New JerseyA4220th Legislature (2024-2025)HouseWALLET

Reforms municipal responsibilities concerning provision of affordable housing; abolishes COAH; appropriates $16 million.

Sponsored By: Craig J. Coughlin (Democratic), Yvonne Lopez (Democratic), Verlina Reynolds-Jackson (Democratic), M. Teresa Ruiz (Democratic), Nicholas P. Scutari (Democratic), Troy Singleton (Democratic), Benjie E. Wimberly (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

35 provisions identified: 20 benefits, 1 costs, 14 mixed.

Accessible homes must meet housing rules

Homes covered by barrier-free and adaptability rules cannot count toward a town’s housing obligation unless they comply. A party representing households with disabilities can seek a plan change for noncompliant homes. The town must amend its plan within 90 days of the finding. Otherwise, it loses protection from exclusionary-zoning lawsuits for the affected part of its obligation.

Housing fees help families cover costs

Towns must reserve part of their housing development-fee funds for low- and moderate-income households. Assistance serves households in affordable homes included in a town’s fair-share housing plan. It can cover rent, security deposits, down payments, low-interest loans, or shared maintenance costs. Households earning 30% or less of median income can also receive help lowering the cost of low-income homes. The law does not set an individual payment amount.

Housing funds support low-income rental help

The Treasurer directs $20 million yearly from nonresidential development fees to the Urban Housing Assistance Fund. Receipts above $20 million go to the New Jersey Affordable Housing Trust Fund. The Community Affairs commissioner must allocate trust fund money each year for State rental assistance, choosing the amount considered necessary. Grants serve low-income households who may not qualify for other housing produced under the Fair Housing Act. The law sets no fixed household grant or annual rental-assistance allocation.

Veterans can get affordable housing preference

Towns can agree with developers or owners to give qualifying veterans preference for up to 50% of a project's affordable homes. Veterans must have low or moderate incomes and have served during war or another legally defined emergency. For the initial preference, veterans must apply within the first 90 days of the 120-day marketing period. After day 90, the public can be considered for remaining preference homes. After initial marketing, a special veteran waiting list restores priority when occupancy falls below the agreed share.

Affordable home set-asides carry local exceptions

At least 20% of new homes in developments under covered regional planning bodies must serve low- or moderate-income households. Joint planning boards formed under municipal land-use law are excluded from that regional rule. Newly built residential projects receiving State funds also face a 20% minimum, except specified tax-credit projects in eligible towns. For those tax-credit projects, eligible towns can choose a set-aside up to 20%. Projects with site-plan approval before the referenced 2011 law retain the percentage, if any, in that approval.

Affordable homes get longer price protections

New affordable rentals need restrictions lasting at least 40 years; for-sale homes need at least 30 years. Renewals generally last 30 years, or at least 20 when the original and added terms total at least 60. Fully affordable rentals can replace restrictions after 30 years only when preservation refinancing or repairs begin, with new restrictions lasting at least 30 years. Fully affordable projects qualify for State preservation programs after 30 years regardless of the original term; preservation refinancing funding can start earlier when needed, and municipal preservation credits require 60 combined years. Funding agreements must protect low- and moderate-income occupancy, but the Division can approve shorter guarantees when needed for project feasibility.

Cooperative housing uses regional income limits

The Senior and Disabled Cooperative Housing Finance Incentive Program uses income limits based on household size and housing region. Low income means gross household income at or below 50% of the regional median. Moderate income means above 50% and at or below 80%. Eligible buyers must be at least 55 or be adults with a disability under the Americans with Disabilities Act. They must seek a home in an eligible cooperative project.

Towns reserve homes for lower-income families

At least 13% of homes addressing future need must serve very-low-income households; at least half must be available to families with children. That share counts toward the 50% low-income minimum, and bonuses require going above 13%. At least 50% of actual homes must be available to families with children. At least 25% must be rentals, with at least half of those rentals available to families with children. Age-restricted housing can cover no more than 30% of future need; these unit-mix percentages exclude bonus credits.

