Bill > S4452

Introduced Session

The "New Jersey Neighborhood Homes Investment Act," establishes a gross income tax credit for certain residential developments. This bill is intended to complement the federal Low Income Housing Tax Credit program, which supports affordable rental housing, but is not designed to facilitate the construction or rehabilitation of owner-occupied homes. The bill would authorize a project sponsor, who is financing the construction or substantial renovation of one or more qualified residences, to obtain a credit against taxes otherwise due under the gross income tax. The tax credit would be in an amount equaling the amount by which the reasonable development costs of the qualified project exceed the amount to be paid by a qualified homeowner in an affordable sale. However, the bill also prohibits the tax credit from exceeding 35 percent of the lesser of the total reasonable development costs, or 80 percent of the median sales price for a new home in the State. Further, the bill also directs the New Jersey Housing and Mortgage Finance Agency (HMFA) to adopt rules and regulations to establish an alternative calculation of the tax credit amount to be permitted for a substantial rehabilitation of a home already owned by a qualified homeowner. In this circumstance, the credit is not to exceed the amount by which the reasonable development costs of the substantial rehabilitation exceed the increase in the assessed value of the home that results from the substantial rehabilitation. Under the bill, a qualified project consists of either: (1) the substantial rehabilitation of a qualified residence that is owned by a qualified homeowner, as defined in the bill; or (2) the construction of a qualified residence to be purchased by an eligible purchaser in an affordable sale. A sale qualifies as affordable if the sale does not exceed the median household income of the county, by household size, multiplied by three. Under the bill, an eligible purchaser or qualified homeowner is required to have a household income of 140 percent, or less, of the median household income for the State. The bill permits a residence to be included as a part of a qualified project if the residence:· consists of real property affixed on a permanent foundation;· consists of: (1) a building that is comprised of four or fewer residential units; (2) a condominium unit; or (3) a house or an apartment owned by a cooperative housing corporation; · is located within the designated area of a qualified project for which HMFA has made an allocation; and· is located in a qualified census tract, as defined in the bill. When entering an affordable sale conducted in compliance with the bill, the bill requires an eligible purchaser to certify an intention to reside in the home for no less than five years. If the qualified homeowner moves out before these five years are completed, then, depending on how close to five years the homeowner came to residing in the home, the bill requires the homeowner to pay HMFA a penalty of between 10 percent and 50 percent of the amount by which the price that the qualified homeowner sold the home for exceeds the initial affordable sales price, or, if the qualified homeowner has moved out but has not sold the home, between 10 percent and 50 percent of the amount by which the updated assessed value of the home exceeds the initial affordable sales price. The bill directs the Executive Director of HMFA to adopt rules and regulations, in consultation with the Director of the Division of Taxation in the Department of the Treasury, on or before the first day of the fourth month following enactment. The bill takes effect on the first day of the fourth month following enactment.

Committee Categories

Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 05/19/2025)

Official Document