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A1206
ASSEMBLY, No. 1206
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman ALEXANDER "AVI" SCHNALL
District 30 (Monmouth and Ocean)
SYNOPSIS
���� Reduces term of affordability required for affordable
housing created through middle housing construction or conversion.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
reducing the term of affordability for middle
housing construction and conversion and amending P.L.1985, c.222 and P.L.2024,
c.2.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.� Section 4 of P.L.1985,
c.222 (C.52:27D-304) is amended to read as follows:
���� 4.� As used in P.L.1985, c.222
(C.52:27D-301 et al.):
���� a.��� "Council"
means the Council on Affordable Housing established in P.L.1985, c.222
(C.52:27D-301 et al.), abolished pursuant to section 3 of P.L.2024, c.2
(C.52:27D-304.1).�
���� b.��� "Housing
region" means a geographic area established pursuant to subsection b. of
section 6 of P.L.2024, c.2 (C.52:27D-304.2).
���� c.��� "Low-income
housing" means housing affordable according to federal Department of
Housing and Urban Development or other recognized standards for home ownership
and rental costs and occupied or reserved for occupancy by households with a
gross household income equal to 50 percent or less of the median gross
household income for households of the same size within the housing region in
which the housing is located.
���� d.��� "Moderate-income
housing" means housing affordable according to federal Department of
Housing and Urban Development or other recognized standards for home ownership
and rental costs and occupied or reserved for occupancy by households with a gross
household income equal to more than 50 percent but less than 80 percent of the
median gross household income for households of the same size within the
housing region in which the housing is located.
���� e.��� (Deleted by amendment,
P.L.2024, c.2)
���� f.���� "Inclusionary
development" means a residential housing development in which a
substantial percentage of the housing units are provided for a reasonable
income range of low- and moderate-income households.
���� g.��� "Conversion"
means the conversion of existing commercial, industrial, or residential
structures for low- and moderate-income housing purposes where a substantial
percentage of the housing units are provided for a reasonable income range of
low- and moderate-income households.
���� h.��� "Development"
means any development for which permission may be required pursuant to the
"Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).
���� i.���� "Agency"
means the New Jersey Housing and Mortgage Finance Agency established by
P.L.1983, c.530 (C.55:14K-1 et seq.).
���� j.���� "Prospective
need" means a projection of housing needs based on development and growth
which is reasonably likely to occur in a region or a municipality, as the case
may be, as a result of actual determination of public and private entities.� Prospective
need shall be determined by the methodology set forth pursuant to sections 6
and 7 of P.L.2024, c.2 (C.52:27D-304.2 and C.52:27D-304.3) for the fourth round
and all future rounds of housing obligations.
���� k.��� "Person with a
disability" means a person with a physical disability, infirmity,
malformation, or disfigurement which is caused by bodily injury, birth defect,
aging, or illness including epilepsy and other seizure disorders, and which
shall include, but not be limited to, any degree of paralysis, amputation, lack
of physical coordination, blindness or visual impairment, deafness or hearing
impairment, the inability to speak or a speech impairment, or physical reliance
on a service animal, wheelchair, or other remedial appliance or device.
���� l.���� "Adaptable"
means constructed in compliance with the technical design standards of the
barrier free subcode adopted by the Commissioner of Community Affairs pursuant
to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119
et seq.) and in accordance with the provisions of section 5 of P.L.2005, c.350
(C.52:27D-123.15).
���� m.�� "Very low-income
housing" means housing affordable according to federal Department of
Housing and Urban Development or other recognized standards for home ownership
and rental costs and occupied or reserved for occupancy by households with a gross
household income equal to 30 percent or less of the median gross household
income for households of the same size within the housing region in which the
housing is located.
���� n.��� "Accessory dwelling
unit" means a residential dwelling unit that provides complete independent
living facilities with a private entrance for one or more persons, consisting
of provisions for living, sleeping, eating, sanitation, and cooking, including
a stove and refrigerator, and is located within a proposed or existing primary
dwelling, within an existing or proposed structure that is accessory to a
dwelling on the same lot, constructed in whole or part as an extension to a
proposed or existing primary dwelling, or constructed as a separate detached
structure on the same lot as the existing or proposed primary dwelling.
���� o.��� "Builder's
remedy" means court-imposed, site-specific relief for a litigant who seeks
to build affordable housing for which the court requires a municipality to
utilize zoning techniques, such as mandatory set-asides or density bonuses,
including techniques which provide for the economic viability of a residential
development by including housing that is not for low- and moderate-income
households.
