Mapping New Jersey’s Growth Part II

Contemporary land-use and zoning regulations are deeply rooted in the exclusionary zoning practices and racially segregated housing patterns that emerged in the early 20th century. Despite the invalidation of racial zoning ordinances in 1917 (Buchanan v. Warley), alternate forms of land use controls emerged as a means for racial discrimination to keep Black Americans migrating to the North, Midwest, and West from integrating into predominantly white neighborhoods.

The institutionalization of redlining maintained homogenous, single-family white suburbanization and effectively excluded low-income and minority households and higher-density residential developments. Restrictive single-family zoning, only allowing for low-density residential patterns and large minimum lot sizes, continues to perpetuate barriers of entry for low-income families and communities of color to access affordable housing opportunities in transit and job-rich neighborhoods.

Today, about 75% of all residential land in major U.S. cities and a striking 85% in the tri-state metropolitan area is strictly zoned for single-family housing. Much of this land is tied to white, affluent neighborhoods with greater access to amenities and resources. These exclusionary residential patterns significantly contribute to our nation’s deepening housing affordability crisis and disproportionately harm families and communities that have long been historically underserved and barred from accessing housing opportunities.

Exclusionary Zoning in New Jersey

New Jersey cities and towns were not immune to exclusionary zoning and its impartial role in racial segregation and economic and health disparities. The state’s patchwork of municipal zoning powers has long produced fragmented development patterns and inequitable housing opportunities. During the 1960s, White Americans left Camden and Philadelphia in search of suburbia. The White Flight that occurred led to rapid population growth and high housing demand in Mount Laurel Township. The once historically rural community of Black residents was displaced as they were priced out of their own neighborhoods and left with no affordable housing options. To combat the rapid change and threats of displacement, local community members mobilized to challenge the exclusionary tactics used to force the Black community from Mount Laurel. They sought zoning approval for 36 affordable homes but were ultimately denied by the local zoning board.

In response, community members organized to challenge the township’s exclusionary zoning practices by filing a class action lawsuit against the township. Their legal challenge culminated in the Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel (1975) decision, which resulted in the New Jersey Supreme Court declaring that all New Jersey municipalities would be responsible for providing their ​“fair share” of affordable housing.

Obligations and Enforcement

The Mount Laurel Doctrine marked a turning point in state-level efforts to confront exclusionary zoning and remains one of the nation’s most influential legal frameworks for promoting fair housing.

Since the Third Round, the system has used a structured method to calculate regional affordable housing needs on a 10-year basis, referred to as a ​“round.” These regional estimates are then broken down to determine individual obligations for each municipality. Municipalities are required to develop a housing plan that outlines how they will meet their fair share of housing needs. This plan must be submitted for approval.

In March 2024, new legislation (P.L.2024, c.2) was enacted to formalize this process, assigning the Department of Community Affairs (DCA) the responsibility for regional housing requirements and for establishing each municipality’s obligations for the Fourth Round, which will cover the years 2025 to 2035. Under the law that codified this process, stakeholders may also enter the Affordable Housing Dispute Program to come to a resolution. As part of the Fourth Round, a total of 452 municipalities are participating, marking a 25% increase from the previous Third Round (2015-2025).

Implementing these housing requirements has largely depended on a legal mechanism known as the ​“builder’s remedy”. The process allows for the expedited construction of low- or middle-income housing when a municipality does not fulfill its obligations under the Mount Laurel decision.

When a builder proposes a development that includes affordable housing, and the municipality denies the proposal for violating local zoning codes, the developer may challenge this denial by asserting that the municipality has not adhered to the Mount Laurel doctrine. If a court determines that the municipality has not complied, it may permit the developer to proceed with the project despite violations of the local zoning code and may invalidate the offending zoning provision for excluding affordable housing. In essence, this type of lawsuit could result in court-ordered rezonings to allow a specific housing project to proceed. In turn, this process has also incentivized municipalities to not block or refuse development of affordable units, and instead become proactive in creating state-compliant housing plans.

Most municipalities seek continued immunity from litigation by developing and submitting a housing plan that complies with the state constitution. Typically, a much smaller fraction of municipalities do not submit plans, risking a ​“builder’s remedy” lawsuit.

For analyzing housing production based on the Third Round framework (2015 - 2025 period), RPA grouped municipalities into three main types: Participating, Non-Compliant, and Qualified Urban Aid:

• Participating and Urban Aid Municipalities: These are the 349 municipalities that were assigned prospective and existing need obligations in the Third Round and submitted housing plans demonstrating constitutional compliance. This group comprises 340 municipalities that are mostly suburban in character and 9 Urban Aid municipalities that were also assigned prospective need obligations. In both cases, submitting constitutionally compliant plans allowed them to retain local zoning authority and avoid ​“Builder’s Remedy” lawsuits.

