Facilitates construction and rehabilitation of affordable housing built in part through sweat equity by eventual occupant.

A1490

ASSEMBLY, No. 1490

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblywoman MITCHELLE DRULIS

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblywoman YVONNE LOPEZ

District 19 (Middlesex)

Co-Sponsored by:

Assemblywoman McCoy

SYNOPSIS

���� Facilitates construction and rehabilitation of
affordable housing built in part through sweat equity by eventual occupant.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

facilitating affordable housing production
through sweat equity, amending and supplementing P.L.1985, c.222, and amending
P.L.2005, c.350.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� (New section)� a.� The
Commissioner of Community Affairs shall establish an application process, and
shall approve appropriate applicants as sweat equity certified nonprofits.� The
commissioner shall approve an applicant�s certification application if the
applicant:

���� (1)� possesses appropriate experience
in facilitating the construction or rehabilitation, or both, of dwelling units,
in part through the provision of sweat equity;

���� (2)� maintains appropriate
controls on the affordability of dwelling units produced, in part through sweat
equity, for low- or moderate-income households, to ensure that the units remain
affordable to low- and moderate-income households for a reasonable period of
time;

���� (3)� maintains a policy of
promoting the opportunities that the organization offers in the production of
housing through sweat equity to a diverse cross-section of the public; and

���� (4)� is organized pursuant to
the �New Jersey Nonprofit Corporation Act,� N.J.S.15A:1-1 et seq., or is a
corporation organized pursuant to Title 16 of the Revised Statutes.

���� b.� If sweat equity is used in
the construction or rehabilitation of a low- or moderate-income dwelling unit,
and the construction or rehabilitation of the unit is facilitated by a
nonprofit entity that is approved as a sweat equity certified nonprofit, then:

���� (1)� the adaptability
requirements of P.L.2005, c.350

(C.52:27D-311a et al.) shall not apply;

���� (2)� the provisions of law,
rule or regulation, designed to implement P.L.1985, c.222 (C.52:27D-301 et al.)
that require an affordable unit to be affirmatively marketed to the public in
order to count toward the fair share affordable housing obligation of a
municipality, shall not apply, including but not limited to P.L.2020, c.51
(C.52:27D-321.3 et seq.); and

���� (3)� the controls on
affordability maintained by the sweat equity certified nonprofit pursuant to
paragraph (2) of subsection a. of this section may be substituted for the
equivalent requirements of the Uniform Housing Affordability Controls
promulgated by the New Jersey Housing and Mortgage Finance Agency.�

���� c.� The commissioner shall
direct the Office of Local Planning Services, or other appropriate offices or
divisions of the Department of Community Affairs, to provide expedited
assistance to sweat equity certified nonprofits and municipalities in:

���� (1)� ensuring that units, for
which sweat equity is used in the construction or rehabilitation pursuant to
subsection b. of this section, are counted towards the fair share affordable
housing obligation of the municipality;

���� (2)� facilitating the transfer
of abandoned property in the municipality, as appropriate for the purpose of
low- and moderate-income housing production, to the sweat equity certified
nonprofit through the necessary processes, as provided in statutes and regulations,
including but not limited to the process for individual abandoned property
takings pursuant to paragraph (2) of subsection c. of section 37 of the �New Jersey
Urban Redevelopment Act,� P.L.1996, c.62 (C.55:19-56); and

���� (3)� facilitating use of the
municipal affordable housing trust fund, and the �New Jersey Affordable Housing
Trust Fund,� for the production of units for which sweat equity is used in the
construction or rehabilitation, pursuant to subsection b. of this section.

���� 2.� 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 stable housing;

���� is licensed by the department;
and

���� allows households to remain
for a minimum of six months.