���� p.��� "Commissioner"
means the Commissioner of Community Affairs.
���� q.��� "Compliance
certification" means the certification obtained by a municipality pursuant
to section 3 of P.L.2024, c.2 (C.52:27D-304.1), that protects the municipality
from exclusionary zoning litigation during the current round of present and prospective
need and through July 1 of the year the next round begins, which is also known
as a "judgment of compliance" or "judgment of repose."� The
term "compliance certification" shall include a judgment of repose
granted in an action filed pursuant to section 13 of P.L.1985, c.222
(C.52:27D-313).
���� r.���� "County-level
housing judge" means a judge appointed pursuant to section 5 of P.L.2024,
c.2 (C.52:27D-313.2), to resolve disputes over the compliance of municipal fair
share affordable housing obligations and municipal fair share plans and housing
elements, with the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301
et al.).
���� s.���� "Deficient housing
unit" means housing that: (1) is over fifty years old and overcrowded; (2)
lacks complete plumbing; or (3) lacks complete kitchen facilities.
���� t.���� "Department"
means the Department of Community Affairs.
���� u.��� "Exclusionary
zoning litigation" means litigation to challenge the fair share plan,
housing element, or ordinances or resolutions implementing the fair share plan
or housing element of a municipality based on alleged noncompliance with the "Fair
Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.) or the Mount Laurel
doctrine, which litigation shall include, but shall not be limited to,
litigation seeking a builder's remedy.
���� v.��� "Fair share
plan" means the plan or proposal that is in a form which may readily be
adopted, with accompanying ordinances and resolutions, pursuant to subsection
f. of section 3 of P.L.2024, c.2 (C.52:27D-304.1), by which a municipality
proposes to satisfy its obligation to create a realistic opportunity to meet
its fair share of low- and moderate-income housing needs of its region and
which details the affirmative measures the municipality proposes to undertake
to achieve its fair share of low- and moderate-income housing, as provided in
the municipal housing element, and addresses the development regulations
necessary to implement the housing element, including, but not limited to,
inclusionary requirements and development fees, and the elimination of unnecessary
housing cost-generating features from the municipal land use ordinances and
regulations.
���� w.�� "Highlands-conforming
municipality" means a municipality that has adopted a land development
ordinance implementing the municipality's plan conformance petition and which
land development ordinance has been certified by the Highlands Water Protection
and Planning Council as consistent with the "Highlands Water Protection
and Planning Act," P.L.2004, c.120 (C.13:20-1 et seq.), the Highlands
regional master plan, and the municipality's plan conformance approval.� The
term "land development ordinance" shall be inclusive of any amendment
to the municipality's land development ordinances that is adopted to further
the municipality's petition of plan conformance.�
���� x.��� "Housing
element" means that portion of a municipality's master plan consisting of
reports, statements, proposals, maps, diagrams, and text designed to meet the
municipality's fair share of its region's present and prospective housing
needs, particularly with regard to low- and moderate-income housing, and which
shall contain the municipal present and prospective obligation for affordable
housing, determined pursuant to subsection f. of section 3 of P.L.2024, c.2
(C.52:27D-304.1).
���� y.��� "Program"
means the Affordable Housing Dispute Resolution Program, established pursuant
to section 5 of P.L.2024, c.2 (C.52:27D-313.2).
���� z.��� "State Development
and Redevelopment Plan" or "State Plan" means the plan prepared
pursuant to sections 1 through 12 of the "State Planning Act,"
P.L.1985, c.398 (C.52:18A-196 et al.), designed to represent a balance of development
and conservation objectives best suited to meet the needs of the State, and for
the purpose of coordinating planning activities and establishing Statewide
planning objectives in the areas of land use, housing, economic development,
transportation, natural resource conservation, agriculture and farmland
retention, recreation, urban and suburban redevelopment, historic preservation,
public facilities and services, and intergovernmental coordination pursuant to
subsection f. of section 5 of P.L.1985, c.398 (C.52:18A-200).
���� aa.�� "Transitional
housing" means temporary housing that:
���� includes, but is not limited
to, single-room occupancy housing or shared living and supportive living
arrangements;
���� provides access to on-site or
off-site supportive services for very low-income households who have recently
been homeless or lack table housing;
���� is licensed by the department;
and
���� allows households to remain
for a minimum of six months.
����
bb.� "Middle housing"
means a building which consists of not less than two housing units, and not
more than four housing units.� "Middle housing" shall include, but
shall not be limited to, a group of not less than two, and not more than four,
connected townhouses.
