauded by a number of leaders, advocates and longtime stakeholders on this issue.

“The housing bills being signed today are the culmination of months of comprehensive, statewide focus on affordable housing,” said Melanie Walter, executive director, New Jersey Housing and Mortgage Finance Agency. “These significant updates to New Jersey housing reflect a clear understanding by all involved of the importance of affordable housing to our shared future.”

“This new law 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 the Fair Share Housing Center. “By making compliance with New Jersey’s landmark Mount Laurel Doctrine simpler and clearer, we will build affordable homes faster with less cost to everyone involved.”