New formulas set towns’ housing needs

For each 10-year round, regional future housing need equals positive household growth between the two latest federal censuses divided by 2.5. Zero growth or a decline produces no future regional need. Towns’ current need is based on deficient homes occupied by low- or moderate-income households. A home counts if it is over 50 years old and overcrowded, or lacks complete plumbing or kitchen facilities. Estimates use federal census and housing survey data.

New system for towns’ affordable housing

Effective March 20, 2024, the law abolishes the Council on Affordable Housing and repeals related affordable-housing statutes. The Department of Community Affairs and a court-run dispute program replace the council’s framework. Parties can still rely on existing council rules for housing credits, adjustments, and compliance. State law and binding court decisions take priority when they conflict with those rules.

Safety gear help for low-income families

The state fitness and sports council can provide grants to help low-income families buy protective eyewear. The Bicycle and Skating Safety Fund can also help families buy approved bicycle helmets. Helmet assistance depends on the director finding enough money in that fund. Families must meet the state housing finance agency's low-income housing standards. Neither program guarantees assistance or sets a payment amount.

Foreclosure rules protect homes and maintenance

Lenders must give borrowers written notice 30–180 days before accelerating a residential mortgage and filing foreclosure, with cure and assistance information. For homes with recorded affordability restrictions, lenders must also notify the town clerk and any appointed housing liaison. Notices must include the liaison’s contact details when appointed, plus the State housing finance agency’s address and phone number. Lenders must seek a court-appointed property manager for poorly maintained two- to four-unit properties meeting statutory receivership requirements. That requirement applies when the borrower or an immediate family member lived there when the loan began; neither process guarantees repairs or prevents foreclosure.

Public housing tenants can get services

Public housing owners and operators can provide tenants with safety services and services addressing substance use disorder. They can also offer counseling and help managing money. Services are provided in cooperation with other agencies. The law authorizes these services but does not require any particular service.

Public home-repair loans get lending exemptions

State and local agencies can make qualifying affordable-home repair loans without residential mortgage lending requirements. Loans must support an eligible housing plan, court-approved arrangement, or regional contribution agreement. Funding must come from municipal sources, State or federal subsidies, or a regional contribution agreement. Repayment must be secured by a property lien behind any earlier liens.

State funds new housing oversight system

The law replaces the Council on Affordable Housing with state agency oversight and a court-run housing dispute program. It provides $12 million for fourth-round housing disputes and $4 million for Department of Community Affairs duties. Transitional rules were due within nine months after March 20, 2024. These rules must transfer remaining council duties and address development assessments and fees charged to low- and moderate-income homes.

Stronger oversight protects affordable housing rules

The Department of Community Affairs must set certification and performance standards for housing agents and town housing liaisons. Agents enforce affordability rules, while liaisons monitor their work. The department and interested parties can bring compliance problems before a county housing judge. Judges can order fixes and fines, and deliberate violations can cost an agent its certification.

Towns earn bonuses for affordable homes

Towns earn bonus credit for affordable homes with at least three bedrooms beyond the number already required. Each affordable home on land used for retail, offices, or other commercial space earns one regular credit plus half a bonus credit. Fully affordable projects earn one regular and one bonus credit per home when the town helps fund them. That help can be donated land or a housing trust fund contribution of at least 3% of project cost. Total bonus credits cannot exceed 25% of a town's prospective housing obligation for the round.

Towns earn bonuses for preserving affordability

Towns earn one regular credit plus half a bonus credit for each existing affordable rental kept affordable for another term. The town must help pay preservation costs, and the extension must follow state affordability rules. Converting a market-rate rental or owned home to affordable housing earns one regular credit plus one bonus credit. The town must commit to completing the conversion, with an owner-signed agreement or town ownership. Total bonus credits remain capped at 25% of the town's prospective obligation for the round.

