Bill > S4251

Introduced Session

This bill would abolish the Council on Affordable Housing (COAH), initially established by the "Fair Housing Act," and would establish a process to enable a municipality to determine its own present and prospective fair share affordable housing obligation based on the formulas established in the bill, as calculated by three court-appointed obligation special masters, representing the northern, central, and southern areas of the State. In advance of the fourth, ten-year round of affordable housing obligations, beginning on July 1, 2025, the bill requires each obligation special master to complete these calculations, and provide for their publication, on or before November 15, 2024. The bill permits a municipality to diverge from the obligation special master's calculations in determining its obligation, in case local factors exist that make the special master's calculations unreasonable. In advance of the fourth round, the bill requires a municipality to adopt its obligation by binding resolution, on or before January 31, 2025, in order to be assured of protection from a builder's remedy lawsuit, as defined in the bill, through which a municipality may otherwise be compelled to permit development, when the fourth round begins. If the municipality meets this deadline, then the municipality's determination of its obligation would be established by default, without any approval, beginning on February 28, 2025, as the municipality's obligation for the fourth round. However, if a challenge is filed with the "Affordable Housing Dispute Resolution Program" ("program"), established in the bill, prior to February 1, 2025, the program would be required to facilitate a resolution of the dispute prior to April 1, 2025. The bill requires a municipality to establish a "housing element" to encompass its obligation, and a fair share plan to meet its obligation, in advance of the fourth round, and propose necessary changes to associated ordinances, on or before June 30, 2025, in order to be assured of protection from a builder's remedy lawsuit. A municipality would be required to submit its adopted fair share plan and housing element to the program through the program's publicly accessible Internet website. The bill permits an interested party to initiate a challenge to a municipal fair share plan and housing element, if submitted through the program on or before August 31, 2025. The program would facilitate communication over the challenge, and provide the municipality until November 30, 2025 to commit to revising its fair share plan and housing element in response to the challenge, or provide an explanation as to why it will not make all or the requested changes, or both. The bill requires municipalities to adopt associated changes to municipal ordinances on or before the end of January 2026. If a municipality fails to meet these deadlines, then the immunity of the municipality from builder's remedy litigation would end unless the program determines that the municipality's immunity shall be extended. If a municipality fails to adhere to any of these deadlines due to circumstances beyond the municipality's control, the bill directs the program to permit a grace period for the municipality to come into compliance with the timeline, the length of which, and effect of which on later deadlines, would be determined on a case-by-case basis. After providing immunity, the bill also authorizes the program to subsequently terminate immunity under certain circumstances if it becomes apparent that the municipality is not determined to come into constitutional compliance. The municipality would still be permitted to seek immunity from a builder's remedy by initiating an action in Superior Court. A court would not grant a builder's remedy to a plaintiff in exclusionary zoning litigation during certain timeframes. The deadlines for subsequent 10-year rounds of affordable housing obligations would conform to the dates established in the bill for the fourth round. In any challenge to a municipality's determination of its affordable housing obligation, or to its fair share plan and housing element, the bill requires the program to apply an objective assessment standard to determine whether or not the municipality's obligation determination, or its fair share plan and housing element, fails to comply with the requirements of the bill. Further, the challenger would be required to provide the basis for its challenge based on applicable law, and the program would have the power to dismiss challenges that do not provide such a basis. All parties would be required to bear their own fees and costs for proceedings within the program. A determination by the program as to municipal obligations or compliance certification would be considered a final agency decision, subject to review by the Appellate Division. The Chief Justice of the Supreme Court would appoint an odd number of at least three and no more than seven members to the program established by the bill, consisting of retired and on recall judges, or other qualified experts. The members and employees of the program would be considered State officers and employees for the purposes of the "New Jersey Conflicts of Interest Law," P.L.1971, c.182 (C.52:13D-12 et seq.). Administrative Director of the Courts would also establish procedures for the purpose of efficiently resolving circumstances in which the program is unable to address a dispute over compliance certification within the time limitations established in the bill. As a part of these procedures, in order to facilitate an appropriate level of localized control of affordable housing decisions, for each vicinage, the bill directs the Chief Justice of the Supreme Court to designate a Superior Court judge who sits within the vicinage, or a retired judge who, during his or her tenure as a judge, served within the vicinage, to serve as county level housing judge to resolve disputes over the compliance, of fair share plans and housing elements of municipalities within their county, with the "Fair Housing Act," when those disputes are not be resolved within the deadlines established in the bill. The Administrative Director of the Courts would adopt and apply a Code of Ethics for the program and county level housing judges modeled on the Code of Judicial Conduct of the American Bar Association, adopted by the State Supreme Court, and may establish additional more restrictive ethical standards in order to meet the specific needs of the program and of county level housing judges. Each municipality's determination of its fair share obligation would be made through the guidance of the preliminary findings of three obligation special masters, also appointed by the Chief Justice of the Supreme Court, representing each of the northern, central, and southern areas of the State. For the purposes of the bill, the boundaries of the northern area would correspond with the boundaries of the affordable housing regions 1 and 2, the central area would correspond with the boundaries of affordable housing regions 3 and 4, and the southern area would correspond with affordable housing regions 5 and 6. No later than November 15 of the year prior to the year when a new round of housing obligations begins, the bill requires each obligation special master to calculate regional need and municipal present and prospective obligations in accordance with formulas established in the bill. The calculations of each obligation special master would be made publicly available for municipalities to use in determining their