����
cc.�� "Middle housing
conversion" means the renovation, construction, or reconstruction of a
building, which consists of not more than four housing units before the
conversion, to increase the number of low- or moderate-income housing units in
the building or in the land appurtenant thereto.� A "middle housing
conversion" shall include, but shall not be limited to, the construction
of an accessory dwelling unit.
(cf: P.L.2024, c.2, s.2)
���� 2.� Section 36 of P.L.2024,
c.2 (C.52:27D-313.3) is amended to read as follows:
���� 36.� a.� (1)� Notwithstanding
the provisions of the "Administrative Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.) to the contrary, the Commissioner of Community Affairs
shall, in consultation with the Administrative Director of the Courts and the
Executive Director of the New Jersey Housing and Mortgage Finance Agency,
adopt, immediately upon filing with the Office of Administrative Law, no later
than nine months after the effective date of P.L.2024, c.2 (C.52:27D-304.1 et
al.), such transitional rules and regulations as necessary for the
implementation of P.L.2024, c.2 (C.52:27D-304.1 et al.), including for: (a) the
identification of any vestigial duties of the Council on Affordable Housing and
the transfer of those duties within the Department of Community Affairs to the
extent that those duties are not otherwise assumed, pursuant to P.L.2024, c.2
(C.52:27D-304.1 et al.), by municipalities or the Affordable Housing Dispute
Resolution Program; and (b) the establishment of policies regarding the cost of
the assessments and fees of planned real estate developments, as defined in
section 3 of P.L.1977, c.419 (C.45:22A-23), on low- and moderate-income housing
units.
���� (2)� The department, in
consultation with the agency, shall thereafter amend, adopt, or readopt the
regulations in accordance with the requirements of the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
���� b.� The Executive Director of
the New Jersey Housing and Mortgage Finance Agency, in consultation with the
department, shall adopt, pursuant to the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.), no later than nine months after
the effective date of P.L.2024, c.2 (C.52:27D-304.1 et al.), rules and
regulations to update the Uniform Housing Affordability Controls as required
pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et
al.).� As part of updating the Uniform Housing Affordability Controls, the
agency shall set rules establishing that, for the purpose of newly created low-
and moderate-income rental units, a 40-year minimum deed restriction shall be
required.� For the purpose of for-sale units, a 30-year minimum deed
restriction shall be required.� For the purpose of housing units for which
affordability controls are extended for a new term of affordability, a 30-year
minimum deed restriction shall be required, provided that the minimum extension
term may be limited to no less than 20 years as long as the original and
extended terms, in combination, total at least 60 years.� Any 100 percent
affordable rental property shall have a right to extinguish a deed restriction
regardless of original length, beginning 30 years following the start of the
deed restriction, provided a refinancing or rehabilitation, or both, for the
purpose of preservation is commenced and that a new deed restriction of at
least 30 years is provided.� A municipality shall be eligible to receive credits
for all preserved units pursuant to this subsection, as long as the original
and extended terms total at least 60 years, and this credit may be obtained at
the time of preservation.� All 100 percent affordable projects shall be
eligible for any affordable housing preservation program administered by the
State, beginning 30 years following the start of the deed restriction,
regardless of original length of the deed restriction.� Any State administered
preservation program may allow a refinancing funding process to commence prior
to the 30th year of the deed restriction when such refinancing or
rehabilitation funding is needed to preserve affordable housing.
����
c.� Notwithstanding any
provision of subsection b. of this section, or paragraph (1) of subsection f.
of section 21 of P.L.1985, c.222 (C.52:27D-321) to the contrary, a unit of low-
or moderate-income housing shall have a term of affordability of not less than
10 years if the unit is created, and initially marketed for sale or rent as
such, after the effective date of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) as a newly constructed middle housing project, or
as a part of a middle housing conversion.
(cf: P.L.2024, c.2, s.36)
���� 3.� Section 21 of P.L.1985,
c.222 (C.52:27D-321) is amended to read as follows:
���� 21.� The agency shall
establish affordable housing programs to assist municipalities in meeting the
obligation of developing communities to provide low- and moderate-income
housing.
���� a.��� Of the bond authority
allocated to it under section 24 of P.L.1983, c.530 (C.55:14K-24) the agency
will allocate, for a reasonable period of time established by its board, no
less than 25 percent to be used in conjunction with housing to be constructed or
rehabilitated with assistance under P.L.1985, c.222 (C.52:27D-301 et al.).
