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Fair Share Affordable Housing Guide (2024)
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Executive Summary
This guide, updated in December 2024, focuses on developing effective municipal housing plans for the Fourth Round of affordable housing obligations in New Jersey (2025-2035). It provides guidance to municipalities, planners, developers, nonprofits, and advocates on understanding and participating in the process of creating realistic low- and moderate-income housing opportunities as required by the Mount Laurel Doctrine and the Fair Housing Act. The guide covers key principles, standards, incentives, and timelines, including the implications of New Jersey's new affordable housing law, P.L. 2024, c. 2, which aims to streamline and strengthen enforcement of affordable housing mandates.
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--- Document: Fair Share Affordable Housing Guide (2024) Document ---
December 2024
DEVELOPING
EFFECTIVE HOUSING
PLANS IN THE FOURTH
ROUND
A Guide for Municipalities, Planners,
Developers, Nonprofits, and Advocates
Introduction
Affordable Housing Need and Municipal Fair Share Housing
Obligations
The Mount Laurel Doctrine, Fair Housing Act, and COAH: A Brief
History, 1971-2024
Options for Municipalities to Satisfy Affordable Housing
Obligations
Defining Affordable Housing
Preparing a Housing Element and Fair Share Plan
New Jersey’s New Affordable Housing Law, P.L. 2024, c. 2
(Assembly Bill 4/Senate Bill 50)
02
09
05
04
13
07
Key Principles, Standards, and Incentives in Developing
Municipal Housing Plans
Municipal Affordable Housing Trust Funds and Development
Fees
Participating in Fourth Round Municipal Housing Planning:
Timelines, Key Dates, and Action Steps
Impact of Affordable Housing on Communities and People’s Lives
Conclusion
Resources and Citations
16
23
26
28
31
31
32
TABLE OF
CONTENTS
Bonus Credit Incentives and Limitations
25
ACKNOWLEDGEMENTS
This guide updates and revises “Developing Effective Municipal Housing
Plans: A Guide for Nonprofits and Advocates on Implementing the Ne
w Jersey Supreme Court’s March 2015 Decision on Fair Share Housing
,” published in May 2015 by the Housing and Community Developm
ent Network of New Jersey, and prepared by David N. Kinsey, Vito Gallo,
Fair Share Housing Center, and staff of the Housing and Community
Development Network of New Jersey.
We also wish to thank the staff of Fair Share Housing Center and the
Housing and Community Development Network for their contributions to
this guide.
Finally, we wish to acknowledge and sincerely thank the guide’s primary
author, David N. Kinsey, PhD, FAICP, whose expertise throughout Mount Laur
Laurel’s long history has been invaluable to New Jersey’s communities.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
2
Determining municipal fair share
housing obligations is a critical step in
housing planning; the guide explains the
statewide fair share housing
methodology codified by the new law
and how the state calculates municipal
affordable housing obligations.
Almost two-thirds of New Jersey’s
municipalities have adopted court-
approved Third Round (1999-2025)
HEFSPs since the Supreme Court’s Mount
Laurel IV decision in 2015. Under the new
law, municipalities will be required to
provide the status of the affordable
housing mechanisms in their Third
Round plans and create new HEFSPs to
address the Fourth Round obligation.
This guide describes the purpose,
required contents, and typical process
for preparing and adopting these plans.
Municipalities can create affordable
housing opportunities that satisfy their
fair share housing obligations in several
ways. The guide identifies the principal
compliance mechanism options, their
key features, and advantages and
disadvantages, while using case studies
of recent actual developments to
illustrate the most common
mechanisms. The guide summarizes
several important principles, standards,
and rules, established in the new
The new law governs how the Fourth
Round (2025-2035) and future rounds of
municipal fair share housing obligations
are established and satisfied, through
changes in master plans, zoning, and
other initiatives in a municipal Housing
Element and Fair Share Plan (HEFSP)
certified by the state. This guide aims to
help local officials and staff, planners,
developers, advocates, and residents
understand and participate in this
process, as municipalities prepare and
adopt updated municipal HEFSPs, create
realistic low- and moderate-income
housing opportunities, and obtain state
certification of affordable housing
compliance.
This guide begins with a brief history of
the Mount Laurel Doctrine, its origins,
achievements, and role in the production
of affordable housing in New Jersey over
the past 50 years. Next, the guide
explains New Jersey’s new affordable
housing law, P.L. 2024, c. 2 (Assembly Bill
4/Senate Bill 50) and its key provisions
regarding municipal housing plans.
In March 2024 the Governor and State Legislature enacted significant legislation
amending the New Jersey’s Fair Housing Act (FHA). It established new, streamlined,
transparent, and more effective procedures, standards, and mechanisms for the
continued implementation of the Mount Laurel Doctrine, New Jersey’s constitutional
requirement that all municipalities must provide their fair share of needed affordable
housing.
INTRODUCTION
This guide aims to help local
officials and staff, planners,
developers, advocates and citizens
understand and participate in this
process.
amendments to the FHA and regulations
adopted by the Council on Affordable
Housing (COAH) that have not been
invalidated, that should be considered
and followed in preparing municipal
HEFSPs.
The amendments to the FHA also
codified and changed the incentives for
some compliance mechanisms, which
this guide highlights. Securing adequate
financial resources for affordable
housing development is always a
challenge in ensuring that local housing
plans are more than “paper” plans. The
guide addresses the most significant
financial resources and provides an
update on municipal affordable housing
trust funds.
To assist participants in fair share housing
planning at the municipal level, this guide:
Finally, to underscore the crucial point
that safe, healthy, affordable housing
helps communities, families, and
individuals in myriad ways, the guide
concludes with some findings of rigorous
New Jersey-based research on the
impacts of affordable housing.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
3
Explains what steps municipalities
must take
Provides timelines and key dates
for Fourth Round planning
Describes opportunities for public
comment and influence
Notes any judicial proceedings that
may be anticipated
COMMUNITY AT LYNWOOD
PROJECT TYPE:
100%
affordable,
rental
DEVELOPER:
Homes by TLC
PROJECT ADDRESS: Lynwood Ave, Hamilton Township, NJ 08609
YEAR COMPLETED: 2019 TOTAL UNITS: 16
SELECTED FUNDING SOURCES: $2.5 million from HOME Housing Production
Investment fund, additional funding from Hamilton Township’s Affordable Housing
Trust Fund.
DESCRIPTION: This development features 7 duplex and two single family homes on
a formerly vacant site. The units have in-unit laundry and energy efficient
appliances. The development matches the character of the neighborhood and
residents have access to a playground on the same block.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
4
AFFORDABLE HOUSING
Housing that is priced to be
affordable and restricted to
households with incomes at or below
a certain percentage of the area
median income (AMI).
FAIR SHARE HOUSING
The portion of a region’s housing
needs for which a municipality must
create realistic housing
opportunities for very low-, low- and
moderate-income households.
INCLUSIONARY HOUSING
A residential development that
includes a substantial percentage of
income-restricted affordable
housing, as well as units rented or
sold at market rates.
LOW INCOME
A gross monthly income less than 50% of
the regional median household income,
adjusted for household size.
LOW-AND MODERATE-INCOME
HOUSING
Affordable housing occupied by and
limited to income-qualified low and
moderate income households.
MODERATE INCOME
A gross monthly income between 50% to
80% of the regional median household
income, adjusted for household size.
VERY LOW INCOME
A gross monthly income less than 30% of
the regional median household income,
adjusted for household size.