Towns gain home-buying and funding flexibility

Towns can buy privately owned residential properties to help meet their affordable-housing obligations, subject to State rules. The purchase pays secured liens other than tax liens, even when those debts exceed the property’s appraised value. Towns do not have to fund infrastructure beyond commitments in their certified housing plans. They can agree to fund more through development agreements with project applicants.

Towns must strengthen affordable housing plans

Town housing plans must examine whether local rules help or hinder families staying together across generations. Plans must also check consistency with state development plans, including water, wastewater, stormwater, and transportation. The State Planning Commission provides guidance and technical help. Towns receiving fourth-round or later reductions for scarce vacant land must identify redevelopment sites covering at least 25% of adjusted need. They must adopt realistic zoning or explain why they cannot meet these requirements.

Towns must track housing fee money

Towns must put residential and nonresidential development fees in dedicated trust funds; additional uses need Department of Community Affairs approval. Towns authorized to collect residential fees or payments instead of building affordable homes must report collections and spending. The first accounting was due within 180 days after enactment; annual reports are due February 15, starting in 2025. Records must identify each payer and deposit date. Money not committed within four years transfers to the state housing trust fund for regional use; nonresidential fee violations can also trigger forfeiture.

Affordable builders get zoning and fee relief

Towns must offer zoning incentives when developers propose affordable homes within a mixed-income development. Incentives must include permission to build more densely and reduced costs. Towns cannot collect development fees from developers providing affordable homes on-site or elsewhere in the same town. The law does not specify how much of the developer savings reaches households.

Business developers avoid duplicate housing charges

Local affordable-housing fees and obligations on nonresidential developers are void unless the statewide development-fee law expressly allows them. Mixed-use projects cannot face a housing obligation greater than their residential portion would face on its own. Covered casino-regulated projects satisfy the State development fee through affordable-housing investment obligations. The developer must have made or committed to make the contribution.

Housing projects get full federal credits

The State must allocate low-income housing tax credits to the full extent federal law allows, including 4%, 9%, and partial credits. Affordable homes in mixed-income or mixed-use projects can qualify through a certified fair-share plan. Applicants must prove market-rate homes or commercial space cannot cover the affordable homes’ costs, and both portions must be developed together. These are development credits, not a new household tax credit.

Qualifying projects avoid commercial development fees

Fee exemptions cover qualifying worship, education, parking, public-amenity, nonprofit hospital or nursing-home work, and specified transit projects. Worship and educational properties must keep their property-tax exemption for at least three years after the occupancy certificate. Transit exemptions are limited to the listed transit hubs, locations, and plans. If a property-tax exemption ends, the development fee is due within 45 days. Other exemption-ending events generally require payment within three years after the event or final occupancy certificate, whichever is later.

Redevelopment plans can include clean-vehicle stations

The law includes zero-emission vehicle charging and fueling infrastructure within the definition of a redevelopment project. Public electric-vehicle chargers and public hydrogen stations qualify when included in work under a redevelopment plan. The change does not provide a household payment or require stations to be built.

Commercial construction carries a development fee

New nonresidential construction on unimproved lots carries a one-time development fee of 2.5% of equalized assessed land and improvement value. Additions to existing nonresidential buildings carry a 2.5% fee on the increase in equalized assessed value. These fees add to covered development costs. The law does not specify any resulting change in household prices.

Small rental repairs get fewer restrictions

The Department of Community Affairs can assist moderate-repair projects with 30 or fewer rental homes in qualifying census tracts. The tract’s median income must be no more than 60% of the housing region’s median, using a three-person-household measure. Tenant income certification is not required. Contracts and deed restrictions guaranteeing continued low- and moderate-income occupancy are also not required.

Developers can seek affordable project changes

A town and developer can request changes to an approved project that includes affordable homes. They must show that market conditions beyond their reasonable control affected the project. Approved changes can allow more homes overall or reduce the required affordable share. The application must explain how the town will address any shortfall in its affordable-housing obligation.