• Non-Compliant Municipalities: These are towns that were assigned both prospective and existing need obligations but failed to submit a plan for constitutional compliance. These represented 29% of towns (166 during the Third Round period) but only 10% of the state’s population. Jurisdictions in this categorization remained vulnerable to court-ordered zoning changes.

• Qualified Urban Aid Municipalities: These are major urban centers that are not assigned prospective need but have substantial obligations to preserve and rehabilitate existing affordable homes. During the Third Round period, they represented 9% of the state’s municipalities, but given their larger population, they accounted for 29% of the state’s residents.

Sociodemographic conditions

This section describes socioeconomic characteristics across the municipal categories during the Third Round of fair-share obligations. Participating municipalities, were typically more affluent and had a majority of white residents, in contrast to Qualified Urban Aid localities, which had household incomes below the state’s median and a larger share of Black, Indigenous, and People of Color (BIPOC) residents.

In terms of median household income measured at the beginning of the Third Round, 75% of the Participating municipalities had incomes above the state level ($72,100), whereas only 8.2% of Qualified Urban Aid municipalities fell into the higher-income bracket. Non-Compliant municipalities were more evenly distributed, with 46.4% above and 53.6% below the state median income.

Jurisdictions with a majority BIPOC population were heavily concentrated in the Qualified Urban Aid category, making up 75.5% of those municipalities. In contrast, only 8.8% of Participating towns and 12.0% of Non-Compliant towns have a majority BIPOC population.

The court-enforced Third Round (2015–2025) marked a pivotal shift in New Jersey’s residential development, as enforcement moved from the administrative Council on Affordable Housing (COAH) to the judicial system. Following the 2015 resumption of court-enforced obligations, permitted multifamily units in New Jersey effectively doubled, rising from 81,500 (2007–2014) to 174,450 units (2015–2022). A major driver of this growth was the updated calculations for measuring housing obligations in the Third Round, combined with the ​“builder’s remedy” mechanism. This combination largely incentivized towns to remove restrictive zoning codes on their own rather than potentially face court orders to change them.

The distribution of multifamily permits among municipality types remained constant during the pre- and post-enforcement periods: approximately 50% of production came from participating locations, 43% from qualified urban aid municipalities, and the remaining 7% from non-compliant municipalities. This constant rate reflects that the builder’s remedy operates in two ways: it incentivizes towns to voluntarily comply with state law and remove restrictive zoning, and it also provides a tool to override situations in which towns do not comply.

Growth by Municipality Category

Growth was evenly spread across the participating towns, with only 29% of post-enforcement production occurring in the top 10 municipalities. In contrast, housing production was heavily concentrated in non-compliant towns, where the top 10 municipalities accounted for 76% of all production in that category.

• Participating and Urban Aid: Growth was broadly distributed among participating towns. Only 29% of post-enforcement production was concentrated in the top 10 municipalities. Ranked in order, the top producing municipalities in this category include: Harrison Town (Hudson), Union Township (Union), Mount Laurel Township (Burlington), Secaucus Town (Hudson), Rockaway Township (Morris), Cherry Hill township (Camden), Piscataway township (Middlesex), Fort Lee borough (Bergen), Morristown town (Morris), Maplewood township (Essex)

• Non-Compliant: Housing production was highly concentrated in these areas. The top 10 non-compliant towns—led by Bound Brook, Somerville, and Linden—account for 76% of all production in this category.

• Qualified Urban Aid: These major urban centers saw more concentrated growth, with 50% of production occurring in the top five cities: Jersey City, Newark, Bayonne, City of Orange, and West New York.

This section analyzes evidence indicating that New Jersey’s fair share system provides a structural advantage for housing growth compared to neighboring regions that lack such mandates. The Third Round period coincided with the recovery from the 2008 economic recession. To isolate the effects of broader market forces from those of New Jersey’s fair share system, we conducted control comparisons. Specifically, we compared the number of multifamily units permitted in areas without a fair share system in Long Island, NY, with those in New Jersey. These comparisons also emphasize affordability benefits: although housing costs in New Jersey have increased over time, costs in regions without a fair share system have risen more rapidly and significantly.

Jurisdictions without a Fair Share system compared to New Jersey

This comparison highlights a significant disparity in housing production levels, showing that regions with a fair-share system consistently outperform those without such a framework, sometimes by nearly a factor of 10 between pre- and post-Mt. Laurel enforcement periods (2007-2014 vs. 2015-2022).