GLOSSARY
Several words and phrases will be used throughout this guide and are defined here:
HOUSEHOLD SIZE
COUNTY
INCOME RANGE
(30-80% OF AREA MEDIAN INCOME)
Family of 4
Essex County
$38,825 - $103,533
Family of 3
Burlington County
$30,969 - $82,584
Single person
Ocean County
$27,311 - $72,830
EXAMPLES OF ANNUAL HOUSEHOLD INCOMES
ELIGIBLE FOR AFFORDABLE HOUSING IN 2024 [1]
DEFINING AFFORDABLE HOUSING
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
5
The Mount Laurel Doctrine requires all
municipalities (and state agencies with
land use authority) to plan, zone for, and
take affirmative actions to create
realistic opportunities for their “fair
share” of their region’s present and
prospective need for housing affordable
to low- and moderate-income families
and individuals.
First articulated by the New Jersey
Supreme Court in two landmark zoning
and civil rights decisions, Mount Laurel I
(1975) and Mount Laurel II (1983), and
extrapolated upon in a series of legal
cases known as the Mount Laurel cases
(most recently in Mount Laurel IV [2015]),
the Mount Laurel Doctrine prohibits
economic discrimination against the
poor by the state and municipalities in
their exercise of land use powers.
This doctrine on exclusionary zoning and
affordable housing arose from efforts by
the longtime Black community of Mount
Laurel Township (Burlington County) to
block being forcibly removed from their
once-rural community as it underwent
rapid suburbanization in the 1960s.
When Mount Laurel Township stymied
the attempt of a local nonprofit to
develop 36 affordable garden
apartments, the residents organized
and, assisted by, Camden Regional Legal
Services attorneys, began the Mount
Laurel litigation marathon in 1971
culminating in a state Supreme Court
decision known as Mount Laurel I which
outlawed exclusionary zoning and
required all municipalities to provide
their “fair share” of affordable housing.
Civil rights and housing advocates, as
well as developers, pursued similar
litigation in central and northern New
Jersey as well in the 1970s-1980s,
resulting in Mount Laurel II in 1983, which
upheld Mount Laurel I and invited the
legislature to draft legislation and
implement the doctrine and created
avenues for enforcement of the doctrine
including the builder’s remedy.
In direct response to the Mount Laurel II
decision, in 1985 the Legislature and
Governor enacted the Fair Housing Act,
which established the Council on
Affordable Housing (COAH) as the state
agency responsible for creating,
implementing and enforcing municipal
affordable housing obligations. COAH
developed and implemented its fair
share housing calculation and allocation
methodology, adopted procedural and
substantive rules, and reviewed and
certified municipal housing elements and
fair share plans in two rounds, from
1987-1993 and 1993-1999. More than
one-half of New Jersey’s municipalities
participated in the COAH process. Some
non-participating municipalities were
sued for non-compliance with Mount
Laurel and other municipalities opted to
The Mount Laurel Doctrine
prohibits economic discrimination
against the poor by the state and
municipalities in their exercise of
land use powers.
THE MOUNT LAUREL DOCTRINE, FAIR HOUSING ACT,
AND COAH: A Brief History, 1971-2024
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
6
have compliance determined by trial
courts.
As its Second Round came to a close in
1999, COAH paused, and delayed
proposing Third Round rules and fair
share obligations until 2004. After the
Appellate Division of the Superior Court
invalidated critical parts of these rules in
2007, COAH adopted its second iteration
of Third Round Rules in 2008, which the
Appellate Division again significantly
invalidated in 2010. COAH ultimately failed
to adopt constitutionally-compliant Third
Round rules.
In 2015, the New Jersey Supreme Court
then reinvigorated enforcement of the
Mount Laurel Doctrine in Mount Laurel IV.
The Supreme Court declared COAH
“moribund,” required enforcement of the
Mount Laurel Doctrine through trial
courts, and offered municipalities the
incentive of limited immunity to prepare
new housing plans under court
jurisdiction. It also ruled that the previous
fair share methodology from the earlier
rounds and standards that they did not
invalidate should be used in municipal
housing plans.
In 2017, in Mount Laurel V the Supreme
Court ruled that municipalities were
responsible for fair share obligations that
accrued during the 16-year gap period of
COAH malfeasance between 1999-2015. In
the nine years since Mount Laurel IV, more
than 340 municipalities have reached
court-approved Third Round (1999-2025)
settlement agreements with Fair Share
Housing Center.
Since Mount Laurel II in 1983, significant
affordable housing of various types —
family, senior, supportive housing,
rental, and homeownership — has been
built throughout New Jersey. This
includes apartments, townhouses,
duplexes, single-family homes, assisted
living residences, and accessory units,
and mixed-use developments — totaling
at least 75,000 units that can be
attributed to implementation of the
Mount Laurel Doctrine.
In addition, significant market-rate
housing affordable to middle income
families has been built throughout New
Jersey, together with set-asides of
income-restricted affordable housing, in
multifamily inclusionary developments
that were previously prohibited by
exclusionary zoning.
Since Mount Laurel IV in 2015, the pace
of affordable housing production has
roughly doubled, with more than 2,700
affordable units built per year during
2015-2022 — twice the rate under
COAH. More than 21,000 new deed-
restricted affordable homes have been
built since Mount Laurel IV and in all,
more than 50,000 new affordable
homes are anticipated to be developed
throughout New Jersey during the 2020s
under Third Round municipal housing
plans.
Since Mount Laurel IV in 2015, the
pace of affordable housing
production has been roughly
doubled.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
7
NEW JERSEY’S NEW AFFORDABLE HOUSING LAW
P.L. 2024, C. 2 (ASSEMBLY BILL 4/SENATE BILL 50)
Abolishing COAH.
Codifying the fair share methodology based on the “Jacobson Methodology”
as established by a Mercer County trial court in 2018 following a lengthy tria
l that ultimately resulted in standards widely accepted by both housi
ng advocates and municipalities in interpreting the methodology as directed
by Mount Laurel IV. The New Jersey Department of Community Affairs (DCA
) is tasked with making initial calculations of Present Need and Prospective
Need as guidance for municipalities.
Directing the New Jersey Housing and Mortgage Finance Agency (NJHMFA) to
update rules that provide vital statewide standards on affordability controls
, bedroom distributions in affordable housing developments, design a
nd integration of affordable housing units, and affirmative market
ing requirements to ensure those in need of housing are aware of the
opportunities that are created.
Establishing longer minimum affordability control periods for new affordable
housing — 40 years for rental housing and 30 years for for-sale housing —
with options for further extensions to preserve housing affordability.
Restructuring and codifying the system of bonus credits and establishing caps
and minimums on certain affordable housing types.
Requiring municipalities, if they wish to avoid builder’s remedy lawsuits, to
amend their master plans and adopt a HEFSP that addresses the status of
compliance towards the Prior Round obligations and identifies the
municipality’s Present Need and Prospective Need, detailing how those
housing needs will be satisfied. This plan is a binding agreement between the
municipality and the state on how affordable housing opportunities will be
created over the ten-year Fourth Round.
Establishing a streamlined process for submission and certification of HEFSPs
through the Affordable Housing Dispute Resolution Program. The Progra
m requires participating municipalities to submit a HEFSP and supporti
ng documentation to address affordable housing obligations. Should disputes
1.
In preparation for the Fourth Round of affordable housing obligations, in early
2024 the Governor and Legislature made significant amendments to the Fair
Housing Act and related housing laws to strengthen and streamline enforcement
of the Mount Laurel Doctrine:
2.
3.
4.
5.
6.
7.
8
(CONT.) arise among interested parties as to the realistic opportunity the
plan provides for the provision of affordable housing, the Program will
provide opportunities for mediation. Special county-level housing judges
may be appointed to resolve disputes over municipal compliance with the
Fair Housing Act and the Mount Laurel Doctrine.