����
bb.� "Sweat
equity" means the provision of labor, the requisite hours of which shall
be determined by a sweat equity certified nonprofit, spent in construction or
rehabilitation of a low- or moderate-income dwelling unit by one or more
members of the low- or moderate-income household who is intended to occupy the
dwelling unit.�

����
cc.� "Sweat equity
certified nonprofit" means a corporation with experience in facilitating
the construction or rehabilitation, or both, of dwelling units, in part through
the provision of sweat equity, that is organized pursuant to the "New
Jersey Nonprofit Corporation Act," N.J.S.15A:1-1 et seq., or is a
corporation organized pursuant to Title 16 of the Revised Statutes, and that is
certified by the Commissioner of Community Affairs pursuant to subsection a. of
section 1 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill).

(cf: P.L.2024, c.2, s.2)

���� 3.� Section 20 of P.L.1985,
c.222 (C.52:27D-320) is amended to read as follows:

���� 20.� There is established in
the Department of Community Affairs a separate trust fund, to be used for the
exclusive purposes as provided in this section, and which shall be known as the
"New Jersey Affordable Housing Trust Fund."� The fund shall be a
non-lapsing, revolving trust fund, and all monies deposited or received for
purposes of the fund shall be accounted for separately, by source and amount,
and remain in the fund until appropriated for such purposes.� The fund shall be
the repository of all State funds appropriated for affordable housing purposes,
including, but not limited to, the proceeds from the receipts of the additional
fee collected pursuant to paragraph (2) of subsection a. of section 3 of
P.L.1968, c.49 (C.46:15-7), proceeds from available receipts of the Statewide
non-residential development fees collected pursuant to section 35 of P.L.2008,
c.46 (C.40:55D-8.4), monies lapsing or reverting from municipal development
trust funds, or other monies as may be dedicated, earmarked, or appropriated by
the Legislature for the purposes of the fund.� All references in any law,
order, rule, regulation, contract, loan, document, or otherwise to the
"Neighborhood Preservation Nonlapsing Revolving Fund" shall mean the
"New Jersey Affordable Housing Trust Fund."� The department shall be
permitted to utilize annually up to 7.5 percent of the monies available in the
fund for the payment of any necessary administrative costs related to the
administration of the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301
et al.), or any costs related to administration of P.L.2008, c.46
(C.52:27D-329.1 et al.).

���� a.� (1)� Except as permitted
pursuant to subsection g. of this section, and by section 41 of P.L.2009, c.90
(C.52:27D-320.1), the commissioner shall award grants or loans from this fund
for housing projects and programs in municipalities whose housing elements
obtained compliance certification pursuant to section 3 of P.L.2024, c.2
(C.52:27D-304.1) or in municipalities receiving State aid pursuant to P.L.1978,
c.14 (C.52:27D-178 et seq.).

���� (2)� Of those monies deposited
into the "New Jersey Affordable Housing Trust Fund" that are derived
from municipal development fee trust funds, or from available collections of
Statewide non-residential development fees, a priority for funding shall be
established for projects in municipalities that have received compliance
certification.

���� (3)� Programs and projects in
any municipality shall be funded only after receipt by the commissioner of
either:

���� (a)� a written statement in
support of the program or project from the municipal governing body; or

���� (b)� a written statement in
support of the program or project from the municipal clerk, if the municipality
has enacted an ordinance pursuant to section 1 of P.L.2024, c.5
(C.52:27D-304.1a).

���� b.� (1)� The commissioner
shall establish rules and regulations governing the qualifications of
applicants, the application procedures, and the criteria for awarding grants
and loans and the standards for establishing the amount, terms, and conditions
of each grant or loan.

