The gap between the need for affordable housing and the limited supply continues to grow across the tri-state region. Connecticut, New Jersey, and New York are facing a severe deficit of approximately 89,000, 224,000, and 656,000 units of housing, respectively. This is contributing to skyrocketing housing costs and further entrenching historic patterns of inequality and segregation.
Each state has had varying degrees of success in creating policies that guarantee and encourage affordable housing. A recent analysis by RPA found that the largest percent increase of new housing growth during the post-recession period (2010-2022) came from northern New Jersey (Union, Hudson, Bergen, Essex, and Passaic) and from New York City (Bronx and Kings). In proportion to population size, the New Jersey Metro Core also issued the greatest number of permits, with an increase of 25% during the post-recession period.
One of the reasons New Jersey has been more successful than other areas of the region on this front is its fair share housing framework, known as the Mount Laurel doctrine, described in detail below. Despite the comparative success of the program, the need for affordable housing grows by the day.
To address this shortage, the New Jersey state legislature is currently advancing S50/A4, sponsored by Troy Singleton and Nicholas Scutari in the Senate and Yvonne Lopez and Craig Coughlin in the Assembly. This legislation seeks to codify Judge Mary C. Jacobson’s 2018 opinion on affordable housing, creating a system that streamlines the process of determining fair share obligations and offers incentives for redevelopment and transit-oriented development.
RPA is analyzing the proposed legislation and its potential impact. But how did we get to this point? For those who are less familiar with the history of affordable housing in New Jersey, our team has prepared a quick overview:
New Jersey has a long history of legally guaranteeing the production of affordable housing.
1975: In Southern Burlington County NAACP v. Township of Mount Laurel, known as Mount Laurel I, the New Jersey Supreme court held that all New Jersey municipalities are responsible for their “fair share” of affordable housing.
1983: In a decision known as Mount Laurel II, the New Jersey Supreme Court strongly reaffirmed its decision in Mount Laurel I and set up a system of enforcement, including Builder’s Remedy. A Builder’s Remedy lawsuit allows a developer to sue a municipality if it does not permit more housing construction.
1985: The New Jersey Legislature passed the Fair Housing Act, which codified the affordable housing obligations of municipalities and created a state agency called the Council on Affordable Housing (COAH). COAH was empowered to (1) define housing regulations, (2) estimate housing needs, (3) set criteria and guidelines for municipalities to create housing, and (4) review and approve housing elements of master plans, fair share plans, and regional contribution agreements (RCAs) for municipalities.
1987: The first round of affordable housing obligations began and lasted until 1993.
1993: The second round of affordable housing obligations began and cumulatively covered the years 1987 to 1999.
1999: The second round of affordable housing obligations ended and COAH failed to establish new affordable housing obligations for the third round. It became a defunct organization.
2008: New Jersey legislature passed a bill outlawing RCAs and strengthening the state’s Fair Housing Act. RCAs allowed municipalities to pay other towns to take up to half of their affordable housing requirements. This practice was seen as a way to reinforce residential segregation.
2015: In a decision known as Mount Laurel IV, the New Jersey Supreme Court held that COAH had failed and transitioned enforcement of affordable housing obligations back to the NJ trial court system. The Court also appointed Fair Share Housing Center to represent the interests of the public.
2018: Mercer County Superior Court Judge Jacobson set a precedent for how affordable housing obligations would be calculated for each municipality in a court case involving Princeton and West Windsor, NJ.
2024: After an unsuccessful push during the lame duck period, the Senate Community and Urban Affairs Committee advanced S50/A4.
2025: The fourth round of affordable housing obligations will begin and last until 2035.
In New Jersey, the amount of affordable housing units each municipality should provide is determined in rounds. This allows each municipality to adjust for an ever-changing demand for affordable housing. These calculations have been based on different methodologies throughout the years. During the first two rounds of affordable housing obligations, calculations were based on the “fair share” method.
