UPDATE (3/26/2024): On March 20th, Gov. Phil Murphy signed into law Bill A4 / S50 that passed the legislature as well as other pieces of affordable housing legislation. Some of the changes from the bill that the Assembly passed to the one signed into law are:
Another key aspect to the law is in addressing prior-round obligations in HEFSPs, towns will have to demonstrate how sites that did not develop in the prior round remain "realistic" to produce affordable housing (including any needed changes to zoning) and, if the site no longer remains realistic, the site shall be replaced with an alternative site generating an equivalent number of affordable units.
In addition, on March 20, the governor signed a series of other bills into law addressing affordable housing, including:
It has been almost 15 years since the New Jersey Legislature attempted to tackle New Jersey's affordable housing laws and the Mount Laurel doctrine (remember S-1?). But in the past few months, the Legislature is at it again. Legislation designed to address New Jersey's Fourth Round affordable housing cycle has been making its way through the Legislature and was passed in the Assembly on February 12th and is in committee with the Senate. Bill A4 (S50) (the "Bill") seeks to codify the upcoming Fourth Round, which starts July 1, 2025.
With the Third Round affordable housing cycle (which technically began in 2000) coming to an end in 2025, the question on developers' minds over the past year has been "What is going to happen with the Fourth Round?" Many believe that without legislative intervention, it would remain with the courts as it has since 2015. The Bill seeks to codify the procedure going forward for the Fourth Round so municipalities and developers can plan in advance.
In broad strokes, the Bill officially abolishes the Council on Affordable Housing, which has effectively been paralyzed since the Governor Christie administration, and creates the Affordable Housing Dispute Resolution Program (the "Program"), consisting of up to seven members appointed by the Chief Justice of the New Jersey Supreme Court. Under the Bill, in 2024 the Department of Community Affairs would calculate regional affordable housing need based on the methodology Judge Jacobson outlined in her March 8, 2018 landmark decision. In order for a municipality to receive immunity from "builder remedy" lawsuits for the Fourth Round, it would have to adopt a resolution determining its fair share obligation (using the methodology) by January 31, 2025 and submit the same to the Program. Interested parties can challenge the municipality's calculated obligation by February 28, 2025. Once the obligation is set, a municipality would have until June 30, 2025 to adopt a Housing Element & Fair Share Plan (HEFSP) to address the obligation, with interested parties having the opportunity to challenge such HEFSP by August 31, 2025. If a challenge is filed, the municipality would have until December 31, 2025 to resolve any challenge or provide an explanation as to why it will not make changes to the HEFSP. Any unresolved dispute would then go to the county Mount Laurel judges.
Other keys aspects of the current version of the Bill are as follows:
This alert only addresses certain key aspects of the current Bill, which is a sweeping codification of the process and procedure for municipal compliance with affordable housing obligations. Our office will continue to track this Bill through the Legislature as it could be revised further. But regardless of whether it becomes law, both developers and municipalities should be planning their strategy for the Fourth Round.
Day Pitney Real Estate Partner Steven J. Wernick is featured in RentCafe article "Unlocking Miami-Dade's Housing Potential."
Day Pitney Real Estate Partner Steven J. Wernick is featured in the South Florida Business Journal article "28-Story Tower With Over 100 Apartments Planned in Miami."
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Day Pitney Real Estate, Environmental and Land Use practice co-chair Craig Gianetti was featured in Gothamist article "Court Tells Wealthy NJ Town: We'll Decide Where You'll Put Affordable Housing."
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Day Pitney Real Estate, Environmental and Land Use Partner Steven Wernick is featured in the Miami Herald article "The End of Single-Family-Only Home Suburbs? Miami-Dade Zoning Rule Impact Could Be 'Sweeping'."
Day Pitney Real Estate Partners Nicole Magdziak and Thomas Malman represented firm client Kushner, a real estate development and management firm headquartered in New York City, on a multimillion dollar mixed use residential and retail development in the Long Branch, NJ’s Lower Broadway redevelopment zone.
Day Pitney Real Estate, Environmental and Land Use practice co-chair Craig Gianetti was featured in Law360 article "NJ Bill Paves An Aggressive Affordable-Housing Path."
Day Pitney Real Estate, Environmental and Land Use Counsel Joseph A. Ruiz was featured in the South Florida Business Journal article "Local Distillery Proposes Location in Miami-Dade Warehouse."
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