Murphy signs landmark affordable housing bill, creating new framework for development – Real Estate NJ

Gov. Phil Murphy delivers the Fiscal Year 2025 Budget Address in the Assembly Chambers in Trenton on Feb. 27, 2024 — Photo by Edwin J. Torres/Courtesy: Governor’s Office

By Joshua Burd

Gov. Phil Murphy has signed a landmark bill to revamp how New Jersey calculates and enforces each town’s obligations for affordable housing, setting a path for a new phase of residential development across the state under the Mount Laurel doctrine.

Murphy joined lawmakers and other stakeholders in Perth Amboy on Wednesday to enact what he called “a monumental piece of legislation that will make housing more affordable and more accessible for working families all across New Jersey.” Namely, the measure requires the state Department of Community Affairs to determine each municipality’s obligations by year-end, while giving local governments the opportunity to devise their own plan and participate in a mediation process, with the goal of avoiding litigation and reaching a resolution by Jan. 31, 2025.

As the governor noted in prepared remarks, the bill would look to streamline a process that has been “a central public policy challenge” in the 49 years since the landmark Mount Laurel decision, in which state Supreme Court ruled that municipalities could not impede opportunities for low- and moderate-income housing.

“For decades, all three branches of government have wrestled with how to apply the principles of Mount Laurel in practice,” Murphy said. “At times, our state legislature has tried to address this issue. At other times, the process for determining affordable housing obligations was left to an executive branch agency.”

Murphy’s team and lawmakers have worked in recent months “to craft a new process where all three branches of government are involved,” he said, with the next round of state-mandated affordable housing requirements for municipalities set to begin July 1, 2025. The new framework has in turn emerged as part of a package of bills tied to affordable housing, which passed the Assembly last month and the Senate on Monday with support from key stakeholders such as the Fair Share Housing Center and the New Jersey Builders Association.

The bill’s primary sponsors include Yvonne Lopez, Craig Coughlin, Benjie Wimberly and Verlina Reynolds-Jackson in the Assembly and Troy Singleton, Nicholas Scutari and Teresa Ruiz in the Senate.

“(With) the main bill I am signing today, we are going to establish clear rules for how municipal affordable housing obligations should be calculated,” Murphy said. “It incorporates the standards that courts have used that have proved workable in practice. And this legislation will give municipalities bonus credits, as well, for constructing affordable housing where it is needed most, like near transit hubs, or for providing housing for vulnerable populations, like our senior citizens.”

Aside from abolishing the defunct Council on Affordable Housing, the bill requires the state Department of Community Affairs to complete its calculations under a newly established statutory formula and publish them by Dec. 1, 2024. It also allows a municipality to diverge from DCA’s findings as long as it adheres to the methodology established by the bill, while requiring that a town adopts its obligation by a binding resolution on or before Jan. 31, 2025, in order to shield itself from so-called builder’s remedy lawsuits that developers have long used to secure approvals for projects that included affordable housing.

Interested parties may challenge a municipality’s calculations and subsequent plans for meeting its obligations, according to the measure, giving way to a new dispute resolution program that is managed by the state judiciary.
“Under the rules of this legislation, we will bring greater efficiency to this process by having the Department of Community Affairs run the numbers,” Murphy added, according to his prepared remarks. “Towns will then have the freedom to come up with plans to meet those numbers. And, if there is a dispute, it will be handled through a mediation program run by the courts.
“This process ensures that each branch of government is doing what it does best. And it means that the affordable housing obligations, of towns across our state, will be determined much more quickly than in decades past.”