In both periods, multifamily housing production in Long Island—where no enforceable fair-share system exists—remained exceptionally low, increasing only from 1.4 units per 1,000 residents in the first period to 1.7 units in the second. In contrast, even the lowest-performing category in New Jersey—Non-Compliant Municipalities—experienced a significant increase in production, rising from 6.9 units per 1,000 residents to 13.5 units per 1,000 residents during the same timeframe. Participating Municipalities and Urban Aid Municipalities in New Jersey saw even more impressive gains, reaching 16.0 and 25.3 units per 1,000 residents, respectively, in the post-2015 period.

Comparative Municipal Pairings

To further validate these findings, we paired specific New Jersey municipalities with comparable localities in Long Island that share similar population sizes and distances to Manhattan’s Central Business District (CBD). This comparison provides evidence that a fair-share obligation is likely a primary driver of housing growth. The pairings analyzed include:

• Small Inner Suburbs: Morristown, NJ vs. Mineola, NY. Despite their similar profiles, the fair share system in New Jersey has facilitated significantly higher multifamily production in Morristown than in its Long Island counterpart: 69 units per 1,000 residents compared to 27 units per 1,000 residents.

• Medium Suburbs: West Windsor, NJ vs. Lindenhurst, NY. In this mid-sized suburban category, the New Jersey municipality outpaced the New York locality by a factor of 19: 32 units per 1,000 residents compared to 1.7 units per 1,000 residents.

• Large Outer Suburbs: Hamilton, NJ vs. Southampton, NY. Even at greater distances from the urban core, the structural requirement to provide affordable housing in New Jersey led to five times the production as in comparable outer-ring suburbs on Long Island.

Housing Costs and Overcrowding Effects

Housing costs in New Jersey have increased over time; however, areas without a fair-share system have experienced even faster and more significant increases. An analysis of median rents, home values, and overcrowded housing units reveals worsening conditions in regions lacking this system.

Since 1990, the median gross rent in Long Island has risen from $1,691 to $2,153, a 27% increase. In comparison, northern New Jersey counties have seen increases of only 23% in inner counties and 10% in outer counties. Similarly, median house values in Long Island have surged by 47% since 1990, while northern New Jersey counties experienced increases of 21% and 16% in inner and outer areas, respectively.

Consequently, the percentage of overcrowded households in Long Island has grown by 15% over the past 30 years. In contrast, northern New Jersey counties have seen overall stabilization and a 46% reduction in overcrowded households.

These figures indicate that comparable regions and localities with a fair share system—ranging from dense urban centers to outer suburbs—consistently and significantly outperform those without such systems. The mandatory nature of the Mount Laurel obligations provides a predictable framework for growth absent in neighboring jurisdictions, such as the New York suburbs.

Calculating Affordable Housing Obligations

Under New Jersey’s Fair Share system, a methodological process is used to determine fair-share housing allocations at the regional and municipal levels. The methodology has a complex history and has undergone multiple iterations over its lifetime. By the Third Round (2015-2025), the calculation would be composed of the following variables, also serving as a basis for codifying the allocations applicable to the Fourth Round (2025-2035):

• Rehabilitation Need

• Prior Round Obligation

• Third Round Obligation (present and regional prospective needs)

With Assembly Bill 4/Senate Bill 50 signed into legislation in March 2024, the methodology for defining allocations for the Fourth Round was largely codified. Under the provisions, a statewide framework was established to streamline the calculation of affordable housing requirements for each municipality, providing greater transparency into the complex process of determining each component of a municipality’s present and prospective need and obligation for the Fourth Round. Not only did this standardize the process, but it also reduced extensive judicial involvement, delays in affordable housing development, and associated legal costs. Along with the codification of the methodology, the Department of Community Affairs is now responsible for calculating municipal present and prospective needs moving forward in the Fourth Round.

Under the Fourth Round, the process of calculating a municipality’s present and prospective needs includes the following components:

• Present Need and Deficient Low- and Moderate-Income Occupied Housing

• Qualified Urban Aid Municipality Calculation

• Regional Prospective Need Calculation

• Equalized Nonresidential Valuation Factor (proxy for commercial activity and jobs)

• Income Capacity Factor

• Land Capacity Factor (partly based on planning areas defined through the SDRP)

• Final Prospective Need Calculation

However, not all municipalities undergo the same methodology to determine their fair share obligations. Urban Aid municipalities, in particular, follow a modified process, and most are exempt from allocations that factor ​“regional prospective needs”. espite not having these obligations, many of these urban centers still saw rapid growth. During 2000-2020, higher-density Metropolitan Areas (PA1.1) grew by 71,300 units, representing almost 16% of the statewide increase in that period, or three times the growth in the previous decades (1980s and 1990s).

