With just a few days remaining in the two-year legislative session, State lawmakers introduced and are swiftly pushing towards enactment of a bill that would radically change the administration of affordable housing in New Jersey and set forth a single standard to determine affordable housing obligations. Since 2015, no standard has been in place. Instead, the calculation and administration of the required affordable housing has been led by courts and court-appointed special masters. With an impending new round of affordable housing obligations set to begin on July 1, 2025, this legislation could provide clarity to municipalities and developers. The Assembly Appropriations Committee was scheduled to discuss the bill today. The Assembly and Senate are likely to consider the bill next week.

The bill would amend the Fair Share Housing Act to abolish the already-defunct Council on Affordable Housing (COAH) and authorize municipalities to determine their present and prospective fair share affordable housing obligations with the guidance of a court-appointed special master. The Supreme Court would be required to appoint a special master for each of the northern, central, and southern areas of the state to calculate regional need and issue guidance on municipal present and future obligations for the 10-year fourth round and for each 10-year round of rules thereafter. The legislation would establish six regions of the state for purposes of determining regional affordable housing needs. The municipal obligations would be calculated using the methodology from In re Application of Municipality of Princeton, known as the Judge Jacobson methodology, which is most commonly used by courts to determine third round obligations.  

The legislation would also create certain half-unit bonus credits in the fourth round rules for each: (i) affordable housing unit in a community residence for persons with head injuries, developmental disabilities, or mental illness, or in transitional housing (although transitional housing would not be permitted to account for more than 15% of a municipality’s fair share obligation); (ii) unit of very low-income housing; (iii) affordable housing unit located within a 1/2-mile radius (or one-mile radius if located in a Garden State Growth Zone) surrounding a New Jersey Transit Corporation, Port Authority Transit Corporation, or Port Authority Trans-Hudson Corporation rail, bus, or ferry station, including all light rail stations; and (iv) unit of age-restricted housing (however, the credit would not be permitted to be applied to more than 10% of the age-restricted units counted towards a municipality’s obligation, and age-restricted would not be permitted to account for more than 33% of a municipality’s obligation). Further, each municipality would be required to satisfy a minimum of 50% of its prospective affordable housing obligation, exclusive of bonus credits, through the creation of housing available to families with children.

In addition, the bill would establish an Affordable Housing Dispute Resolution Program to settle disputes and allocate $12 million to the program for the fourth round rules. An additional $4 million would be allocated to the courts to be used by the special masters for the administration of the fourth round rules.

Finally, the pending bill would require the creation of rules establishing a sliding scale of deed restrictions for affordable housing, with longer deed restrictions required for projects that have a lower percentage of affordable housing units. All projects would have a minimum deed restriction of 30 years. If the proposed affordable housing were to consist of 20% or fewer of the total units, then the deed restriction would be a minimum of 50 years. The sliding scale would not apply to 100% affordable housing developments or other developments assisted by state and/or federal funding.

Overall, the proposed legislation would provide clarity and consistency in advance of the fourth round of rules set to begin in 2025. The legislation would also allow for more credits towards meeting affordable housing requirements, establish a new dispute resolution program, and require longer deed restrictions for the affordable housing units.

The bill, as currently drafted, can be found in its entirety here. Our team of land use and government relations attorneys are monitoring this fast-moving action in Trenton and will update this blog from time to time.