Directing DCA to monitor municipal collection, management, and
spending of development fees in local affordable housing trust funds to
implement HEFSPs.
Preventing delays in devising and implementing local housing plans by
placing municipalities at risk of losing immunity from exclusionary zoning
litigation if they miss housing planning deadlines or stymie housing
proposed in a certified HEFSP.
Requiring both the state and local governments to post on publicly
accessible websites key documents and decisions on their housing
planning, determinations, mediations, certifications, and affordable
housing trust funds to significantly increase transparency and keep the
public informed.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
9.
10.
THE RESIDENCES AT NORTH VILLAGE
PROJECT TYPE: Inclusionary, mixed-use development, rental
DEVELOPER: Dykstra Associates YEAR COMPLETED: 2019
PROJECT ADDRESS: 1 Prosper Pl, Sparta, NJ 07871
TOTAL UNITS: 60 units; 27 affordable units (45% set aside)
DESCRIPTION: This inclusionary rental development is part of a large mixed-use
community that includes townhomes, single family homes, a shopping center
with a grocery store, and an assisted-living facility. Amenities include in-unit
laundry and a neighborhood park.
8.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
9
AFFORDABLE HOUSING NEED AND
MUNICIPAL FAIR SHARE HOUSING OBLIGATIONS
How much affordable housing for low-
and moderate-income households is
needed in New Jersey and where?
There is a clear approach to defining
affordable housing need under the
Mount Laurel Doctrine, with many
ambiguities from past rounds clarified
by the new legislation. While this
number falls far short of the full housing
needs in the state, the Mount Laurel
Doctrine has been held by courts to only
address a portion of overall housing
need. These questions can be answered
one of two different ways:
New Jersey currently has a total of about
3.4 million households, of which 39%
(about 1.3 million households) have
incomes below 80% of median
household income and are considered
low- and moderate-income households
under the Mount Laurel Doctrine and
the Fair Housing Act.[2] The current
(2023) median household income in New
Jersey is $99,781[3], which means that
on a statewide basis households with
annual incomes less than $79,823 are
considered low- and moderate-income,
with adjustments for county, region, and
household size (households with more
people have a higher median income,
households with fewer people have a
lower median income).
One approach to calculating housing
need is to determine the share of
household income devoted to housing
costs, whether a mortgage, taxes, etc.
for homeowners, or rent and utilities for
renters. Households who spend more
than 30% of their income on rental
housing costs are considered to be
“cost-burdened” and their housing is not
considered “affordable,” under
longstanding, nationally accepted
standards. For homeownership, the
standard is a maximum of 28% of
household income. Consequently, these
cost-burdened households have less
disposable income to spend on food,
transportation, health care, clothing,
and other essentials of daily life.
By this metric, 69.6% of New Jersey’s
low- and moderate-income households
need affordable housing, with 927,105
New Jersey low- and moderate-income
households being cost-burdened.[4]
However, COAH excluded cost-burdened
households and their affordable
housing needs from its calculations of
municipal fair share housing obligations
under the Fair Housing Act, a
determination upheld by the Supreme
Court in Mount Laurel IV in 2015.
Consequently, a different approach to
defining affordable housing need has
been used under the Mount Laurel
Doctrine. This approach projects the
by calculating the number of
households who spend too much of
their income on housing costs or
by projecting future housing needs
for a selected target year for a
target group of households in
targeted communities
A.
B.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
10
housing needs of anticipated future new
low- and moderate-income households
in New Jersey by region and then
allocates these regional housing needs
fairly to each region’s municipalities. This
component of housing need is called
“Prospective Need” under the Mount
Laurel Doctrine and the Fair Housing Act.
In addition to the need for new
affordable housing for projected new
households, low- and moderate-income
households currently living in
substandard and overcrowded housing
often need housing rehabilitation
assistance. This component of housing
need is called “Present Need” under
Mount Laurel Doctrine and the Fair
Housing Act.
A third component of housing need is
the Prospective Need allocated in the
past that may not yet have been
satisfied and is a continuing municipal
responsibility. This component of
housing need is called “Prior Round”
obligation and was calculated by COAH
in 1994 for the period 1987-1999, its
PROJECT TYPE:
100% affordable,
brownfield
redevelopment;
for-sale
DEVELOPER: Morris Habitat for Humanity YEAR COMPLETED: 2024
PROJECT ADDRESS: 26-32 Bennett Avenue, Randolph, NJ 07869
TOTAL UNITS: 25 condominiums
SELECTED FUNDING SOURCES: The property was acquired through tax foreclosure
and Randolph Township donated it to Morris Habitat. The township covered
environmental remediation, demolition, site design, approvals, and permitting.
Funding for development came from a $3 million federal grant and Morris Habitat
for Humanity.
DESCRIPTION: Residents have affordable 30-year mortgages provided by Morris
Habitat, and the condominiums have 30-year deed restrictions. Amenities include a
community room, a play area, and a bike path to nearby stores and restaurants.
E
THE CROSSINGS AT BENNETT AVENUE
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
11
Under the new law, Prospective Need
for the Fourth Round is calculated by
region based on 40% of the change in
the numbers of households counted by
the U. S. Census Bureau in the 2010
and 2020 censuses by region, a total of
84,697 housing units statewide.
The Prospective Need of each of six
regions is then allocated to each
region’s municipalities using the
average of three allocation factors:
B.
C.
A.
First and Second Rounds. The new law
requires any unfulfilled Prior Round
obligation, including for the Third Round
(1999-2025), to be addressed in Fourth
Round local housing plans.
Under the new law, Present Need is
determined by estimating the existing
deficient (substandard) housing by
municipality occupied by low- and
moderate-income households, using data
collected, analyzed, and published by the
U.S. Census Bureau. Certain qualifying
municipalities, designated by DCA for
additional state financial assistance and
known as “urban aid municipalities,” are
not allocated a Prior Round obligation or a
Prospective Need obligation. Many already
have significant income-restricted
affordable housing built over the past
several decades. They are not, however,
exempted from their Present Need
responsibilities.
The new law requires any
unfulfilled Prior Round obligation,
including for the Third Round
(1999-2025), to be addressed in
Fourth Round local housing plans.
The municipal share of regional
nonresidential ratables chang
e during 1999-2023 (nonresidenti
al valuation factor), based on d
ata published by DCA’s Division of
Local Government Services
The municipal share of regional
household income differences (income capacity factor), based on U. S. Census Bureau estimates
The municipal share of
developable land in the region
, based on “land use/land cove
r” geographic data published by
the New Jersey Departmen
t of Environmental Protec
tion, environmental constraints
data, and other data sets. Th
is land capacity factor
weights developable land bas
ed on its Planning Area type in
the State Development and Re
development Plan, as well as in
Meadowlands, Pinelands, and Highlands regional
plans.
COMPONENTS OF A
TOWN’S AFFORDABLE
HOUSING RESPONSIBILITY:
Rehabilitation/Present
Need
Prospective Need
Prior Round Obligation
1.
2.
3.
Region 1
Region 2
Region 3
Region 4
Region 5
Region 6
The new law codified the six regions
used in the Prospective Need
methodology, each grouping three or
four counties:
Region 1:
Bergen, Hudson, Passaic, and Sussex
Region 2:
Essex, Morris, Union, and Warren
Region 3:
Hunterdon, Middlesex, and Somerset
Region 4:
Mercer, Monmouth, and Ocean
Region 5:
Burlington, Camden, and Gloucester
Region 6:
Atlantic, Cape May, Cumberland, and
Salem
Furthermore, the new law caps a
municipality’s Prospective Need for the
Fourth Round at 1,000 affordable
housing units. Also, a municipality may
lower its Fourth Round Prospective
Need to avoid an obligation that
exceeds 20% of the total households
counted in the municipality in the most
recent U.S. Census in 2020.
