Bill Package to Establish New Affordable Housing Framework and Support Affordable Development Advances Through Second Committee

TRENTON – In an effort to increase New Jersey’s affordable housing supply, the Senate Budget and Appropriations Committee advanced a package of bills sponsored by Senator Troy Singleton, Senate President Nicholas Scutari, Senator Shirley Turner, Senator Brian Stack, Senator Joseph Lagana, and Senator Patrick Diegnan. The package includes legislation that would establish a new framework for the determination and enforcement of affordable housing obligations under the Mount Laurel Doctrine, in addition to reforms that would further reduce the cost of affordable housing development.

The package is being advanced in anticipation of the next round of municipal affordable housing obligations, which begins on July 1, 2025. Since 2015, court enforcement of the Mount Laurel Doctrine, which requires municipalities to provide their “fair share” of affordable housing, has led to the creation of nearly 70,000 new homes across New Jersey, 21,000 of which are deed-restricted affordable homes.

“Although New Jersey has doubled its supply of affordable housing since 2015, we still remain well over 200,000 affordable units short,” said the Chair of the Senate Community and Urban Affairs Committee Senator Troy Singleton (D-Burlington). “While this package of legislation would not address all of the barriers to affordable housing development, it streamlines the process and builds on the progress that we have made over the past eight years. Expanding the supply of affordable housing must remain a priority, as it is needed now more than ever.”

“Affordability has been the cornerstone of the efforts we have taken in the Legislature to address the challenges our residents face every day,” said Senate President Nicholas Scutari (D-Somerset/Union). “This initiative will allow us to develop additional affordable housing in New Jersey and make the system more workable. The bill package makes real progress in making housing more accessible and affordable for residents in communities throughout the state.”

“The housing affordability issue in New Jersey is not new, but it has become more acute as a result of a lack of adequate housing supply,” said Senator Turner (D-Hunterdon/Mercer). “This package will help reduce the exorbitant costs that too often prevent new affordable housing from being built, build on progress that the courts have made over the past several years, and would ultimately help ensure affordable housing opportunities are available across the state.”

“These efforts would enable the faster production of affordable housing and faster fulfillment of local affordable housing obligations,” said Senator Stack (D-Hudson). “Giving municipalities a more streamlined process, aligning our tax system with our housing production goals, and taking a regional approach to our affordable housing challenges will put a system in place that is best equipped to reverse the growing trend of unaffordability.”

“This package of legislation is ultimately about driving down the costs of housing construction, so that affordable housing is more widely available and more financially feasible for all of New Jersey’s families,” said Senator Diegnan (D-Middlesex).

S-50, sponsored by Senator Singleton and Senate President Scutari, would codify the methodology adopted by the courts to calculate the municipal affordable housing obligation, streamline the process for adoption of fair share plans and related actions, as well as abolish the now-defunct Council on Affordable Housing. These actions would codify the most successful elements of the last several years of court-led enforcement, while reducing the legal costs often borne by developers, affordable housing advocacy groups, and municipal governments. In so doing, the next round of affordable housing obligations would be able to be fulfilled faster and more effectively.

S-1415, sponsored by Senators Singleton and Stack, would authorize for-profit affordable housing entities to establish or join joint insurance funds with other housing entities. By permitting the use of joint insurance funds, which enables the costs of premiums to be spread among multiple organizations and mitigates the impact of insurance claims across a wider group, affordable housing entities and projects previously unable to obtain or afford insurance would be able to do so at a lower cost.

S-1422, sponsored by Senators Singleton and Turner, would provide for an alternative method of depreciation for eligible property expenditures that are incurred through the construction of new affordable housing. In doing so, developers would be better able to recover the cost of their investment in affordable housing than current law allows, thus making affordable development more financially feasible.

S-1484, sponsored by Senators Lagana and Diegnan, would exempt materials, supplies, and services made to contractors or repairmen for certain affordable housing projects from the state’s sales and use tax. The exemption would apply to housing projects wherein all units are restricted for occupants with moderate, low, or very low incomes.

S-2312, sponsored by Senators Stack and Singleton, would allow municipalities to exempt affordable housing projects funded through the Affordable Housing Trust Fund, or municipal development fee trust funds, from real property taxation. Payment in Lieu of Taxes (PILOT) agreements can be implemented instead, thus incentivizing the construction of affordable housing.

The Committee's advancement of these bills sets the package up for consideration from the full Senate.