Housing funds target need with limits

Housing trust-fund grants and loans go to projects in towns with certified housing plans or State aid. Town governing bodies must support projects in writing, and specified fee-funded projects get priority in certified towns. Regional funding targets follow each region’s share of housing need, using household growth over the prior 10 years. Money can support repairs, accessory homes, conversions, acquisition, construction, infrastructure, housing-authority repairs, project costs, and accessibility changes. The Department of Community Affairs can use up to 7.5% of available money each year for administration.

Land protections shape towns’ housing plans

Highlands housing obligations must account for the regional master plan in housing rounds after March 20, 2024. Covered towns must review build-out reports, redevelopment, and fully affordable housing opportunities; Planning Area lands require Highlands-conforming status. Towns must exclude qualifying public-purpose, conservation, open-space, historic, restricted farm, recreation, and development-prohibited environmental land from vacant-land counts. Contiguous private parcels accommodating fewer than five homes are also excluded. Ownership and control rules apply, and public-purpose exclusions carry a January 1, 1997 resolution cutoff plus lawsuit or plan-filing timing requirements.

Towns face tighter housing spending controls

Towns need certification or department approval before committing housing fees, and must include spending plans in their housing plans. Spending generally requires lawsuit protection, with exceptions for previously protected collections and qualified urban-aid towns with approved fee ordinances and plans. Money cannot reimburse work before fee-collection authorization or pay specified litigation costs; administration is capped at 20% of fee revenue. Fees must be spent within four years or transferred to the State fund for the town’s region; violations can trigger additional forfeitures. The department must publish annual town-level spending summaries and had nine months after enactment to update its rules.

Towns get housing bonuses with limits

Starting with the fourth round, towns generally get one credit per affordable home; bonuses cover at most 25% of future need. A home gets only one bonus type: qualifying supportive homes earn one extra credit, while qualifying nonprofit ownership, transit-area, age-restricted, and extra three-bedroom family homes earn half. Transit bonuses reach one-half mile from specified stations, or one mile in Garden State Growth Zones; age-restricted bonuses cover at most 10% of qualifying age-restricted homes per round. Very-low-income family homes above the 13% requirement earn one credit plus a half bonus, measured against the town’s full future obligation. Qualifying community residences and transitional rentals receive full credit with affordability protections, but transitional housing covers at most 10% of the total obligation.

Towns get housing shares and exemptions

Each town's upcoming 10-year housing share uses an average of nonresidential property-value change, income capacity, and weighted land capacity. That average is multiplied by regional housing need. Towns designated for State aid by July 1 before a new round qualify for exemptions through specified housing or density tests. Tests include a qualifying deficient-housing ratio, density above 10,000 people per square mile, or density above 6,000 but below 10,000 with less than 5% qualifying vacant parcels. These rules set town duties, not household payments.

Business projects face housing-fee payment rules

Nonresidential projects cannot get final occupancy certificates until required development fees are paid to the Treasurer or an authorized town. Assessors must estimate property value within 90 days after notice. They must confirm or change the fee within 10 business days after a final-inspection scheduling request. If the town misses that deadline, the developer can estimate and pay the fee and receive the certificate when other requirements are satisfied. Developers can also pay under protest without losing an otherwise available certificate.

Sponsors & Cosponsors

Cosponsors

James Beach
Democratic • Senate
Renee C. Burgess
Democratic • Senate
Shama A. Haider
Democratic • House
Hall, Garnet R.
Affiliation unavailable
McCann Stamato, Barbara
Affiliation unavailable
Angela V. McKnight
Democratic • Senate
William F. Moen Jr.
Democratic • House
Pou, Nellie
Affiliation unavailable
Annette Quijano
Democratic • House
William B. Sampson IV
Democratic • House
Shanique Speight
Democratic • House
Sterley S. Stanley
Democratic • House
Britnee N. Timberlake
Democratic • Senate
Anthony S. Verrelli
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 124 • No: 67

House vote • 3/18/2024

CONCUR IN SA

Yes: 50 • No: 25

Senate vote • 3/18/2024

3RDG FINAL PASSAGE

Yes: 23 • No: 14

House vote • 2/12/2024