Finally, as required by the new law, DCA
issued its report to the Governor,
Legislature, and public with its
determinations of recommended Fourth
Round fair share housing obligations,
both Present Need and Prospective
Need for 2025-2035, by region and
municipality, by October 20, 2024, as
guidance to municipalities for their fair
share determinations in accordance
with the new law.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
12
TOTAL PROSPECTIVE NEED:
84,698 UNITS
TOTAL PROSPECTIVE NEED:
84,698 UNITS
ROUND FOUR REGIONAL
PROSPECTIVE NEED (2024-2025)
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
13
Housing planning has been an integral part
of local land use planning in New Jersey
since enactment of the Fair Housing Act.
Municipalities must, under the Municipal
Land Use Law as amended by the Fair
Housing Act in 1985, adopt a housing plan
element of the master plan in order to
exercise the power to zone and regulate
land use.
As defined by the new law, the “housing
plan element” is a portion of the
municipal master plan and is prepared and
adopted by the municipal planning board.
A “fair share plan,” according to the new
law, is the document in which the
municipality details specifically the
affirmative actions it will take to create a
“realistic opportunity” to satisfy its fair
share housing obligations, including
proposed or adopted ordinances and
resolutions. Under the new law, it is the
responsibility of the municipality, i.e., the
municipal governing body, to adopt the
Housing Element and Fair Share Plan
(HEFSP).
The Fair Housing Act, as amended by the
new law, specifies the essential elements
of the municipal housing plan, which must
be designed to “achieve the goal of access
to affordable housing to meet present and
prospective housing needs” and pay
“particular attention to low- and moderate-
income housing”:
stock, including probable future low-
and moderate-income housing
Analysis of the municipality’s
demographic characteristics
Analysis of the municipality’s
employment characteristics
Determination of the municipality’s
present and prospective fair share
for low- and moderate-income
housing (i.e., Present Need and
Prospective Need, and its capacity to
accommodate its present and
prospective housing needs)
Consideration of the lands most
appropriate for construction of low-
and moderate-income housing and
structures most appropriate for
conversion and rehabilitation for low-
and moderate-income housing,
including land proposed by
developers committed to providing
low- and moderate-income housing
Analysis of the extent that the
municipal ordinances and other local
factor advance or detract from the
goal of preserving multigenerational
family continuity
For municipalities within the
Highlands, an analysis of compliance
with the Highlands Regional Master
Plan of lands in the Highlands
Preservation Area and in the
Highlands Planning Area for
Highlands-conforming municipalities,
with consideration of Highlands build
out reports and opportunities for
redevelopment
Inventory of the municipality’s housing
stock, including affordable housing and
substandard housing capable of being
rehabilitated
Projection of the municipality’s housing
PREPARING A HOUSING ELEMENT
AND FAIR SHARE PLAN
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
14
The new law provides for an adjustment
of the Prospective Need obligation, based
on a lack of vacant land, which divides
the Prospective Need into the Realistic
Development Potential (RDP), to be
satisfied in the Fourth Round, and the
Unmet Need, to be addressed by
incentivizing opportunities for affordable
housing development as land becomes
available.
For municipalities that calculate RDP, the
new law requires the identification in the
HEFSP of sufficient parcels likely to
redevelop during the current round of
obligations to address at least 25% of the
Fourth Round Unmet Need through
realistic zoning, or the municipality must
demonstrate why it is unable to identify
such parcels and realistic zoning.
The housing plan must be prepared by a
New Jersey licensed professional planner,
who conducts the required analyses and
surveys, in consultation and cooperation
with other municipal staff, professionals
(e.g., attorney and engineer), consultants,
planning board members, governing
body members, developers, advocates,
property owners, and the public. At a
minimum, the planning board must give
ten days published public notice of the
required public hearing on adoption,
revision, or amendment of the housing
plan element, provide notice to adjoining
municipalities, and make available the
proposed plan for public review.
PROJECT TYPE:
100% affordable, infill housing, transit
oriented development, rental
DEVELOPER: Homeless Solutions
PROJECT ADDRESS: 23 Abbett Ave
Morristown, NJ 07960
YEAR COMPLETED: 2018
TOTAL UNITS: 2 units
SELECTED FUNDING SOURCES:
Property acquired with a $300,000
interest-free mortgage provided by
NJHMFA Special Needs Housing Trust
Fund
DESCRIPTION: This development
utilized an empty lot to create two two-
bedroom units that are affordable to
low income families. The building fits
the character of the neighborhood, and
residents are walking distance from
businesses, a park with a playground,
and a NJ transit rail station.
ABBETT AVENUE DUPLEX
Analysis of consistency with the State
Development and Redevelopment
Plan, including water, wastewater,
stormwater, and multi-modal
transportation
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
15
CORNERSTONE AT
SEASIDE HEIGHTS
At a minimum, the governing body must
give ten days published public notice of the
required public hearing, of any proposed
zoning ordinance amendment to
implement the housing plan element.
In practice, the housing element and fair
share plan is typically prepared as a single,
integrated document, discussed informally
with and by the planning board and
governing body, and made available to the
public in draft form and adopted form at
the municipal clerk’s office, and often
posted on the municipal website.
A typical plan provides required
background data, details sites and projects
slated to produce affordable housing,
provides maps locating sites and
portraying any site constraints, includes
draft and adopted zoning amendments,
contains agreements with developers and
evidence of site plan and use variance
approvals, documents claimed credits for
completed affordable housing, and
provides municipal revenue projections, as
well as funding and bonding commitments,
to support affordable housing activities.
Once adopted, the new law requires
municipalities to promptly file the HEFSP
with the state within 48 hours on the public
website established by the Program.
Municipalities may be expected to build
their Fourth Round housing elements and
fair share plans on the base of previously
adopted plans, most prepared since 2015.
DESCRIPTION: This four story project redeveloped an aging motel, lumberyard, and
hardware store. All units are affordable for residents earning less than or equal to
60% AMI, and five units are reserved for residents with special needs. Residents are
in walking distance from shopping and public transportation, and amenities include
a fitness center and a roof deck.
PROJECT TYPE:
100% affordable, age-restricted, rental
DEVELOPER: Walters Group
PROJECT ADDRESS: 314 Bay Blvd,
Seaside Heights, NJ 08751
YEAR COMPLETED: 2019
TOTAL UNITS: 91 units
SELECTED FUNDING SOURCES:
12.9 million in construction financing
from NJHMFA, $15.5 million in federal
Community Development Block Grant
- Disaster Recovery assistance, $6.9
million from a 4% LIHTC.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
16
OPTIONS FOR MUNICIPALITIES TO SATISFY THEIR
AFFORDABLE HOUSING OBLIGATIONS
Municipalities have several well-established options to consider and adopt in their
housing plans for satisfying their constitutional affordable housing obligations. At
the outset it is critical to recall the Supreme Court’s applicable standards established
in Mount Laurel II in 1983 for determining compliance.
First, a “realistic opportunity” must be provided for satisfying the municipality’s fair
share obligation, with “realistic” depending “… on whether there is a likelihood-to the
extent economic conditions allow-that the lower income housing will actually be
constructed.” Second, municipal compliance must be “… determined solely on an
objective basis: if the municipality has in fact provided a realistic opportunity for the
construction of its fair share …, it has met the Mount Laurel obligation …, if it has
not, then it has failed to satisfy it.”
PRESENT NEED – REHABILITATION
The Present Need component of the fair share obligation signifies that low- and
moderate-income households are living in substandard and overcrowded
housing in the municipality. Present Need obligations tend to be highest in urban
municipalities and other municipalities with a high existing population of lower-
income households.
