A bill making its way through the Legislature would overhaul the state’s affordable housing laws while also doing away with the largely defunct Council on Affordable Housing.

The Assembly version of the bill, A-4, passed that body on Feb. 12. The Senate version, S-50, was reported favorably out of the Senate Community Affairs Committee on Jan. 25 and was then sent to the Senate Budget and Appropriations Committee.

The legislation would abolish COAH, reset some of the parameters that allow lawsuits to force development, called builder’s remedy lawsuits, and reorganize the process of calculating housing obligations, which would be under the Department of Community Affairs instead of a special master appointed by the courts.

The legislation also adds ways that municipalities can gain bonus credits that offset some of their obligations. Included as paths to bonus credits are development of affordable housing on previously nonresidential land, development on land the municipality pays for and development in partnership with a nonprofit developer.

Some have expressed concern that changes to bonus credits could make it more difficult for municipalities to meet their obligations since some towns depend upon bonus credits for up to 25% of their obligations.

Housing is defined as affordable when total housing expenses do not exceed 30% of a resident’s gross income. The housing is categorized as moderate-income, low-income and very low-income. For moderate-income housing a resident must be making between 50% and 80% of the area’s median income. For low-income that number is 50% or lower, and for very low-income it is 30% or less.

History

The issue of affordable housing has a nearly 50-year history in New Jersey. In the 1975 case Southern Burlington County NAACP v. the Township of Mount Laurel, the state Supreme Court ruled that each municipality has a responsibility for its fair share of affordable housing. The case became known as Mount Laurel I.

In 1983 the courts reaffirmed the 1975 ruling and set up a system of enforcement through builder’s remedy lawsuits. Through these lawsuits the courts could permit a project to go forward that would otherwise fail to meet the town’s zoning requirements, and it could award the builder a higher density for housing units.

In 1985 the Fair Share Housing Act was passed and an executive agency, COAH, was established. Within two years the first round of affordable housing obligations was defined, with a second round coming in 1993.

By 2008 new legislation outlawed regional contribution agreements, which had allowed wealthier municipalities to pay poorer towns to take their affordable housing obligations.

In 2015 the courts, in what has become known as Mount Laurel IV, transferred enforcement of affordable housing obligations to the trial court system and away from COAH and the executive branch.

By 2018 a decision by Mercer County Superior Court Judge Mary C. Jacobson involving the towns of Princeton and West Windsor established a methodology for determining fair share obligations that is still used by judges today.

Now new legislation is being considered, and municipalities are preparing for round four of their housing obligations, beginning in 2025.

The Latest Bill

The new legislation seeks to accomplish three broad goals. It would streamline how housing obligations are calculated and by whom, it would return oversight of the process to the executive branch from the judiciary, and it would offer incentives for housing development. The bill has been tweaked since introduction and may still have more changes made to it.

Adam Gordon, executive director of the Fair Share Housing Center, praised the bill passed by the Assembly, saying, “Today’s vote is good news for New Jersey families who are struggling to keep up with skyrocketing housing costs.”

In a press release, the Fair Share Housing Center said, “New Jersey currently faces a significant gap in affordable housing units — an estimated shortage of more than 230,000 homes, with 14 prospective renters for each vacant home.”

Not everyone is in favor of the legislation. The vote to pass A-4 in the Assembly was 52 Democrats voting yes, 28 Republicans voting no, and one person not voting. Both District 1 assemblymen, Antwan McClellan and Eric Simonsen, voted no.

Sen. Anthony Bucco (R-25) has articulated a number of the Republican concerns with the legislation. He says that the legislation will limit bonus credits, making it harder to meet obligations, and that immunity from builder’s remedy lawsuits would be weakened in round four as compared to other rounds. Bucco adds that the dispute resolution program does not require partisan balance. A full statement of his comments is available at https://bit.ly/3Th0dQd.

Quantifying affordable housing construction or conversion is difficult. The Regional Plan Association, a nonprofit organization that develops and promotes ideas for the economic betterment of the New Jersey, New York and Connecticut metropolitan area, has calculated that in the first three rounds of the Mount Laurel process an average of 1,469 deed-restricted housing units were created per year in New Jersey. Housing advocates have argued that the housing produced was insufficient to address expanding need.

Contact the author, Vince Conti, at vconti@cmcherald.com.