During the third round of affordable housing obligations, COAH introduced calculations based on the “growth share” method. During these three rounds, a total of 1,469 deed-restricted affordable units per year were created. COAH faced significant pushback with this methodology as housing advocates claimed the affordable housing produced was insufficient to address the need. This criticism, coupled with political pressure and allegations of inaction from COAH, ultimately led to the New Jersey Supreme Court decision, Mount Laurel IV, that COAH had failed. COAH was effectively stripped of its power and jurisdiction over affordable housing production was given back to the courts.
According to Mount Laurel IV, municipalities have two options for fulfilling their affordable housing obligation: (1) seek protection from the courts and make a settlement agreement with Fair Share Housing Center, or (2) wait for a lawsuit.
When a municipality decides to make a settlement agreement, the amount of affordable housing is usually based on calculations by the Fair Share Housing Center. A housing special master is appointed by the court to mediate the process between the center and the municipality, ensuring that everything is fair and that the municipality complies. A judge approves the agreement. In the case of a lawsuit, a judge can grant permission to construct a development if the municipality does not have a plan to provide its fair share of housing. However, municipalities that disagree with the findings can drag out the process, and a longstanding shortage in housing special masters and judges also delays decision-making.
In 2018, in a response to a lawsuit with Princeton and West Windsor, Judge Mary C. Jacobson reaffirmed that the municipalities had a legal obligation to provide affordable housing under the Mount Laurel doctrine and set the technical calculations to be used. It is this legal opinion that S50/A4 seeks to codify.
Despite headwinds, since Mount Laurel IV, the state has seen an annualized rate of 2,736 deed-restricted affordable units. This framework has helped facilitate New Jersey’s housing production, especially compared with the rest of the tri-state region. For example, Connecticut has a different type of framework, Chapter 126a, § 8-30g, which requires municipalities to have 10% of their housing be affordable. In 2017, an amendment to the law required municipalities to prepare an affordable housing plan at least once every five years. Unfortunately, progress on affordable housing being built in the state has been slow. While the 8-30g program has not delivered the same amount of housing production as in New Jersey – reflected by the overall number of housing permits issued – it has been an important tool in helping expand the stock of affordable housing in Connecticut.
New York State does not have a comparable system to New Jersey and Connecticut. Occasionally, a municipality is sued based on violations of the Federal Fair Housing Act, such as in MHANY Management, Inc. v. County of Nassau. Federal grant money is also dependent on a county’s and municipality’s ability to meet the Federal Fair Housing Act standards. Still, it is not enough to meet New York’s affordable housing demand, and locally-controlled restrictive zoning remains unchecked in the Empire State. A recent analysis revealed that the last round of Mount Laurel in New Jersey is associated with adding 69,000 multifamily units between 2015 and 2022 across 349 municipalities (i.e. 12.4 units per 1,000 residents). In comparison, multifamily housing production during the same period in Long Island was only 4,800 units or 1.6 units per 1,000 residents, which represents a mere 13% of what municipalities participating under Mount Laurel in New Jersey produced.
S50/A4, introduced in January 2024, modifies the methodology to calculate affordable housing obligations, aims to streamline the process, and offers incentives for certain types of development. It is timely legislation. S50 provides an opportunity to evaluate the effectiveness of the courts in determining affordable housing actions, especially in light of the judge and special housing masters shortage. And in 2025, the fourth round of affordable housing obligations will begin in New Jersey. Each municipality will be required to provide a new set of affordable housing actions for the upcoming decade, closing in on the state’s 220,000+ units of affordable housing needed.
RPA will be analyzing the potential impact of S50/A4. We spoke in support of the bill after the Senate Community and Urban Affairs Committee meeting in January, and as the legislation advances, we plan to work with bill sponsors Senators Troy Singleton and Nicholas Scutari and Assembly members Yvonne Lopez and Craig Coughlin. Our goal is to ensure the Garden State continues to lead the region in housing production and that affordable housing obligations are determined in a transparent manner that encourages development where infrastructure, like transit, already exists.