To satisfy this need, most municipalities establish, fund, and administer a local
housing rehabilitation program, administered by municipal staff, consultants,
or a county community development agency housing improvement program.
Housing rehabilitation must be available to rental properties that serve low-and
moderate-income households. A municipality’s Present Need obligation can
alternatively be satisfied through new construction of affordable housing.
100% AFFORDABLE (FAMILY OR SENIOR)
These are developed by the private and nonprofit sectors, often in partnership
with municipalities, and typically relying for substantial equity from federal Low-
Income Housing Tax Credits (LIHTC) allocated on a competitive basis by the New
Jersey Housing and Mortgage Finance Agency and other subsidies. Mostly
historically developed as rental housing — though the new legislation creates
additional incentives for partnerships with nonprofits for homeownership —
FOR ALL OPTIONS, THREE INGREDIENTS ARE ESSENTIAL TO ACTUALLY CREATE
AFFORDABLE HOUSING:
2.
1.
a suitable site or property with permissive zoning or land use approvals,
a developer with capacity, and
adequate financial resources.
A.
B.
C.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
17
(CONT.) municipalities often support 100% affordable developments by donating
surplus land or buildings waiting for conversion, as well as by providing
negotiated public subsidies from municipal housing trust funds, bonding, and
tax abatements. The New Jersey Affordable Housing Trust Fund is another,
critical source of funding for smaller 100% affordable developments. This option
is popular from the municipal perspective not only because of the funding
options, but also because under the new law, 100% affordable housing projects
developed with sufficient municipal contributions of land or funding, most likely
rental housing, will generate one bonus credit per unit.
CAMP KILMER HOMES
PROJECT TYPE: 100% affordable, redevelopment, rental
DEVELOPER: A collaboration between Edison Housing Authority, for-profit
development company Albert Group, and development nonprofit Monarch Housing.
YEAR COMPLETED: 2015
TOTAL UNITS: 120; 30 units (25% set aside) of supportive housing for homeless
individuals.
SELECTED FUNDING SOURCES: $5 million from a NJ HMFA construction loan, $2.1
million from a NJHMFA permanent mortgage, $3.5 million from NJHMFA Community
Development Block Grant Disaster Recovery funds.
DESCRIPTION: Residents have access to a playground and the development is close
to shopping centers and a commuter rail station. As a condition of the former
military base’s closure, Kilmer Homes made 25% of the affordable housing units (30
units) available to the homeless. The Kilmer Collaborative was established by the
Middlesex County Continuum of Care, an organization of social service agencies
serving the homeless. Triple C Housing provides case management and support
services for the formerly homeless residents.
PROJECT TYPE:
inclusionary,
redevelopment, rental
DEVELOPER: First
Montgomery Group
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
18
202 PARK
PROJECT ADDRESS: 202 Park Blvd, Cherry Hill, NJ 08002
YEAR COMPLETED: 2021 TOTAL UNITS: 192; 29 affordable units (15% set aside)
SELECTED FUNDING SOURCES: 5 year payment-in-lieu-of-taxes (PILOT)
DESCRIPTION: This project redeveloped a motel into a mixed-use residential
development with amenities including in-unit laundry, a fitness center, and a pool.
Affordable units are integrated with market-rate units, and the property is across
from a large county park.
INCLUSIONARY DEVELOPMENT
This is mixed-income private sector development, including housing affordable
and restricted to low- and moderate-income households as well as market-rate
housing. Inclusionary development typically involves a set-aside of 20% of the
total units as affordable housing in homeownership projects and 15% of the
total units in rental projects, although increasingly a 20% set-aside is also the
norm for rental projects, and some municipalities have succeeded in getting
developments built with higher set-asides as well, often with creative
approaches to making developments more financially feasible or in particularly
economically strong markets. Sale or rental of the market-rate units internally
subsidizes the cost of income-restricted affordable units. The affordable units
in these mixed-income developments, whether townhouses, apartments,
stacked flats, or small lot houses, should be indistinguishable from the
exterior from — and integrated among — the market-rate units.
Inclusionary development may be implemented through zoning by a new
zoning district that requires or allows inclusionary development, depending on
the municipal objective, or by an overlay zone with inclusionary incentives.
Inclusionary development may also be instituted as a compliance mechanism as
part of a municipally-adopted redevelopment or rehabilitation plan, which acts
as the zoning for a designated redevelopment area. Inclusionary
development is increasingly less likely to be new construction on a greenfield
site; obsolete or underutilized nonresidential structures should be converted
3.
PROJECT TYPE:
Inclusionary,
redevelopment,
rental
DEVELOPER: First
Montgomery Group
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
19
(CONT.) to residential use with an inclusionary component, if there is agreement
from the owner to abandon the current uses on the site. Inclusionary zoning is a
prime example of incentive-based affordable housing development, as the
private sector will respond positively to economically feasible densities, set-
asides, and design and development standards on suitable, appropriately
located sites.
SUPPORTIVE AND SPECIAL NEEDS HOUSING
Different groups of people with low incomes have special needs for a high-
quality, supportive place to live, including: people with mental illness and
developmental disabilities, people with adult onset physical disabilities, disabled
veterans, victims of domestic violence, youth aging out of foster care, and
homeless individuals in need of affordable housing.
The new law codifies an important incentive for municipalities to welcome this
housing type; each unit of special needs or permanent supportive housing
counts as two credits, and the unit of credit against fair share obligations is the
4.
PROJECT TYPE: 100% affordable,
supportive housing, rental
DEVELOPER: Project Freedom
PROJECT ADDRESS: 2 Justice Samuel A.
Alito Jr. Way Hamilton, NJ 08619
YEAR COMPLETED: 2023
TOTAL UNITS: 72
SELECTED FUNDING SOURCES: $14
million through LIHTC, $1.2 million
through NJHMFA’s Special Needs
Housing Trust Fund, additional funding through NJ DCA and Hamilton Township’s
Affordable Housing Trust Fund.
DESCRIPTION: Each unit in the development is accessible and contains energy
efficient appliances. The property is located near the city’s downtown which gives
residents easy access to a health clinic, library, YMCA, retail businesses, and a bus
stop. Eighteen of the units were designed for individuals with developmental
disabilities or mental illnesses.
FREEDOM VILLAGE AT HAMILTON WOODS
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
20
(CONT.) bedroom. The new law also allows credits for transitional housing for up
to 10% of a municipality’s fair share obligation. Municipalities seeking to welcome
such state-licensed housing in their plans may provide land and/or funding,
acquire houses suitable for conversion to group homes, amend zoning to make
such housing permitted uses, support use variances, negotiate a PILOT (payment
in lieu of taxes), and take other affirmative steps to create this type of affordable
housing that is developed mostly, but not entirely by the nonprofit sector. The
Special Needs Housing Trust Fund, administered by the New Jersey Housing and
Mortgage Finance Agency, and the National Affordable Housing Trust are two
examples of funding sources for supportive and special needs housing.
ASSISTED LIVING RESIDENCES
An assisted living residence is a specialized housing type licensed by the New
Jersey Department of Health and Senior Services that provides apartment-style
living and congregate dining and other services, typically for older people.
Assisted living residences can be developed under an inclusionary model in which
a percentage of the units are set aside for low- and moderate-income households.
State law on licensing assisted living residences developed since 2001 requires
the reservation of 10% of the beds for Medicaid-eligible individuals and provides
that any beds so reserved shall be recognized as fulfilling low- and moderate-
income housing requirements in municipal ordinances. Municipalities can provide
for in their housing plans and encourage development of inclusionary assisted
living residences by adopting permissive zoning and taking other affirmative
steps.