���� (2)� The governing body of a
municipality in which a housing project or program is located, and which is
awarded a grant or loan from the fund for a housing project or program, may
provide, by ordinance , that the units of affordable housing being developed or
preserved pursuant to a housing project or program being funded, in whole or in
part, through the "New Jersey Affordable Housing Trust Fund" shall be
exempt from real property taxation if the housing sponsor enters into an
agreement with the municipality for payments to the municipality in lieu of
taxes for municipal services.� Any such agreement may require the housing
sponsor to pay to the municipality an amount up to 20 percent of the annual
gross revenue from each housing project situated on such real property for each
year of operation of the agreement following the substantial completion of the
housing project.� Any such agreement shall require the housing sponsor to pay
the municipality an amount not less than the greater of four percent of the annual
gross revenue or the amount of the taxes attributable to the land value
component of the property comprising the project site for the year preceding
the recording of the mortgage, if applicable.� In the case of a property
assessed under the "Farmland Assessment Act of 1964," P.L.1964, c.48
(C.54:4-23.1 et seq.), the minimum amount the housing sponsor shall be required
to pay to the municipality shall be four percent of the annual gross revenue.�
For the purpose of this subsection, "annual gross revenue" means the
total annual gross rental or carrying charge and other income of a housing
sponsor from a housing project.� If an agreement is entered into from the date
of recording the mortgage on the housing project to the date of substantial
completion of the housing project, the annual amount payable to the
municipality as taxes or as payments in lieu of taxes in respect of the project
site shall not be in excess of the amount of taxes on the project site for the
year preceding the recording of the mortgage.� Within 30 calendar days
following: the effective date of an ordinance adopted by a municipal governing
body approving a tax exemption under this subsection, or the execution of a
financial agreement between a housing sponsor and a municipality entered into
pursuant to this subsection, whichever is later, the municipal clerk shall
electronically transmit a certified copy of the ordinance and the agreement to
the Director of the Division of Local Government Services in such a manner as
may be specified by the director.� An exemption from taxation provided pursuant
to this subsection shall not extend beyond the date on which an eligible loan
made for the project is paid in full.

���� (3)� Notwithstanding the
provisions of any law or regulation to the contrary, the governing body of a
municipality may agree to continue a tax exemption for a State, federally, or
municipally subsidized housing project beyond the date on which an eligible
loan made for the project is fully paid, or beyond the date upon which a tax
exemption expires, for any period the project remains subject to affordability
controls pursuant to:

���� (a)� project-based federal
rental assistance, authorized pursuant to section 8 of the United States
Housing Act of 1937 (42 U.S.C. s.1437f) or other federal or State project-based
assistance;�

���� (b)� the Uniform Housing
Affordability Controls promulgated by the New Jersey Housing and Mortgage
Finance Agency; or

���� (c)� the rent and income
limits established by the federal Low Income Housing Tax Credit program
pursuant to section 42 of the Internal Revenue Code (26 U.S.C. s.42).

���� c.���� For any period which
the commissioner may approve, the commissioner may assist affordable housing
programs that are located in municipalities that have a pending request for
compliance certification, provided that the affordable housing program will
meet all or part of a municipal low- and moderate-income housing obligation.

���� d.��� Amounts deposited in the
"New Jersey Affordable Housing Trust Fund" shall be targeted to
regions based on the region's percentage of the State's low- and
moderate-income housing need as determined pursuant to the low- and
moderate-income household growth over the prior 10 years, as calculated
pursuant to section 6 of P.L.2024, c.2 (C.52:27D-304.2).� Amounts in the fund
shall be applied for the following purposes in designated neighborhoods:

���� (1)� Rehabilitation of
substandard housing units occupied or to be occupied by low- and
moderate-income households;

���� (2)� Creation of accessory
dwelling units to be occupied by low- and moderate-income households;

���� (3)� Conversion of
non-residential space to residential purposes; provided a substantial
percentage of the resulting housing units are to be occupied by low- and
moderate-income households;

���� (4)� Acquisition of real
property, demolition and removal of buildings, or construction of new housing
that will be occupied by low- and moderate-income households, or any
combination thereof;

���� (5)� Grants of assistance to
eligible municipalities for costs of necessary studies, surveys, plans, and
permits; engineering, architectural, and other technical services; costs of
land acquisition and any buildings thereon; and costs of site preparation,
demolition, and infrastructure development for projects undertaken pursuant to
an approved regional contribution agreement;

���� (6)� Assistance to a local
housing authority, nonprofit or limited dividend housing corporation, or
association or a qualified entity acting as a receiver under P.L.2003, c.295
(C.2A:42-114 et al.) for rehabilitation or restoration of housing units which
it administers which: (a) are unusable or in a serious state of disrepair; (b)
can be restored in an economically feasible and sound manner; and (c) can be
retained in a safe, decent, and sanitary manner, upon completion of
rehabilitation or restoration; and

