New Jersey Governor Signs Landmark Affordable Housing Legislation

Housing advocates in New Jersey are celebrating the enactment of legislation to reform the state’s fair housing obligations under the New Jersey Supreme Court’s Mount Laurel Doctrine and the state’s “Fair Housing Act.” Established in 1975 and enhanced through subsequent court decisions, the Mount Laurel Doctrine requires towns to provide their fair share of a region’s affordable housing (see Memo 6/20/23). New Jersey Governor Phil Murphy on March 20 signed Bill A-4/S-50, which streamlines the process for determining and enforcing these obligations. Advocates believe this will provide more certainty for housing developers and reduce litigation-related delays to the construction of new affordable housing. The new reforms will take effect in 2025.

Key provisions in the legislation include a streamlined process to determine affordable housing obligations, initiated by the Department of Community Affairs and mediated as needed by a new Affordable Housing Dispute Resolution Program. The legislation also codifies the affordable housing obligation methodology, which is based on the 2018 method that enabled municipalities to more effectively and efficiently determine their obligations without prolonged judicial involvement. Increased transparency is required at each stage of the process: the adoption of initial affordable housing plans, the availability and allocation of state housing trust funds, and the number of housing units built. The legislation repeals the Council on Affordable Housing, which had become a defunct agency that failed to enforce the Mount Laurel Doctrine, therefore thwarting affordable housing development. Finally, the legislation prohibits wealthy towns from paying their way out of their affordable housing obligations.

As the state prepared to allocate its fourth round of 10-year affordable housing obligations in 2025, advocates seized the opportunity to work with champions in the state legislature to enact system reforms. A letter outlining many provisions that were ultimately enacted was signed by more than 60 civil rights leaders and housing advocates, including the Housing and Community Development Network of New Jersey, an NLIHC state partner.

“We thank Governor Murphy and his Administration for continuing to prioritize housing stability, security and affordability for NJ’s working families and most vulnerable neighbors. We are grateful to Senate President Scutari, Assembly Speaker Coughlin, Senator Singleton, Assemblywoman Lopez and all the legislators who championed this bill to help HouseNJ,” said Staci Berger, president and chief executive officer of the Housing and Community Development Network of NJ. “Our network includes over 275 members dedicated to the belief that housing is a human right and passage of this bill allows us to continue working towards making NJ a place everyone can afford to call home.”

Governor Murphy signed several other housing-related bills on March 20:

  • ACS for A-2267/SCS for S-1415 requires the New Jersey Housing Mortgage Finance Agency to establish a pilot program to support insurance premiums for eligible affordable housing projects constructed by for-profit affordable housing developers.
  • S-1422/A-3365 allows taxpayers to accelerate depreciation of eligible property expenditures in connection with construction of new affordable housing developments in order to realize cost savings.
  • A-2296/S-2309 allows a municipal governing body to delegate to the municipal clerk the authority to issue certain approvals to facilitate development of affordable housing projects.
  • A-3337/S-2312 permits “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.
  • A-1495/S-1484 exempts receipts from sales made to contractors or repairmen of materials, supplies, or services related to the construction of 100%-affordable housing projects in order to help reduce costs for the construction of such projects.

Read more about the legislation and its expected impacts in New Jersey here.