New Jersey lawmakers have passed a sweeping overhaul of the state’s affordable housing system — one they hope will help develop some of the 200,000-plus homes advocates say are needed to serve low-income residents and families.

The state Senate passed the bill 21-14 on Monday. Lawmakers said it will overhaul New Jersey’s system for assigning affordable housing obligations to municipalities and holding them accountable for allowing development — giving shared regulatory responsibility to courts and state agencies.

It also formally abolishes New Jersey’s Council on Affordable Housing, which hasn’t met for years, and replaces a current system that sees towns negotiate affordable housing obligations with a court-assigned nonprofit.

Lawmakers said those negotiations are burdensome for towns, slow-moving and need to be changed before New Jersey assigns towns a new “round” of affordable obligations next year. They also said elements of the bill will encourage affordable homes to be built near resources people need, like transit stations and supermarkets.

The bill previously passed the state Assembly and Gov. Phil Murphy has indicated he will sign it into law.

The bill’s passage comes after a contentious few months of debate, with Democratic proponents and housing advocates for the bill on one side, and Republican legislators and some town officials on another. Opponents said they worried the bill could lead to sprawl and strip local community leaders of too much control.

One major point of contention was around the speed with which legislators in the Democratic majority were moving the bill through the process. The bill was initially introduced last December during the “lame duck period,” after elections are held but Legislators haven’t yet been sworn in. That version of the bill stalled, but a new one was quickly reintroduced early in the current legislative session.

“Today I'm grateful we're collectively poised to take an important and indeed monumental step in ensuring that the best parts of our affordable housing system are set in statute and remain effective and efficient for families today and generations to come,” Democratic Sen. Troy Singleton, the key sponsor of the bill, said on the Senate floor prior to the vote.

Development on an upswing

In 1975, a landmark state Supreme Court case established the Mount Laurel Doctrine, which says every municipality across the state must provide a realistic opportunity to develop a “fair share” of affordable homes.

Legal challenges from towns led to a second decision in 1983 and the 1985 passage of the Fair Share Housing Act, which established the Council on Affordable Housing, or COAH. Its job was to ensure towns meet affordable housing obligations, assigned in “rounds.” Towns that fail to provide for their obligations could face so-called “builder’s remedy” lawsuits, which let builders develop projects without towns’ approvals, so long as they set aside a portion for affordable housing.

Advocates and the lawmakers behind the new bill said they agreed that the Council on Affordable Housing failed and became a political football. After Chris Christie became governor in 2010, he sought to suspend and dismantle the council, but was blocked by the state Supreme Court, setting off a series of legal and political battles.

The agency failed to adopt a round of affordable housing obligations in 2015, prompting the state Supreme Court to strip it of its power, and make the courts responsible for administering affordable housing obligations instead.

Singleton said on the Senate floor Monday that since 2015 — when COAH went defunct and towns began negotiating affordable housing settlements with a nonprofit called the Fair Share Housing Center — the pace of affordable housing production in New Jersey has nearly doubled compared to the prior 15 years.

“Removing COAH from the equation and reinstituting the role of the courts in this constitutional issue led to the creation of 70,000 new multiple family units and 21,000 deed-restricted affordable homes in the last eight years alone,” Singleton said.

Under the bill, over the next several months each town’s obligation would be calculated. Then, the towns would have until this fall to work out plans with the state for how they would meet their requirements when the next round starts in July 2025.

‘Bonuses’

Under the new bill, the courts would share regulatory responsibilities with the Department of Community Affairs and the New Jersey Housing and Mortgage Finance Agency. The state would adopt a formula for housing obligations based on a 2018 court ruling regarding affordable housing in Princeton and West Windsor Township.

The bill includes a “bonus” structure that advocates say could make it easier for towns to meet their affordable housing obligations, while incentivizing them not to put all their lower-income units on the outskirts of town.

For example, if a town put an affordable unit near a transit center, it would get credit for another unit toward its obligation.

Towns can also earn bonuses creating supportive housing for people with special needs, family housing (units with at least three bedrooms), and the redevelopment of existing structures. The bill in its current form says towns cannot apply bonuses for more than 25% of their total.

“This legislation will help tear down the walls that have denied too many access to opportunity and create new affordable homes near jobs, schools, and transportation,” said Adam Gordon, executive director for Fair Share Housing Center.

Anthony Bucco, the state Senate Republican leader, said he commended Singleton and others for tackling the issue but said he thinks this bill is shortsighted and could lead to “massive overdevelopment and sprawl.”

“Nowhere is there a provision for the courts to look at sound land-use planning,’ Bucco said.

He said that he thinks the bill will encourage “haphazard development” with the state ending up with hundreds of thousands of housing units it cannot support.

“Anyone that thinks that this legislation will simplify the process and save taxpayers dollars, I think is sadly mistaken. This will make the prior round look like Disney World,” Bucco said.

During his speech Monday,. Singleton referenced a few New Jerseyans who were able to buy their first homes through New Jersey’s affordable housing process. One of those people was 58-year-old Wanda Vidal, who worked for 20 years as a toll collector for New Jersey transit but still struggled to afford a place to live. Vidal was able to buy her first home in 2022.

“In 2022, with the help of Habitat for Humanity, she got her dream home through an affordable housing program,” Singleton said.

Vidal told Gothamist that even with a full-time job and working overtime she couldn’t save the money for a down payment on a home. She said when she first learned she was getting the home in Princeton, she initially didn’t tell her family in case it didn’t happen.

In fact, she said she kept it a secret until the day when the town held a special ceremony for her and the mayor presented her with the keys.