NJ lawmakers target affordable housing process
Must figure how much towns must provide
As next year’s deadline looms for New Jersey towns to start calculating their upcoming round of constitutionally mandated affordable housing obligations, lawmakers heard three hours of testimony Thursday in the first public hearing of the legislative session about a wide-reaching bill that would revamp that process.
Lawmakers tried to quickly push through a version of the bill in the final weeks of the lame-duck session, but paused after pushback and feedback from local officials and affordable housing advocates.
Legislators have since made revisions to this session’s bill, S50/A4, that more than 50 advocates, developers and religious organizations supported, and municipal leaders and the attorneys that represent them critiqued during the Senate Community and Urban Affairs Committee.
To determine how much affordable housing they would need to zone for to be protected from developers sidestepping the municipal approval process, towns would follow a formula laid out in a 2018 court opinion by Judge Mary Jacobson in Mercer County that had applied directly to two towns, Princeton and West Windsor.
Under the new bill, the Department of Community Affairs would calculate the town’s number by Dec. 1, 2024, or seven months within the effective date of the bill, whichever is earlier – as opposed to three regional court-appointed special masters included in last session’s draft.
It also includes new ways that towns could receive “bonus credits,” including developing housing on land previously used for retail or commercial space and homes created in partnership with nonprofit housing developers. Additionally, the updated legislation requires the DCA to publish information on its website including the balance of the town’s affordable housing trust funds, the start and end dates on deed restrictions, and the amounts of development fees collected and spent.
“Our efforts here today will codify years of legal precedents and ensure New Jersey’s affordable housing system is insulated from changes in leadership, or effort to undermine equitable access while we’re still roughly 200,000 or so units short on the needed number of affordable apartments in our state,” said bill sponsor Sen. Troy Singleton, D-Burlington.
Republican Sen. Holly Schepisi, who voted against advancing the bill, expressed concern about what the methodology would look like in practice, and whether this regional formula would leave Bergen County towns she represents with higher obligations than are feasible.
“I don’t think anybody disputes that we need to collectively work and figure out a better solution,” Schepisi said. “I happen to represent an area that has been highly overdeveloped. We deal with significant flooding issues, we deal with no place for water runoff, we deal with the fact that we have no public transportation. We have the highest property taxes in the nation. And eventually, there’s got to be a breaking point as to how much we force in and where we do.”
Singleton reiterated that the bill cannot be the sole solution to New Jersey’s affordability crisis.
“I want us to not lump all the ills of housing and the lack of supply in the context of just S50 because there’s so much that we have to do,” Singleton said.
Taiisa Kelly, CEO of Monarch Housing, which leads the annual count of those experiencing homelessness, emphasized the importance of acting quickly, and what more housing stock means for families.
“The unfortunate reality is that in New Jersey, we do not have enough homes that are affordable to our neighbors,” Kelly said. “What this creates is a vicious cycle where [low-income] families ... only have an opportunity to realize their dream of a stable home when another family is evicted or foreclosed upon. It’s a cruel cycle where we are circulating the few affordable spaces among a growing population that needs more. The only way that we can begin to end the cycle is when we begin to create the number of homes that are needed so that every person can live adequately.”
Developers suggested making tweaks to the bill’s provisions on deed restrictions, which would protect the affordability of rental units for 40 years and for-sale homes for 20 years.
Chris Foglio, founder and CEO of Community Investment Strategies, which owns 4,000 deed-restricted units in the state, said they typically need to put a lot of money into properties after 30 years, and if deed restrictions last longer, it can lock them out of certain funding that they need to cover rehabilitation costs.
Hannah Katz, policy and program associate at the Association of New Jersey Environmental Commissions, said environmental concerns needed to be taken into account, remembering the residents who died during the remnants of Hurricane Ida who lived in an affordable housing complex in Elizabeth that flooded.
“We’re grateful for the exclusion of certain lands that may be considered vacant for development, such as farmland, parks and open spaces,” Katz said. “However, we are concerned regarding the adequacy of environmental protections in this bill.”
Chatham Council President Jocelyn Mathison, a Democrat, said “the current approach using inclusionary housing as the primary mechanism forces municipalities to build large market-rate projects in exchange for a handful of affordable units.”
“In our case, hundreds of opulent luxury units costing $4,000 to $6,000 a month to get a paltry 37 units of affordable housing that 5,000 people applied for,” Mathison said. “Because of this, the law forces taxpayers to subsidize forprofit developers without necessarily netting a lot of affordable units.”
How does the process work now?
A series of significant state Supreme Court cases beginning in 1975 created the Mount Laurel Doctrine, which said municipalities must zone for and provide a “fair share” of affordable housing for low- and moderate-income families, which typically means that a household would spend no more than a third of its monthly paycheck on housing expenses.
In response, the Legislature created the Council on Affordable Housing, to which towns would submit affordable housing plans and if approved, the towns would be protected for a period of time from builder’s remedy lawsuits. Such lawsuits allow developers to avoid the municipal approval process and build a project with as many marketrate units as they would like as long as at least 20% of the units are affordable.
The council approved plans for two “rounds” of housing obligations through
1999, but it failed for 16 years afterward to adopt updated affordable housing quotas and rules to cover a third round, stalling the construction of affordable units for decades.
In March 2015, the New Jersey Supreme Court said the council was “moribund” and non-functioning, bringing the process to the Superior Court, where municipalities negotiate settlements with the nonprofit Fair Share Housing Center. The new bill would officially abolish the council.
In September 2022, 17 municipalities filed a lawsuit attempting to compel Gov. Phil Murphy to fill seats on COAH’s board that have sat vacant for close to a decade. On Tuesday, an appellate court ruled against them.
“Even if a statute mandates the governor make an appointment, that obligation cannot be enforced by the judiciary,” Judge Lisa Rose wrote in a 27page opinion.