Bill Package to Establish New Affordable Housing Framework and Support Affordable Development Clears Senate

TRENTON – In an effort to increase New Jersey’s affordable housing supply, the Senate passed a package of six bills sponsored by Senator Troy Singleton, Senate President Nicholas Scutari, Senator Shirley Turner, Senator Brian Stack, Senator Joseph Lagana, Senator Angela McKnight, 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.

“In spite of the fact that New Jersey has doubled its supply of affordable housing since 2015, we still remain well over 200,000 affordable units short, making housing and homeownership unreasonably expensive for many New Jersey families,” said the Chair of the Senate Community and Urban Affairs Committee Senator Troy Singleton (D-Burlington). “This package of legislation will streamline the process and build on the progress that we have made over the past eight years, allowing affordable housing to be constructed faster and more efficiently over the coming round of affordable housing obligations. 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.”

“Families should not have to contend with uncertainty as to where they will be able to find a home, or whether they will be able to afford a future rent increase,” said Senator McKnight (D-Hudson). “Unfortunately, years of neglect have led to a massive shortage of affordable rental and homeownership opportunities. It will take time, but these reforms would put us on a path to reversing that shortage and reducing the barriers to affordable housing production.”

“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 require the New Jersey Housing and Mortgage Finance Agency to establish an affordable housing insurance pilot program. The program would provide financial assistance to for-profit affordable housing entities for insurance premiums for coverage for eligible affordable housing projects. Assistance would not exceed $250 annually per unit and $1,000,000 annually per eligible affordable housing project.

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-2309, sponsored by Senators McKnight and Stack, would permit the governing body of a municipality to delegate to its municipal clerk the authority to provide a written statement in support of one or more affordable housing programs or projects. By allowing a municipality to delegate the task to the municipal clerk, the process to obtaining funding for affordable housing projects would be streamlined, and towns would be more easily able to meet their obligations.

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 Senate’s passage of these bills sets them up for final consideration from the Governor.