NJ News

The 4th Round of New Jersey Affordable Housing Obligations: A Transit Friendly Perspective

New calculations mandate over 146,000 units of affordable housing. TOD incentives in the law reduce obligations and ease infrastructure strain.

The New Jersey Department of Community Affairs (DCA) has released its calculations outlining the affordable housing obligation that municipalities will need to accommodate over the next decade. These calculations were mandated by a law signed by Governor Phil Murphy in March, establishing a new framework to determine and enforce municipal affordable housing obligations under the state’s Mount Laurel Doctrine and Fair Housing Act.

Governor Phil Murphy signing a law.
Courtesy of the Office of Governor Phil Murphy

The DCA took a three-step approach in determining these obligations. Beginning with an evaluation of present need, DCA ascertained the number of substandard existing housing units currently occupied by low- and moderate-income households using three criteria: (1) the number of housing units lacking complete kitchen facilities, (2) the number of housing units lacking complete plumbing facilities, and (3) the number of overcrowded units built over 50 years ago. DCA utilized the Department of Housing and Urban Development’s (HUD) Comprehensive Housing Affordability Strategy (CHAS) dataset, which contains municipality-level data on Low- and Moderate-income households from a special tabulation of the American Community Survey’s 2017-2021 5 Year Estimates. The dataset, however, only measures housing construction based on the decade built, so DCA used pre-1980 housing for its 50-year metric. These metrics identified 65,410 substandard housing units statewide.  

Next, DCA calculated prospective need based on the rate of regional population change for low- and moderate-income households. DCA used the rate of change between the 2010 and 2020 Census, divided by 2.5, to estimate the number of affordable housing units required for new households. DCA identified a regional prospective need of 84,698 affordable units.  

To determine the final obligation number for each municipality, DCA used data on the change in municipal nonresidential land valuation, land capacity for new development, and household weighted income capacity, along with present and prospective need calculations. The final calculation mandates the development of over 146,000 units across all municipalities in New Jersey. However, if the obligation in a single municipality exceeds 1,000 units or 20 percent of their existing number of households, the municipality can lower its prospective need obligation.  

Municipalities have until January 2025 to either approve the State’s numbers or submit its own calculations demonstrating the present and prospective need as well as affordable housing capacity. Developers, residents, activists, or other key stakeholders can challenge these municipal calculations, which would lead to a judicial decision. Additionally, local officials have until June 2025 to adopt plans that outline how they will comply with the affordable housing mandate. 

Click on your municipality to view its housing obligation.

Transit-Oriented Development Perspective 

While the released calculations do not mention transit, the housing obligation law offers bonus credits for affordable housing built in specific locations, including near transit facilities. Under the law, affordable housing within a half-mile radius — or within one mile in Garden State Growth Zones — surrounding a New Jersey Transit Corporation, Port Authority Transit Corporation, or Port Authority Trans-Hudson Corporation rail, bus, or ferry station receives a one-half bonus credit. This credit means that 100 units of transit-oriented affordable housing count as 150 units toward a municipality’s obligation. However, bonus credits can apply to no more than 25 percent of a municipality’s total obligation.

The number of units obligated has raised concern among some local officials. To date, twenty-three New Jersey municipalities have filed a lawsuit against the State arguing that the law is unconstitutional and that the number of affordable housing units mandated will strain existing infrastructure. For municipalities with mass transit facilities, transit-oriented development (TOD) could help alleviate this strain by reducing increased traffic congestion, especially if the TOD is mixed-use and pedestrian- and bicycle-friendly. TOD incentives would also reduce the number of mandated housing units. Programs like the state’s NJ Transit Village Initiative and the Transit Friendly Planning Program at NJ TRANSIT could further support municipalities by fostering partnerships and gaining technical assistance that could help support new transit-oriented development.

 
Click to read the full report and look at each municipality’s obligation here.