ACCESSORY DWELLING UNITS (ADUS)
An accessory dwelling unit is a self-contained, independent housing unit created
either within an existing house, through conversion of an existing structure
attached to a house, by an addition to the house, or by construction of a separate
unit on the same lot as an existing house. Municipalities can encourage and make
possible the creation of accessory affordable dwelling units by first amending
zoning to permit a second dwelling unit on an otherwise single-family lot and by
providing financial assistance to homeowners to undertake the necessary
construction or renovations.
Homeowners need to place a deed restriction on the unit to ensure that the
accessory unit remains affordable to lower-income households. Formerly known
as “accessory apartments,” this is not yet a very common, productive compliance
mechanism. A maximum of ten units or ten percent of a municipality’s fair share
obligation, whichever is greater, may be addressed with ADUs, unless the
municipality has demonstrated a successful history of implementing this
compliance mechanism.
5.
6.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
21
NEWTOWN VILLAGE
PROJECT TYPE:
100% affordable, market to
affordable, manufactured
housing
PROJECT ADDRESS: 199 Maple
St, Robbinsville Twp, NJ 08691
YEAR COMPLETED: 2019
TOTAL UNITS: 149; 50 year deed
restrictions
SELECTED FUNDING SOURCES:
Robbinsville’s affordable housing
trust fund, town bonds
MARKET TO AFFORDABLE PROGRAM
The new law authorizes and incentivizes credits against fair share obligations for
municipal programs that purchase existing market-rate housing, deed restrict the
units, and sell or rent the housing (once rehabilitated, if necessary) to low- and
moderate-income households. Municipalities subsidize the difference between the
cost to acquire and renovate the market-rate unit and the restricted price or rent
of the housing for income eligible households. A maximum of ten for-sale
7.
“The residents of Newtown Village, formerly
known as Mercer Mobile Home Park, petitioned
the Township to take over the park in 2008. It
was a long road to get there, but we
successfully took ownership of the park and
renamed it Newtown Village on July 1, 2019.
We were committed to upgrading the critical
infrastructure of the park to improve the lives
of the residents. Since 2019, we have replaced
the sewer system, water lines and recently
completed repaving all the streets. We are very
proud of our affordable housing record and
remain committed to providing safe and
affordable housing to our residents well into
the future.”
— David Fried, Mayor of Robbinsville
DESCRIPTION: As units become
available, Robbinsville Township
rehabilitates or replaces the
manufactured homes and restricts the deed of each pad. They have facilitated
necessary upgrades to the park including water quality and flow rate upgrades in
2023, which were financed through the New Jersey Water Bank.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
22
(CONT.) units and ten rental units, or 10% of a municipality’s fair share
obligation, whichever is greater, may be addressed with this compliance
mechanism, unless the municipality has demonstrated a successful history of
implementing this a market-to-affordable program.
EXTENDING EXPIRING AFFORDABILITY CONTROLS
The new law also authorizes and incentivizes credits against fair share
obligations for extensions of the term of affordability controls that preserve
existing affordability for housing built after April 1, 1980, once rehabilitated up
to code, if necessary. Affordable housing developed under COAH’s First Round
rules were generally subject to 20-year minimum terms of affordability
controls, later extended to a 30-year maximum in COAH’s Second Round rules
and in 2004 changed to a minimum of 30 years in the Uniform Housing
Affordability Controls rules (UHAC) adopted by NJHMFA. This means that
controls on affordable units built in the mid-1980s generally began to expire in
the mid-2000s, while 30-year controls generally began to expire in the 2010s.
Municipalities may extend the term of controls through agreement with the
housing owner or by other means and options authorized by not validated
COAH rules, local ordinances, and the deed restrictions on affordable
ownership and rental units. While this mechanism does not increase the supply
of affordable housing, it does ensure that affordable units that have been
created continue to be available only to income-eligible households.
REDEVELOPMENT
Redevelopment under New Jersey’s Local Redevelopment and Housing Law is
not an affordable housing type, but rather an increasingly popular mechanism
for rebuilding communities by transforming distressed areas, a process that
makes available sites that may be redeveloped to include affordable housing.
Municipalities may designate redevelopment or rehabilitation areas that
meet statutory criteria, then prepare and adopt redevelopment or
redevelopment plans, either with or without the possibility of condemnation to
facilitate site assembly by a municipally designated redeveloper. Certain types
of redevelopment, such as certain transit-oriented development and
redevelopment of commercial buildings, are eligible for bonus credits under
the new law.
8.
9.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
23
ACCESSIBLE HOUSING
KEY PRINCIPLES, STANDARDS, AND INCENTIVES IN
DEVELOPING MUNICIPAL HOUSING PLANS
In developing a new, amended, revised,
or updated Fourth Round municipal
housing element and fair share plan, all
participants in the plan preparation,
adoption, review, and certification
process must be mindful of certain well-
established principles and standards, as
well as some new and revised incentives.
The Fair Housing Act, including the 2024
amendments, codifies many of these
principles and standards. The new law
importantly adopts rules previously
adopted by COAH on “municipal credits,
adjustments, and compliance
mechanisms” unless the rules have been
“contradicted by statute … or binding
court decisions.” As a result, N.J.A.C. 5:93
(known as the Prior Round Rules) and
portions of N.J.A.C. 5:97 (known as the
Third Round Rules) remain relevant and
binding for Fourth Round local housing
planning. A non-exhaustive list of these
principles and standards follows.
“REALISTIC OPPORTUNITY”
It bears reiterating at the outset that
the bedrock principle for determining
whether a municipal housing plan
satisfies a municipality’s constitutional
housing obligations is whether a
“realistic opportunity” has been
created for satisfying the obligations.
As the Supreme Court stated in Mount
Laurel II, “…whether the opportunity is
‘realistic’ will depend on whether there
is in fact a likelihood—to the extent
economic conditions allow—that the
lower income housing will actually be
constructed.”[5]
SITE SUITABILITY
A critical component of the “realistic
opportunity” evaluation is whether the
sites proposed for affordable housing
development are “suitable.” In Mount
Laurel II, the Supreme Court
established general site suitability
standards that are still valid decades
later: “… the proposed project ... [must
be] ... located and designed in
accordance with sound zoning and
planning concepts, including its
environmental impact.” Also, “it is only
if the proposed development ... is
contrary to sound planning principles,
or represents a substantial
environmental hazard, that it should
be denied.” COAH rules have
articulated these principles and
standards with more precision, with a
dozen site suitability criteria, such as
access to appropriate streets,
compliance with flood hazard area
constraints, and adjacent to
compatible land uses (see N.J.A.C.
5:94-4.5 and N.J.A.C. 5:97-3.13).
MINIMUM FAMILY AFFORDABLE
HOUSING
The new law requires municipal
housing plans to provide that at least
50% of the housing addressing the
Prospective Need obligation is for
families with children, without age
restrictions.
SENIOR CAP
The new law allows municipalities to
include age-restricted affordable
housing in their housing plans, but
only up to a new cap of 30% of the
total number of homes addressing
municipal Prospective Need
obligations.
2
3
4
1
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
24
MINIMUM RENTAL AFFORDABLE
HOUSING
The new law requires municipal
housing plans to provide for at least
25% of Prospective Need obligations to
be satisfied by rental affordable
housing, and requires that at least 50%
of rental affordable housing be
available to families with children.
HOUSING AFFORDABLE TO LOW-
INCOME HOUSEHOLDS
Municipal housing plans must ensure
that at least 50% of the low- and
moderate-income housing units made
available in a municipality are
affordable to low-income households.
