By Sunayana Prabhu
The state has set a new number of low- and moderate-income housing units that municipalities must provide by 2035.
According to new calculations released by the state Oct. 18, the 564 municipalities in New Jersey will have to build or rehabilitate over 150,000 affordable housing units in the next decade. The total need for affordable housing units estimated for the 14 municipalities within The Two River Times coverage area is 2,422, with Tinton Falls and Middletown Township taking a larger share within Monmouth County.
The New Jersey Department of Community Affairs (DCA) published a list of nonbinding calculations meant to serve as guidance for municipalities as they plan for the fourth round of affordable housing mandates which runs from 2025 through 2035. Municipalities are obligated to fulfill these quotas over the next 10 years or face a new set of obligations on top of the unfulfilled ones.
The DCA’s list categorizes obligations in two ways: “present need” and “prospective need.” The Offices of Policy and External Affairs and Local Planning Services in the Department of Community Affairs calculated these numbers. Present need is considered existing substandard housing units, whereas prospective need is calculated based on every municipality’s median household income, availability of developable land and property values.
The state’s present need, according to DCA’s calculations, is 65,410, and prospective need is 84,698, adding up to a total obligation of 150,108 units across the state. The present need established for the 14 towns in the Two River area is 821; the prospective need is set at 1,601.
The obligation breakdown within the Two River area is Atlantic Highlands, 48; Colts Neck Township, 101; Fair Haven, 92; Highlands, 30; Holmdel, 262; Little Silver, 98; Middletown, 532; Monmouth Beach, 47; Oceanport, 61; Red Bank, 208; Rumson, 117; Sea Bright, 46; Shrews- bury Borough, 132; and Tinton Falls, 632. Shrewsbury Township, one of the smallest municipalities in the area, also has the lowest obligation at 16 units.
“The calculations equip municipalities with the data needed to better plan for affordable housing options in their communities,” DCA Commissioner Jacquelyn A. Suárez said in a release. “This law presents a unique opportunity to develop ‘missing middle’ housing types, such as townhouses and duplexes, to meet the diverse needs of New Jersey families.”
The new numbers were authorized through the 2024 Affordable Housing Law signed by Gov. Phil Murphy in March. That law directed the DCA to calculate the numbers in a streamlined framework to enforce municipalities’ affordable housing responsibilities under the State’s Fair Housing Act and the New Jersey Supreme Court’s Mount Laurel doctrine of 1975. The Mount Laurel doctrine ruled that each municipality has a constitutional obligation to provide a realistic opportunity for the construction of its fair share of affordable housing. The numbers are recalculated every 10 years in cycles known as rounds.
The first round began in 1987; rounds two and three followed every 10 years. The objective was to ensure housing access for all individuals, prevent exclusionary zoning and reduce housing segregation.
Municipalities that fail to meet their affordable housing targets risk losing zoning powers due to builder’s remedy lawsuits from developers, another measure set by the New Jersey Supreme Court in 1983. The purpose of the lawsuits is to allow builders to sue municipalities to force the rezoning of properties for high-density, multifamily housing developments which contain an affordable housing element,known as inclusionary zoning.
“I am grateful to the New Jersey Department of Community Affairs for their timeliness in calculating this data and their partnership in advancing our shared goal of expanding access to affordable housing,” Murphy said in the release. “We look forward to seeing this law implemented and benefiting families across the Garden State.”
However, several municipalities, citing the lack of resources and infrastructure to support new developments, are not only disputing the new numbers but challenging the state’s affordable housing mandate itself.
“We believe the numbers are flawed,” said Tony Mercantante, Middletown’s township administrator. According to Mercantante, Middletown currently has 782 affordable housing units with another 113 in various stages of approval. In addition to these 895 units, the township “has 441 units that the state does not recognize because they were built before 1980.”
Overall, Middletown has created 1,336 deed-restricted units for residents of low and moderate incomes, “likely more than any municipality in Monmouth County,” said Mercantante. In prior rounds, Middletown also funded the development of 500 additional units in other municipalities through nearly $10 million of Regional Contribution Agreements (RCAs), which have not been permitted since 2005. RCAs are contractual agreements between two municipalities that voluntarily enter to transfer a portion of a municipality’s fair share obligation to another municipality within its housing region.
While not currently involved in any legal action against the state, Mercantante said Middletown is currently pursuing “political actions” in an attempt to reform these laws. He noted that the township is currently engaged in three separate builder’s remedy lawsuits with developers seeking to potentially develop over 1,500 units of housing, which would include about 300 affordable units on six separate properties, four of which are owned by the same entities that own Foodtown and Circus Liquors.
The major qualm about the state’s “unfunded mandate,” according to Mercantante, is that these projects are “primarily funded through allowing developers to overbuild with excessive densities of market-rate housing to help them subsidize the affordable units. For a developer to construct 80 affordable units, the development of 400 market-rate units is required, leading to absurdly poor planning in areas that should not be developed at these densities,” he explained. He said reestablishing the RCA program would be beneficial “to direct development to areas that have jobs, transportation and infrastructure to support high-density development, rather than environmentally sensitive green fields and flood zones.”
A comparatively smaller municipality, Little Silver is saddled with building 98 affordable units in the next 10 years. Presently, the borough has eight affordable units in town and is considering adding three tofive more, although there are no formal plans yet. With the state’s new calculations “everything is on the table,” Little Silver Mayor Bob Neff said, “including challenging the statute itself and the number assigned by the state.”
Neff perceives the state’s approach to affordable housing as “well-meaning, but often unreasonable, particularly in towns like Little Silver with insufficient buildable land and infrastructure to accommodate such a large number.”
The state has announced various initiatives to help municipalities develop housing aligned with the law, such as new bonus credits, financing options and credits to meet their obligation.
The “bonus credit” system allows certain housing projects – age-restricted housing, housing for individuals with special needs, and other location-specific projects, such as housing near mass transit stations – to count as more than one unit toward a municipality’s housing requirements.
A new Affordable Housing Dispute Resolution Program aims to aid in resolving disputes regarding municipalities’ obligations.
Additionally, NJ Housing Opportunities for Municipal Equity and Success (NJHOMES), set to launch in early 2025, is designed to provide financial and technical support and other tools to help municipalities develop housing aligned with community needs.
The state has also allocated over $108 million through the Affordable Housing Trust Fund to support various housing projects, particularly those serving vulnerable populations, including veterans and individuals with special needs.
According to the nonprofit advocacy group Fair Share Housing Center (FSHC), there is a shortage of over 200,000 affordable homes for extremely low-income residents in New Jersey. “Housing shortages hurt the state’s overall economy. All the essential workers who keep our towns functioning need to live somewhere,” said Adam Gordon, FSHC executive director, in a press statement Oct. 18, shortly after DCA posted its fourth round of calculations. “This is an opportunity for municipalities to prioritize sensible and equitable growth, redevelopment, and infrastructure investments that will benefit their communities for generations to come.”
Municipalities now have until Jan. 31, 2025, to adopt the DCA’s numbers or provide their own calculation consistent with New Jersey law, and until June 30, 2025, to adopt specific plans for how to address that number.
The article originally appeared in the October 31 – November 6, 2024 print edition of The Two River Times.