���� b.� The agency shall to the
extent of available funds, award assistance to affordable housing programs
located in municipalities whose housing elements have obtained compliance
certification, or which have been subject to a builder's remedy.� During any period
which the agency may approve, the agency may assist affordable housing programs
that have a pending request for compliance certification; provided the
affordable housing program will meet all or in part a municipal low- and
moderate-income housing obligation.
���� c.��� Assistance provided
pursuant to this section may take the form of grants or awards to
municipalities, prospective home purchasers, housing sponsors as defined in
P.L.1983, c.530 (C.55:14K-1 et seq.), or as contributions to the issuance of
mortgage revenue bonds or multi-family housing development bonds which have the
effect of achieving the goal of producing affordable housing.
���� d.��� Affordable housing
programs which may be financed or assisted under this provision may include,
but are not limited to:
���� (1)� Assistance for home
purchase and improvement including interest rate assistance, down payment and
closing cost assistance, and direct grants for principal reduction;
���� (2)� Rental programs including
loans or grants for developments containing low- and moderate-income housing,
moderate rehabilitation of existing rental housing, congregate care and
retirement facilities;
���� (3)� Financial assistance for
the conversion of nonresidential space to residences;
���� (4)� Other housing programs
for low- and moderate-income housing, including infrastructure projects
directly facilitating the construction of low- and moderate-income housing; and
���� (5)� Grants or loans to
municipalities, housing sponsors and community organizations to encourage
development of innovative approaches to affordable housing, including:
���� (a)�� Such advisory,
consultative, training and educational services as will assist in the planning,
construction, rehabilitation and operation of housing; and
���� (b)� Encouraging research in
and demonstration projects to develop new and better techniques and methods for
increasing the supply, types and financing of housing and housing projects in
the State.
���� e.��� The agency shall
establish procedures and guidelines governing the qualifications of applicants,
the application procedures and the criteria for awarding grants and loans for
affordable housing programs and the standards for establishing the amount, terms
and conditions of each grant or loan.
���� f.�
(1)
� The agency, in
consultation with the department, shall establish requirements and controls to
ensure the maintenance of housing assisted under P.L.1985, c.222 (C.52:27D-301
et al.) as affordable to low- and moderate-income households for a period of not
less than 40 years for newly created rental units, 30 years for for-sale units,
and 30 years for housing units for which affordability controls are extended
for a new term of affordability, provided that the minimum extension term may
be limited to no less than 20 years as long as the original and extended terms,
in combination, total at least 60 years.� Any 100 percent affordable rental
property shall have a right to extinguish a deed restriction regardless of
original length, beginning 30 years following the start of the deed
restriction, provided a refinancing or rehabilitation, or both, for the purpose
of preservation is commenced and that a new deed restriction of at least 30
years is provided.� A municipality shall be eligible to receive credits for all
preserved units pursuant to this subsection, as long as the original and
extended terms total at least 60 years, and this credit may be obtained at the
time of preservation.� All 100 percent affordable projects shall be eligible
for any affordable housing preservation program administered by the State,
beginning 30 years following the start of the deed restriction, regardless of
original length of the deed restriction.� Any State administered preservation
program may allow a refinancing funding process to commence prior to the 30th
year of the deed restriction when such refinancing or rehabilitation funding is
needed to preserve affordable housing.� The agency may update or amend any
controls previously adopted by the agency, in consultation with the Council on
Affordable Housing, prior to the effective date of P.L.2024, c.2
(C.52:27D-304.1 et al.), provided that the requirements and controls shall, at
a minimum, be consistent with the controls as in effect immediately prior to
the effective date of P.L.2024, c.2 (C.52:27D-304.1 et al.), including, but not
limited to, any requirements concerning bedroom distributions, affordability
averages, and affirmative marketing.� The controls may include, among others,
requirements for recapture of assistance provided pursuant to P.L.1985, c.222
(C.52:27D-301 et al.) or restrictions on return on equity in the event of
failure to meet the requirements of the program.� With respect to rental
housing financed by the agency pursuant to P.L.1985, c.222 (C.52:27D-301 et al.)
