NJ lawmakers say they'll finally make affordable housing rules clearer

New Jersey Democrats are racing to pass a bill that would overhaul how New Jersey makes towns responsible for accommodating affordable housing.

The Legislature’s leadership introduced the bill a few days before Christmas. Gov. Phil Murphy has indicated he’s on board and hopes to sign a version before the current Legislative session ends on Jan. 9, and the measure is supported by a court-assigned nonprofit currently responsible for working out affordable housing obligations with towns. But some key stakeholders say they doubt a bill can get through in just a few short weeks.

The bill would set up a new system for assigning and enforcing affordable housing obligations, with regulatory responsibility shared by the courts and state agencies. It would formally abolish New Jersey’s Council on Affordable Housing, which hasn’t met for years, and replace a current system of negotiating affordable housing obligations with the court-assigned nonprofit.

And it would base obligations on a 2018 court ruling that laid out what affordable housing New Jersey towns must provide.

Democratic Sen. Troy Singleton, one of the bill's prime sponsors, said it would create “transparency” and “predictability” around the process, while increasing housing inventory in one of the nation’s most expensive states to live in.

“And the thought behind that is that when you have more inventory, you can put downward pressure on pricing, simultaneously allowing individuals across all sorts of income spectrums to have opportunities to live, work, and play here in the state of New Jersey,” he said.

Advocates and legislators say a new process would help New Jersey move past decades of political and legal battles over how it assigns and enforces affordable housing obligations. They say it would replace a current process municipal leaders find costly and cumbersome.

Singleton said that he and his colleagues decided to introduce the bill during the “lame duck” session — the period between elections and when new legislators are sworn-in — after months spent having “a series of detailed conversations with a variety of stakeholders across the board.”

“I don't think there's any benefit or utility to continuing to wait” until the new legislative session, Singleton said.

However, he did say if they can’t get it right, he intends to reintroduce the legislation next session.

How New Jersey handles affordable housing now

“For years, court battles over affordable housing have raged in communities in our state, with taxpayer dollars being spent,” said Assemblymember Yvonne Lopez, another of the legislation's prime sponsors. “The result is that we still have an affordable housing shortage.”

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 to ensure towns meet affordable housing obligations, assigned in “rounds.” Towns that fail to provide for their obligations could face “builder’s remedy” lawsuits, which lets builders develop projects without towns’ approvals, so long as they set aside a portion for affordable housing.

For years, court battles over affordable housing have raged in communities in our state, with taxpayer dollars being spent. The result is that we still have an affordable housing shortage.

Assemblymember Yvonne Lopez, a sponsor of a bill to overhaul affordable housing rules in New Jersey.

But advocates and the lawmakers behind the new bill agree 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.

Since then, towns have negotiated affordable housing settlements with a nonprofit group designated by the courts — the Fair Share Housing Center.

In that time, New Jersey has doubled its affordable housing production, according to a report by the Fair Share Housing Center. But New Jersey still needs more than 224,000 affordable rental units for families with “extremely low-income renters,” according to the National Low Income Housing Coalition.

A path ahead for affordable housing

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

“There's been disputes over how much affordable housing each [municipality] has to provide … and this really would clarify through a pretty simple formula based on a decision by the court … on how much every town has to do in terms of providing affordable housing,” said Adam Gordon, executive director of the Fair Share Housing Center.

The state’s fourth round of affordable housing obligations is set to start in 2025 and last 10 years.

Gordon said his organization, which is currently responsible for negotiating in court with the towns, supports the bill, calling it “a pretty reasonable compromise in our view.”

The state Supreme Court would appoint special masters for regions throughout the state, to determine each town’s obligations going forward.

Towns could challenge the special masters’ determinations, but that process would be resolved through mediation with a newly created Affordable Housing Dispute Resolution Program. The court's chief justice would appoint the members of this group.

The bill also allocates $16 million to execute the plan.

Mike Cerra, executive director of the New Jersey League of Municipalities, said the “overarching” concern that he’s hearing from the towns is that this bill is “a completely new approach that emerged only within the last week or so.

Hundreds of municipalities will be reorganizing in the next week, “so they're going to have to get up to speed on this pretty darn quickly,” he said.

Cerra said the League of Municipalities is still “digesting” the bill, and hasn’t taken a position yet. He also applauded the recognition by the Legislature that the towns needed “an alternative” to the current court-based system, but said he expects a longer process than can be resolved during the lame duck session.

The legislation has moved through the Assembly’s housing committee and could come to a floor vote in an upcoming session. It’s still yet to get a hearing in the Senate’s Urban Affairs Committee.