present and prospective obligations. Each obligation special master would determine each municipality's fair share obligation by applying the methods used by the Superior Court for the third round, as summarized in the bill. The obligation special master would determine its present need obligation by estimating the existing deficient housing currently occupied by low-and moderate- income households within the municipality. Each obligation special master would next determine the regional prospective need, upon which to base the municipal obligation, by estimating the regional growth of low- and moderate-income households during the housing round at issue. The bill would simplify the regional need estimation from the processes used in previous rounds in order to ease the administrative burden that has been associated with this process. First, projected household change for a 10-year round in a region would be estimated by establishing the household change experienced in the region between the most recent federal decennial census, and the second-most recent federal decennial census. Although this relies on historical data, recent household change in a region is relevant to estimating future household change and associated housing need. This household change would be divided by 2.5 to estimate the number of low- and moderate-income homes needed to address population change in the region, thereby determining the regional prospective need for the 10-year round. After determining regional prospective need, the obligation special master would determine each municipality's fair share prospective obligation of that regional prospective need. To do this, an obligation special master would first determine whether a municipality is a qualified urban aid municipality, and if so, the municipality would not have a prospective need obligation. If the municipality is not a qualified urban aid municipality, the obligation special master would be required to calculate three factors necessary for the prospective fair share determination. First, the obligation special master would calculate the equalized nonresidential valuation factor, representing the municipality's share of the regional change in the value of nonresidential property. In prior rounds, this calculation, concerning nonresidential (commercial and industrial) property values, has been adopted as a representation of a municipality's employment potential. Data available from the Division of Local Government Services in the Department of Community Affairs (DCA) would be used for this calculation. Next, an income capacity factor would be determined, using a formula comparable to one used in prior rounds to estimate the municipality's ability to absorb low- and moderate-income households. The municipality's land capacity factor would then be determined, representing the municipality's relative share of undeveloped land, available to accommodate development, using data made available by the Department of Environmental Protection. The average of these three factors would be determined and multiplied by the regional prospective need to determine the municipality's gross prospective need. Finally, each obligation special master would adjust for secondary sources of housing supply and demand by first calculating demolitions of low- and moderate-income housing, and housing creation through residential conversions. Each obligation special master would subtract a municipality's share of conversions from the sum of each municipality's allocated share of gross prospective need and demolitions of low- and moderate-income housing. After applying these secondary sources, the municipality's prospective fair share obligation for the 10-year round would be established. A municipality would ultimately be permitted to reduce its prospective need if necessary to prevent establishing a prospective need obligation that exceeds 1,000 units in total or 20 percent of the estimated occupied housing stock at the beginning of the 10-year round, whichever limitation results in a lower number. The bill permits a municipality to be credited for as much as 15 percent of its affordable housing obligation through transitional housing, and defines "transitional housing" as temporary housing, including but not limited to, single room occupancy housing or shared living and supportive living arrangements, that provides access to on-site or off-site supportive services for very low-income households who have recently been homeless or lack stable housing. The bill would expressly prohibit the use of municipal affordable housing trust fund moneys for administrative costs, attorney fees, or court costs to obtain immunity from a builder's remedy, or to contest the municipality's fair share obligation, or use of the trust fund moneys while a municipality does not have immunity from builder's remedy litigation. The bill would further expressly allow a municipality to expend a portion of its affordable housing trust fund on actions and efforts reasonably related to the determination of its fair share obligation and the development of its housing element and fair share plan. The bill would prohibit a municipality from receiving bonus credit for any particular type of low- or moderate-income housing, unless authority to obtain bonus credit is expressly provided by the "Fair Housing Act," as amended and supplemented by the bill. The bill expressly authorizes 1/2 unit of bonus credit for: (1) each unit of very low-income housing; (2) each affordable unit in a community residence for persons with head injuries, developmental disabilities, mental illness, or in transitional housing; (3) each affordable housing unit located within a 1/2-mile radius, or one-mile radius for projects located in a Garden State Growth Zone, surrounding a New Jersey Transit Corporation, Port Authority Transit Corporation, or Port Authority Trans-Hudson Corporation rail, bus, or ferry station, including all light rail stations; and (4) each affordable unit of age-restricted housing, provided that a bonus credit for age-restricted housing would not be applied to more than 10 percent of the age-restricted units that count towards a municipality's affordable housing obligation for a 10 year round. The bill would amend various parts of the statutory law to remove references to COAH, and to transfer rulemaking authority, to the extent necessary, from COAH to DCA and the New Jersey Housing and Mortgage Finance Agency (HMFA). The bill directs HMFA to update the Uniform Housing Affordability Controls within nine months following the effective date of the bill, and adjust certain affordability control periods to establish a sliding scale for deed restrictions based on the percentage of affordable units set aside in a given project in which projects with a higher percentage of affordable units have a shorter required deed restriction. The bill permits HMFA to establish a shorter deed restriction period of at least 10 years for accessory dwelling units or units within mobile home parks. The bill would appropriate $12 million to the program, and $4 million to the Administrative Director of the Courts, from the General Fund, for the purposes of carrying out their respective responsibilities for the fourth round of affordable housing obligations. The bill would take effect immediately, and would apply to each new round of affordable housing obligations beginning after enactment of the bill.

AI Summary

Committee Categories

Nick Scutari (D)*,  Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 12/21/2023)

Official Document