or otherwise which promotes the provision or maintenance of low- and
moderate-income housing, the agency may waive restrictions on return on equity
required pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.) which is gained
through the sale of the property or of any interest in the property or sale of
any interest in the housing sponsor.� The agency shall promulgate updated
regulations no later than nine months following the effective date of P.L.2024,
c.2 (C.52:27D-304.1 et al.).� All parties may continue to rely on regulations
previously adopted by the agency pursuant to the authority provided by this
section as in effect immediately prior to the effective date of P.L.2024, c.2
(C.52:27D-304.1 et al.) until new rules and regulations are adopted by the agency.�
Notwithstanding the provisions of the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the agency, after
consultation with department, may adopt, immediately, upon filing with the
Office of Administrative Law, said regulations, which shall be effective for a
period not to exceed one year from the date of the filing.� The agency shall
thereafter amend, adopt, or readopt the regulations in accordance with the
requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
����
(2)� Notwithstanding any
provision of paragraph (1) of this subsection, or subsection b. of section 36
of P.L.2024, c.2 (C.52:27D-313.3) to the contrary, a unit of low- or
moderate-income housing shall have a term of affordability of not less than 10
years if the unit is created, and initially marketed for sale or rent as such,
after the effective date of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) as a newly constructed middle housing project, or as
a part of a middle housing conversion.�
���� g.��� The agency may establish
affordable housing programs through the use or establishment of subsidiary
corporations or development corporations as provided in P.L.1983, c.530
(C.55:14K-1 et seq.).� The subsidiary corporations or development corporations
shall be eligible to receive funds provided under P.L.1985, c.222 (C.52:27D-301
et al.) for any permitted purpose.
���� h.��� The agency shall provide
assistance, through its bonding powers or in any other manner within its
powers, to the grant and loan program established pursuant to section 20 of
P.L.1985, c.222 (C.52:27D-320).
���� i.� (1)� The department shall
promulgate processes and standards for the certification of administrative
agents and municipal housing liaisons in the State, as well as standards for
measuring performance of and enforcing compliance by administrative agents and
municipal housing liaisons in implementing the affordable housing requirements
and controls established pursuant to subsection f. of this section.
���� (2)� Administrative agents
shall be responsible for implementing the requirements and controls set by the
regulations promulgated pursuant to subsection f. of this section.� The
department may bring via summary proceeding any findings of violation of the
responsibilities set forth in this section before a county-level housing judge
to docket the violation and issue corrective orders and levy fines.
���� (3)� Municipal housing
liaisons shall be responsible for monitoring administrative agents within their
municipality's jurisdiction to ensure compliance with the requirements and
controls set by regulation under subsection f. of this section.
���� (4)� Municipal housing
liaisons, the department, and interested parties may bring a challenge before a
county-level housing judge to determine whether properties subject to the
regulations set forth by this section are out of compliance with the regulations.�
A finding of deliberate noncompliance may result in the department removing the
administrative agent's certification.
���� (5)� A county-level housing
judge may issue fines and order corrective actions for violations and may
consider patterns of violations in determining whether a municipality is
meeting its obligations under the compliance certification established by section
3 of P.L.2024, c.2 (C.52:27D-304.1).
���� (6)� Notwithstanding the
provisions of the "Administrative Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.), to the contrary, the department may adopt, immediately,
upon filing with the Office of Administrative Law, regulations to implement the
provisions of this subsection, which shall be effective for a period not to
exceed one year from the date of the filing.� The department shall thereafter
amend, adopt, or readopt the regulations in accordance with the requirements of
P.L.1968, c.410 (C.52:14B-1 et seq.).
(cf: P.L.2024, c.2, s.27)
���� 4.� This act shall take effect
immediately.�
STATEMENT
���� This bill reduces the term of
affordability required for affordable housing created through the construction
or conversion of middle housing.�
���� Specifically, the bill
requires that, in order to count towards a municipality�s affordable housing
obligation, a unit of low- or moderate-income housing must have a term of
affordability of not less than 10 years if the unit is created, and initially
marketed as such, following the effective date of the bill as a newly constructed
middle housing project, or as a part of a middle housing conversion.� In order
to count towards a municipality�s affordable housing obligation under current
law, a term of affordability is generally required to run for 30 or 40 years,
depending on whether the unit is a for-sale or a rental unit.� The bill reduces
this requirement for middle housing construction and conversion in order to
encourage density, and discourage urban sprawl.�
���� The bill defines "middle
housing" as a building which consists of no less than two and no more than
four housing units.� The bill defines a "middle housing conversion"
as the renovation, construction, or reconstruction of a building, which
consists of no more than four housing units before the conversion, to increase
the number of low- or moderate-income housing units in the building or in the
land appurtenant.�
���� This bill takes effect
immediately.