���� (7)� Other housing programs
for low- and moderate-income housing, including, without limitation, (a)
infrastructure projects directly facilitating the construction of low- and
moderate-income housing not to exceed a reasonable percentage of the construction
costs of the low- and moderate-income housing to be provided
[
and
]

,
(b)
alteration of dwelling units occupied or to be occupied by households of low or
moderate income and the common areas of the premises in which they are located
in order to make them accessible to persons with disabilities
, and (c)
projects for which sweat equity is used in the construction or rehabilitation
of a low- or moderate-income dwelling unit, and the construction or
rehabilitation of the unit is facilitated by a nonprofit entity that is
approved as a sweat equity certified nonprofit
.

���� e.���� Any grant or loan
agreement entered into pursuant to this section shall incorporate contractual
guarantees and procedures by which the division shall ensure that any unit of
housing provided for low- and moderate-income households shall continue to be
occupied by low- and moderate-income households for a period that conforms to
the requirements of subsection f. of section 21 of P.L.1985, c.222
(C.52:27D-321) following the award of the loan or grant, except that the
division may approve a guarantee for a period of less duration where necessary
to ensure project feasibility.

���� f.���� Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, in making
grants or loans under this section, the department shall not require that
tenants be certified as low or moderate income or that contractual guarantees
or deed restrictions be in place to ensure continued low- and moderate-income
occupancy as a condition of providing housing assistance from any program
administered by the department, when that assistance is provided for a project
of moderate rehabilitation if the project: (1) contains 30 or fewer rental
units and (2) is located in a census tract in which the median household income
is 60 percent or less of the median income for the housing region in which the
census tract is located, as determined for a
[
three
person
]

three-person
household by the department in accordance with the latest
federal decennial census.� A list of eligible census tracts shall be maintained
by the department and shall be adjusted upon publication of median income
figures by census tract after each federal decennial census.

���� g.��� In addition to other
grants or loans awarded pursuant to this section, and without regard to any
limitations on such grants or loans for any other purposes herein imposed, the
commissioner shall annually allocate such amounts as may be necessary in the commissioner's
discretion, and in accordance with section 3 of P.L.2004, c.140
(C.52:27D-287.3), to fund rental assistance grants under the program created
pursuant to P.L.2004, c.140 (C.52:27D-287.1 et al.).� Such rental assistance
grants shall be deemed necessary and authorized pursuant to P.L.1985, c.222
(C.52:27D-301 et al.), in order to meet the housing needs of certain low-income
households who may not be eligible to occupy other housing produced pursuant to
P.L.1985, c.222 (C.52:27D-301 et al.).

���� h.��� The department and the
State Treasurer shall submit the "New Jersey Affordable Housing Trust
Fund" for an audit annually by the State Auditor or State Comptroller, at
the discretion of the Treasurer.� In addition, the department shall prepare an
annual report for each fiscal year, and submit it by November 30th of each year
to the Governor and the Legislature, and the Joint Committee on Housing
Affordability, or its successor, and post the information to its Internet
website, of all activity of the fund, including details of the grants and loans
by number of units, number and income ranges of recipients of grants or loans,
location of the housing renovated or constructed using monies from the fund,
the number of units upon which affordability controls were placed, and the
length of those controls.� The report also shall include details pertaining to
those monies allocated from the fund for use by the State rental assistance
program pursuant to section 3 of P.L.2004, c.140 (C.52:27D-287.3) and
subsection g. of this section.

���� i.���� The commissioner may
award or grant the amount of any appropriation deposited in the "New
Jersey Affordable Housing Trust Fund" pursuant to section 41 of P.L.2009,
c.90 (C.52:27D-320.1) to municipalities pursuant to the provisions of section
39 of P.L.2009, c.90 (C.40:55D-8.8).