HOUSING AFFORDABLE TO VERY LOW-
INCOME HOUSEHOLDS
Municipal housing plans must ensure
that at least 13% of the low- and
moderate-income housing units made
available in a municipality are
affordable to very low-income
households.
INCLUSIONARY DEVELOPMENTS
A minimum 20% set-aside of affordable
housing is required, to the extent
economically feasible, in new
inclusionary developments within the
jurisdiction of New Jersey’s regional
planning agencies: Meadowlands
Commission, Pinelands Commission,
ort Monmouth Planning Authority, and
Highlands Council. Throughout the
state, municipalities must provide,
through their zoning powers, incentives
to ensure the feasibility of inclusionary
development, including increased
densities and reduced costs. COAH’s
6
7
Second Round rules, adopted in the
early 1990s, established a
presumptive minimum gross density
of six units per acre with a 20% set-
aside for inclusionary developments
and ten units per acre with a 15%
set-aside for rental inclusionary
developments. However, multi-family
inclusionary and affordable housing
developments at significantly higher
densities have become common
throughout New Jersey since 2015 in
the implementation of Mount Laurel
IV.
ACCESSIBLE AND ADAPTABLE
AFFORDABLE HOUSING UNITS
The Fair Housing Act and COAH Third
Round Rules require that newly
constructed affordable housing units
be adaptable, and that the first floor
of townhouses and multistory
buildings be accessible, in
accordance with the Barrier Free
Subcode of the State Uniform
Construction Code.
8
9
5
The 2024 amendments to the Fair
Housing Act also codify, revise, and
expand to ten the types of affordable
housing development in a municipal
housing plan eligible for bonus credits
against a municipality’s Prospective
Need obligations. The choice among
these incentives is up to municipalities,
with two caveats: first, the municipality
may opt for only one bonus type per
affordable housing unit, and, second, a
maximum of 25% of the municipality’s
Prospective Need may be satisfied by
these bonus credits.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
25
ACCESSIBLE HOUSING
FOURTH ROUND BONUS CREDIT TYPES
1.0 BONUS CREDIT
PER AFFORDABLE UNIT
0.5 BONUS CREDIT
PER AFFORDABLE UNIT
Special needs or permenant
supportive housing.
Municipal contribution (land or
funds for at least 3% of the cost)
to a 100% affordable project.
Market-to-affordable program for
rental or ownership units.
Partnership sponsorhip with non-profit
developer for affordable ownership
units.
Transit-oriented development within
one-half mile of public transit
stations.
Age-restricted housing (capped at
10% of age-restricted housing in local
plan)
More three-bedroom units than
required by State bedroom
distribution rules.
Redevelopment of former or current
retail office, or commerical sites.
Extended affordability controls that
preserve rental affordalbe housing.
More housing affordable to very low-
income households than the minimum
13% required.
1.
The choice among these incentives is up to municipalities, with two caveats:
The municipality may opt for only one bonus type per affordable housing
unit.
A maximum of 25% of the municipality’s Prospective Need may be satisfied
by these bonus credits.
1.
2.
BONUS CREDIT INCENTIVES AND LIMITATIONS
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
26
Since the late 1980s, municipalities have
collected development fees from
residential and non-residential
development that did not include
affordable housing, for the purpose of
funding affordable housing activities,
after adopting a compliant municipal
ordinance to establish a municipal
affordable housing trust fund.
Deposited in municipal affordable
housing trust funds, this is a flexible
source that has helped many
municipalities plan, build, rehabilitate,
and preserve affordable housing to
address their fair share housing
obligations. Over time the fee schedule
has increased and is now 1.5% of the
equalized assessed value of the land
and improvement for new residential
development (provided no increase in
density is permitted), 1.5% of the
equalized assessed value of residential
additions and alterations, 2.5% of the
equalized assessed value of the land
and improvement for nonresidential
development if the land being
developed is vacant, and 2.5% of the
equalized assessed value of the
improvement for nonresidential
development on land with existing
improvements.
6 NOVAD COURT
MUNICIPAL AFFORDABLE HOUSING TRUST FUNDS
AND DEVELOPMENT FEES
PROJECT TYPE: 100% affordable,
supportive/special needs, rental
DEVELOPER: Affordable Housing
Alliance
PROJECT ADDRESS: 6 Novad Ct,
Millstone Township, NJ 08510
YEAR COMPLETED: 2025 (estimated) TOTAL UNITS: 52
FUNDING SOURCES: $1 million from National Housing Trust Fund (NHTF) and
$340,000 from HOME Housing Production Investment fund.
DESCRIPTION: This development features three 2-bedroom apartments for very
low income families who are experiencing homelessness. Each apartment has an
in-unit washer/dryer, energy efficient appliances, and individual back patios that
open to a community yard for all residents. The property is within walking distance
of various stores, restaurants, and medical facilities. Affordable Housing Alliance
partnered with Collaborative Support Systems Programs, who will connect
residents with services including transportation out of the Millstone area.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
27
ACCESSIBLE HOUSING
The 2024 amendments to the Fair Housing
Act require municipalities to include a
spending plan for current and projected
funds in municipal affordable housing
trust funds, as part of their Fourth Round
local housing plans.
The new law adds substantial public
reporting and transparency requirements
on these trust funds. For example, it also
requires DCA to establish by late 2024 and
implement standards and reporting
requirements on development fees, trust
funds, and spending plans, to enhance
accountability, transparency, and the
production and preservation of affordable
housing. To implement the new law, DCA
has required municipalities to report all
development fees collected, expended,
and retained since the inception of
municipal affordable housing trust funds.
Municipal affordable housing trust
funds... [have] helped many
municipalities plan, build,
rehabilitate, and preserve affordable
housing to address their fair share
housing obligations.
PROJECT TYPE:
100% affordable, redevelopment,
rental
DEVELOPER: Ingerman
PROJECT ADDRESS: 100 Lechner Cir,
Annandale, NJ 08801
YEAR COMPLETED: 2020
TOTAL UNITS: 66 units
SELECTED FUNDING SOURCES:
$1.2 million from a NJHMFA 9% LIHTC
DESCRIPTION: This development is an
adaptive reuse of a historic 1700s
building that became the property
management office and a community
space. Residents have in-unit laundry,
energy efficient appliances, and a
playground. It is within walking
distance of a commuter rail station
and in proximity to shopping centers.
Four units were designed to be
accessible.
