New Jersey Reorganizes Its Affordable Housing Process - What Residential Developers Need to Know

Monday, May 6, 2024

The New Jersey Legislature recently adopted a landmark series of bills that completely reorganize the process for providing affordable housing under the Mt. Laurel doctrine. Developers of residential projects that include affordable housing should be aware of the procedures established in the new law and the need to engage with municipalities now about sites that they may be interested in developing.

New Jersey municipalities will soon begin the process of preparing new Housing Element and Fair Share Plans (“HEFSP”) for the upcoming 10-year Fourth Round of affordable housing obligations to be established pursuant to the recently enacted revisions to the New Jersey Fair Housing Act (P.L. 2024, c.2). Developers who have acquired sites for future development or who are evaluating such sites, whether or not they are currently zoned for affordable housing, should engage with the municipality during this planning process to increase their chances of having the site they are interested in included in the HEFSP, instead of relying on a challenge to a plan that does not include the site. A municipality that adheres to the deadlines in the new law will have immunity from exclusionary zoning litigation (including builder’s remedy suits), assuming that it complies with the other requirements of the new law.

Rather than leaving the determination of affordable housing obligations to a State agency similar to COAH or to litigation in the courts, the new law establishes the Affordable Housing Dispute Resolution Program (the “Program”) within the Judiciary Branch to review and approve the municipal determinations of their fair share obligation and HEFSPs and adjudicate challenges to them. By January 31, 2025, municipalities must adopt a resolution establishing their affordable housing obligation for the Fourth Round pursuant to formulas set forth in the new law, and file the resolution with the Program. Then, no later than June 30, 2025, municipalities must adopt their HEFSP and file it with the Program along with drafts of their proposed implementing zoning ordinances and related resolutions.

In preparing its HEFSP, a municipality is required to consider lands that are most appropriate for low and moderate income housing, including lands of developers who have expressed a commitment to provide low and moderate income housing. Accordingly, developers should engage with municipalities now while the new HEFSPs are being prepared, or risk not having their land included

Additionally, developers should not rely on the fact that their land is included in the current HEFSP. Under the new legislation, municipalities are required to assess their prior round obligations and, in doing so, retain in their HEFSP any sites for which they have a contract with a developer or for which the developer has filed a complete subdivision or site plan application. However, the municipality must demonstrate how sites that were not built during the prior rounds continue to present a realistic opportunity for affordable housing, and a municipality may replace such sites if they no longer present such an opportunity with one or more alternate sites that can yield an equivalent number of units. The municipality would then be able to rezone the replaced site. 

Where a site that was zoned to require affordable housing prior to July 1, 2020 is replaced in the HEFSP and a complete application for subdivision or site plan approval for the replaced site has not been filed prior to June 30, 2025, the new law establishes a rebuttable presumption that the replacement is valid. Accordingly, developers with sites that are in the current HEFSP may want to consider either entering into an agreement with the municipality to provide affordable housing or submitting a subdivision or site plan application prior to the June 30, 2005 deadline in order to safeguard their site. If a developer chooses to wait to challenge the replacement of its site, it will have the burden of proving by clear and convincing evidence that either the replaced site continues to provide a realistic opportunity or that the replacement sites do not.


If you have questions about the new law, including the various deadlines that municipalities must meet and each of the required steps, as well as time frames and criteria for challenge of municipal actions or inactions, contact Charles B. Liebling or Sandy L. Galacio, Jr., or your Windels Marx relationship lawyer.


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