(cf: P.L.2024, c.6, s.1)

���� 4.� Section 5 of P.L.2005,
c.350 (C.52:27D-123.15) is amended to read as follows:

���� 5.� a.� Any new construction
for which an application for a construction permit has not been declared
complete by the enforcing agency before the effective date of P.L.2005, c.350
(C.52:27D-311a et al.) and for which credit is sought pursuant to P.L.1985, c.
222 (C.52:27D-301 et al.) on or after the effective date of P.L.2005, c.350
(C.52:27D-311a et al.) shall be adaptable; however, elevators shall not be
required in any building or within any dwelling unit for the purposes of
P.L.2005, c.350

(C.52:27D-311a et al.).� In buildings without elevator service, only ground
floor dwelling units shall be required to be constructed to conform with the
technical design standards of the barrier free subcode in order to be credited
pursuant to P.L.1985, c.222 (C.52:27D-301 et al.).

���� b.� Notwithstanding the
exemption for townhouse dwelling units in the barrier free subcode, the first
floor of all townhouse dwelling units and of all other multifloor dwelling
units for which credit is sought pursuant to P.L.1985, c. 222 (C.52:27D-301 et
al.) on or after the effective date of P.L.2005, c.350 (C.52:27D-311a et al.)
and for which an application for a construction permit has not been declared
complete by the enforcing agency pursuant to P.L.2005, c.350 (C.52:27D-311a et
al.), shall be subject to the technical design standards of the barrier free
subcode and shall include the following features:

���� (1)� an adaptable entrance to
the dwelling unit;

���� (2)� an adaptable full service
bathroom on the first floor;

���� (3)� an adaptable kitchen on
the first floor;

���� (4)� an accessible interior
route of travel; and

���� (5)� an adaptable room with a
door or a casing where a door can be installed which may be used as a bedroom
on the first floor.

���� c.� (1)� Full compliance with
the requirements of this section shall not be required where an entity can
demonstrate that it is site impracticable to meet the requirements. Full
compliance shall be considered site impracticable only in those rare circumstances
when the unique characteristics of terrain prevent the incorporation of
accessibility features.

���� (2)� If full compliance with
this section would be site impracticable, compliance with this section for any
portion of the dwelling shall be required to the extent that it is not site
impracticable.

����
(3)� Pursuant to section 1
of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill),
compliance with the requirements of this section shall not be required where
sweat equity is used in the construction or rehabilitation of a low- or
moderate-income dwelling unit, and the construction or rehabilitation of the
unit is facilitated by a nonprofit entity that is approved as a sweat equity
certified nonprofit pursuant to subsection a. of section 1 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).�

���� d.� In the case of a unit or
units which are constructed with an adaptable entrance pursuant to subsection
c. of this section, upon the request of a disabled person who is purchasing or
will reside in the dwelling unit, an accessible entrance shall be installed.�
Additionally, the builder of the unit or units shall deposit sufficient funds
to adapt 10 percent of the affordable units in the project which have not been
constructed with accessible entrances with the municipality in which the units
are located, for deposit into the municipal affordable housing trust fund.�
These funds shall be available for the use of the municipality for the purpose
of making the adaptable entrance of any such affordable unit accessible when
requested to do so by a person with a disability who occupies or intends to
occupy the unit and requires an accessible entrance.

���� For the purposes of this
section:

���� �Adaptable,� as used with
regard to an entrance, means that the plans for the unit include a feasible
building plan to adapt the entrance so as to make the unit accessible.

���� �Disabled person� means
�disabled person� as defined in section 4 of P.L.1985, c.222 (C.52:27D-304).

���� �Ground floor� means the first
floor with a dwelling unit or portion of a dwelling unit, regardless of whether
that floor is at grade.� A building may have more than one ground floor.

���� �Site impracticable� means
having the characteristic of �site impracticability� as set forth in section
100.205 (a) of title 24, Code of Federal Regulations.