THE WILLOWS AT
ANNANDALE VILLAGE
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
28
PARTICIPATING IN FOURTH ROUND MUNICIPAL
HOUSING PLANNING:
Timelines, Key Dates, and Action Steps
OCTOBER
20, 2024
The 2024 amendments to the Fair Housing Act established a clear timeline with specific
deadlines for the key steps in local housing planning leading to State certification and
implementation of a compliant Fourth Round HEFSP:
Deadline for DCA to calculate Fourth Round regional need and
municipal Present Need and Prospective Need fair share housing
obligations
Deadline for municipalities to opt into the Affordable Housing
Dispute Resolution Program (AHDRP) by adopting their
determinations of Fourth Round Present Need and Prospective Need
obligations by binding resolution committing the municipality to
adopting a HEFSP
Deadline for filing challenges to a municipality’s determination of its
Fourth Round Present Need and Prospective Need obligations
Deadline for the Affordable Housing Dispute Resolution Program
(AHDRP) to resolve disputes over challenges to municipal fair share
determinations
Deadline for municipalities to adopt and file a Fourth Round HEFSP
with the AHDRP
JANUARY
31, 2025
FEBRUARY
28, 2025
MARCH
31, 2025
JUNE
30, 2025
AUGUST
31, 2025
DECEMBER
31, 2025
MARCH
15, 2026
Deadline for filing challenges claiming that an adopted HEFSP is not
in compliance with the Fair Housing Act and the Mount Laurel
Doctrine
Deadline for a challenged municipality to commit to revising its
HEFSP to settle the challenge, or explain why it will not make all of
the requested changes; if a dispute remains at this point, then a
county-level housing judge will schedule a summary proceeding in
early 2026 to resolve
Deadline for a municipality to amend its HEFSP to incorporate any
changes from resolving challenges, if any, and adopt implementing
ordinances and resolutions
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
29
WOOD AVENUE
Encourage municipalities to plan for
and satisfy their fair share housing
obligations
Meet with planners, planning board
members, governing body members,
and mayors to urge Mount Laurel
compliance, propose options for
municipal consideration, and offer
cooperation, support, and
partnerships
Attend and participate at local public
meetings, information sessions, and
hearings on housing planning,
particularly the municipal decision
due by January 31, 2025 on the
municipal fair share determination
and commitment to adopt a HEFSP
as well as subsequent meetings and
hearings leading up to the adoption
of the HEFSP by June 30, 2025
Inquire about municipal fair share
housing obligations and how and
when the municipality intends to
comply
PROJECT TYPE:
100% affordable, supportive/special
needs, rental
DEVELOPER: Triple C Housing
PROJECT ADDRESS:
Wood Ave, North Brunswick
Township, NJ 08902
YEAR COMPLETED: 2022
TOTAL UNITS: 2 units
SELECTED FUNDING SOURCES:
$990,000 from National Housing
Trust Fund (NHTF)
DESCRIPTION: Both units in this
duplex have three bedrooms. This
development provides permanent
supportive housing for very low
income residents who have
experienced homelessness, with
access to support services provided
by Triple C Housing.
ACTION STEPS
The Governor and Legislature have
charted a clear new course for
determining, planning for, and satisfying
constitutional housing obligations
throughout New Jersey for the Fourth
Round. To ensure that effective municipal
HEFSPs are prepared, discussed openly,
adopted, timely filed with the state,
reviewed, and certified by the state, and
vigorously implemented, housing
developers, advocates, and interested
residents can and should take a variety of
action steps, including:
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
30
ACCESSIBLE HOUSING
adjustment, use of local housing
trust funds, payments in lieu of
taxes (PILOTs), and timely triggers
for municipal resolutions of intent
to bond if other public subsidies are
not available or sufficient
Encourage municipalities to meet
the deadlines established by the
2024 amendments to the Fair
Housing Act, in order to advance
the production of needed
affordable housing, while
preserving immunity and retaining
municipal flexibility in planning
choices
Monitor the review of HEFSPs by the
state through the Affordable
Housing Dispute Resolution
Program and county-level housing
judges
Object, if necessary, and challenge
unrealistic, insufficient, and
inadequate provisions of adopted
housing elements and fair share
plans filed with the state and
participate, with the assistance of
legal counsel, in mediation before
the Affordable Housing Dispute
Resolution Program and declaratory
judgment proceedings before
county-level housing judges
Request that drafts of housing plans
be available for public review and
comments, and be posted on
municipal websites
Participate at required planning board
and governing body public hearings
on consideration of proposed Fourth
Round HEFSPs
Pursue opportunities for municipally-
sponsored affordable housing
development with nonprofit partners
Encourage municipalities to establish
realistic timetables for actually getting
affordable housing built
Encourage municipalities to invest
local affordable housing trust funds in
projects to produce affordable
housing, with bonding if necessary to
ensure projects are realistic
Encourage municipalities to provide
incentives to reduce the costs of and
increase the likelihood of developing
affordable housing, such as waivers or
reductions of municipal fees, early
and truly expedited processing of
development applications by planning
boards and zoning boards of
If the municipality has in fact
provided a realistic opportunity
for the construction of its fair
share …, it has met the Mount
Laurel obligation …, if it has
not, then it has failed to satisfy
it.
— Mount Laurel II,
92 N.J. 222-223
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
31
1.0 BONUS CREDIT
PER AFFORDABLE UNIT
IMPACT OF AFFORDABLE HOUSING ON COMMUNITIES
AND PEOPLE’S LIVES
A rigorous Princeton University study of a 100% affordable housing development
completed in 2000 in suburban New Jersey found that affordable housing in
communities of higher opportunity had dramatic positive impacts on residents’
mental health, personal safety, and economic independence.
Children had more parental support for academics, could study more per week with a
quiet place to study, experienced less school disorder and violence, and attended
better, more competitive schools.
These housing opportunities had no adverse effect on crime in the community,
municipal property taxes, property values in the community, and specifically property
values in adjacent neighborhoods.[6]
CONCLUSION
New Jersey’s Mount Laurel Doctrine distinguishes the state as a national leader in
producing affordable housing and breaking down the barriers of exclusionary zoning.
After nearly a decade of progress and housing production since Mount Laurel IV, the
Fourth Round of fair share housing obligations and implementation is about to begin,
with a new path towards renewed and widespread compliance established in the 2024
amendments to the Fair Housing Act.
New Jersey’s affordable housing needs are significant throughout the state, in all
types of communities, but the new law provides important opportunities to realize the
vision of the Mount Laurel Doctrine and the Fair Housing Act.
DEVELOPING EFFECTIVE HOUSING PLANS IN THE FOURTH ROUND
32
New Jersey Fair Housing Act (codified and incorporating P.L. 2024, c. 2)
P.L. 2024, c. 2 (Assembly Bill 4/Senate Bill 50)
Fair Share Housing Center, “NJ’s New Affordable Housing Law, Assembly Bill
4/Senate Bill 50,” July 2024 https://www.fairsharehousing.org/wp-
content/uploads/2024/08/NJs-New-Affordable-Housing-Law_Fact-Sheet_Fair-
Share-Housing-Center_July-2024.pdf
COAH Third Round Substantive Rules, N.J.A.C. 5:97 (2008)
Fourth Round Municipal Fair Share Housing Obligations, 2025-2035, New Jersey
Department of Community Affairs, October 2024
Complete Guide to Planning in New Jersey, Fourth Edition, 2018, Carlos
Rodriguez, PP/FAICIP, editor, American Planning Association, New Jersey
Chapter, particularly the chapters on State Development and Redevelopment
Plan, Municipal Land Use Law, Fair Housing Act, and Local Redevelopment and
Housing Law; available at: https://njplanning.org/complete-guide-to-planning-
in-new-jersey/
Stan Slachetka and David G. Roberts, The Redevelopment Handbook, A Guide to
Rebuilding New Jersey’s Communities, Third Edition, 2024, prepared for New
Jersey Department of Community Affairs and the American Planning
Association-New Jersey Chapter; available at
https://www.amazon.com/Redevelopment-Handbook-Rebuilding-Jerseys-
Communities/dp/B0DJHCKX8Jat: https://njplanning.org/
ADDITIONAL RESOURCES
CITATIONS
[1] The Affordable Housing Professionals of New Jersey annually calculates and
publishes on its website household income limits using the methodology previously
used by COAH: https://ahpnj.org/resources/income-limits-rental-increases
[2] Analysis of US HUD Consolidated Planning/CHAS data based on 2017-2021 American
Community Survey (ACS) 5-year estimates by the US Census Bureau.
[3] US Census Bureau, 2023 American Community Survey 1-year estimates
[4] Analysis of US HUD Consolidated Planning/CHAS data based on 2017-2021 American
Community Survey (ACS) 5-year estimates by the US Census Bureau.
[5] Mount Laurel II, 92 N.J. 222-223.
[6] Douglas S. Massey, et al., Climbing Mount Laurel: The Struggle for Affordable Housing
and Social Mobility in an American Suburb, Princeton University Press, 2013.
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Apr 2, 2026
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