Housing Obligations and State Planning Areas

Infrastructure Investment and Housing Growth

While the Third Round (2015–2025) successfully reignited multifamily production through judicial enforcement and ​“smart growth” alignment, the scale of the Fourth Round—with 452 participating municipalities—necessitates a deeper investigation into the infrastructure systems required to sustain this growth. Key themes for future analysis include evaluating how the recent surge in multifamily permits aligns with both the 2001 and the updated December 2025 Infrastructure Needs Assessments, and fostering better inter-agency coordination. Additional analysis should also evaluate the role that designated ​“Centers/Nodes” could have in budget decisions and state resource allocation. Furthermore, future research should refine comparative municipal analysis through more rigorous statistical variables and conduct a deeper investigation into the critical intersection between housing production and socioeconomic equity.

The following themes should be considered for further analysis:

• Alignment with Infrastructure Needs Assessments (2001 vs. 2025): Future research should evaluate how the observed doubling of multifamily permits after 2015 aligns with the infrastructure priorities identified in the 2001 Infrastructure Needs Assessment and the recently updated December 2025 Assessment.

• Inter-Agency Coordination for the Fourth Round: Given the 25% increase in municipal participation for the Fourth Round, there is a critical need to study how state agencies like the NJ DOT and DEP can better coordinate with the DCA. Analysis should focus on the processes for creating a unified framework where infrastructure planning and housing enforcement work in tandem, preventing the ​“decoupling” of these systems that occurred during the 15-year enforcement gap (2000–2015).

• Alignment with SDRP Centers and Budgetary Prioritization: Future study should evaluate how state infrastructure grants and subsidies can be explicitly prioritized for designated ​“Centers/Nodes”. By focusing resources on these areas, the state can effectively lower development costs for high-density affordable housing, ensuring that new units are not just built, but are situated in locations with the amenities and services necessary to support them.

• Transit-Oriented Development (TOD) and PA1 Growth: The new law (A4/S50) gives towns bonus credits for TOD redevelopment. Housing units created within a one-half-mile radius of an NJ Transit, PATCO, or PATH rail, bus, or ferry station may receive a 0.5 bonus credit, effectively making a qualifying TOD unit count as 1.5 units. Additional analysis should be conducted to determine the specific correlations between housing production and proximity to these transit hubs. This should be used to assess the effects of the weight assigned by the Fourth Round codification, as well as those of separate policy mechanisms incentivizing TOD.

• Refinement of Comparative Municipal Analysis: Future research should conduct more comparisons of municipalities to better isolate the impact of the Mount Laurel doctrine. While the comparative municipal pairing exercise in Section 4 (Regional Comparisons) provides compelling evidence of the effectiveness of the fair share system, these pairs are not fully comparable in how their specific obligations are calculated. A more comprehensive analysis should control for the exact variables used to estimate municipal obligations—specifically population change, non-residential valuations, income, and developable land capacity—to provide a more precise evaluation of housing production relative to New Jersey’s state-mandated targets.

• Expansion of Equity and Socioeconomic Research: Future research should explore the link between housing production and socioeconomic equity. Although Section 2 (Municipal Categories) outlines socioeconomic variables for Participating, Non-Compliant, and Qualified Urban Aid municipalities, it does not link housing production rates to these variables. A longitudinal study is needed to assess how meeting fair-share obligations affects racial composition, median income, housing cost burdens, and long-term affordability. This would clarify the doctrine’s and state plan effects in fostering integrated communities and addressing economic disparities.

To ensure the surge in municipal participation translates into tangible affordability during the Fourth Round (2025–2035), the recommendations focus on three strategic pillars: operational support, budgetary alignment, and data transparency:

• Sustain and Support the Surge in Participation: With 452 towns already filing for the Fourth Round, the state must provide robust technical assistance to help ​“participating” municipalities move from zoning resolutions to getting housing projects off the ground and promptly obtaining certificates of occupancy.

• Leverage Center Designations for Budgetary Alignment: To further the goals of the SDRP, designated ​“Centers/Nodes” should be used to inform state budget allocations and inter-agency coordination more effectively. By prioritizing subsidies, tax credits, and infrastructure grants for affordable housing within these centers, the state can lower development costs and ensure that high-density, low-income housing is situated in areas accessible to transit, public amenities, and jobs. Designated Centers/Nodes should also be integrated into the land capacity factor to ensure housing obligations are focused in areas with infrastructure and amenities intended to support development.

• Modernize Data Governance for Targeted Impact: There is a critical need for centralized technology systems, standardized processes, and documentation to improve transparency for all stakeholders. The state needs to enhance data collection, which, in addition to housing unit permits issued, should document completion dates, distinguish income tiers being served (e.g., Very Low vs. Moderate), and capture other attributes describing the relationships between housing production and State Plan Planning Areas and Fair Share Housing obligations. This granularity is essential for better determining the extent to which policies address the state’s housing deficit.