����
�Sweat equity� means the
provision of labor, the requisite hours of which shall be determined by a sweat
equity certified nonprofit, spent in construction or rehabilitation of a low-
or moderate-income dwelling unit by one or more members of the low- or moderate-income
household who is intended to occupy the dwelling unit.�

����
�Sweat equity certified
nonprofit�
means a corporation with
experience in
facilitating the construction or rehabilitation, or both,
of dwelling units, in part through the provision of sweat equity,
that is organized pursuant to the �New Jersey
Nonprofit Corporation Act,� N.J.S.15A:1-1 et seq., or is a corporation
organized pursuant to Title 16 of the Revised Statutes, and that is certified
by the Commissioner of Community Affairs pursuant to subsection a. of section 1
of
P.L. , c. (C. )
(pending before the Legislature as this bill)
.

(cf: P.L.2005, c.350, s.5)

���� 5.� On or before the first day
of the fourth month next following enactment of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill), the Commissioner of Community
Affairs shall adopt, pursuant to the �Administrative Procedure Act,� P.L.1968,
c.410 (C.52:14B-1 et seq.), rules and regulations to necessary for the
implementation of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill).�

���� 6.� This act shall take effect
on the first day of the fourth month next following enactment, except that the
Commissioner of Community Affairs shall take such anticipatory action as is
necessary in order to effectuate the provisions of P.L. , c. (C. ) (pending
before the Legislature as this bill).

STATEMENT

����� This bill facilitates the construction and
rehabilitation of affordable housing that is built in part through sweat equity
by the eventual occupant.� �Sweat equity� refers to the provision of labor
spent in construction or rehabilitation of a low- or moderate-income dwelling
unit by one or more members of the low- or moderate-income household intended
to occupy the unit.

����� The bill directs the Commissioner of Community
Affairs (commissioner) to establish an application process, and approve
appropriate applicants as sweat equity certified nonprofits.�

����� The bill directs the commissioner to approve a
certification application if the applicant:

�

possesses appropriate experience in facilitating the construction
or rehabilitation of dwelling units, in part through sweat equity;

�

maintains appropriate controls on the affordability of dwelling
units produced, in part through sweat equity, for low- or moderate-income
households, to ensure that the units remain affordable for a reasonable period
of time;

�

maintains a policy of promoting the opportunities that the
organization offers in the production of housing through sweat equity to a
diverse cross-section of the public; and

�

is organized under the �New Jersey Nonprofit Corporation Act,�
N.J.S.15A:1-1 et seq., or as a religious organization under Title 16 of the
Revised Statutes.

����� If sweat equity is used in producing an affordable
dwelling unit, and the unit�s production is facilitated by a sweat equity
certified nonprofit, then the bill directs that the adaptability requirements,
which ordinarily apply to affordable housing construction, would not apply.�
The adaptability requirements concern compliance with the technical design
standards of the barrier free subcode of the State Uniform Construction Code.�
Additionally, for sweat equity produced units facilitated by a sweat equity certified
nonprofit, the bill:

�

provides the units with an exemption from the ordinary
affirmative marketing requirements of the �Fair Housing Act,� P.L.1985, c.222
(C.52:27D-301 et al.); and

�

allows the controls on affordability maintained by the sweat
equity certified nonprofit to be substituted for the equivalent requirements of
the Uniform Housing Affordability Controls.�

����� The bill requires the commissioner to direct the
appropriate offices or divisions of the Department of Community Affairs, to
provide expedited assistance to sweat equity certified nonprofits and
municipalities in:

�

ensuring that units, for which sweat equity is used in
construction or rehabilitation, are counted towards the fair share affordable
housing obligation of the municipality;

�

facilitating the transfer of abandoned property in the
municipality, as appropriate for the production of affordable housing, to the
sweat equity certified nonprofit through necessary processes, including but not
limited to the process for individual abandoned property takings pursuant to
section 37 of the �New Jersey Urban Redevelopment Act,� P.L.1996, c.62
(C.55:19-56); and

�

facilitating use of the municipal affordable housing trust fund,
and the �New Jersey Affordable Housing Trust Fund,� for the production of units
for which sweat equity is used in the construction or rehabilitation.

���� The bill directs the commissioner, by the first day of
the fourth month next following enactment, to adopt the rules and regulations
necessary for the implementation of the bill.� The bill takes effect on the
first day of the fourth month next following enactment.