Reauthorizes use of regional contribution agreements.

A1581

ASSEMBLY, No. 1581

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman SEAN T. KEAN

District 30 (Monmouth and Ocean)

Co-Sponsored by:

Assemblymen Auth, Simonsen, Assemblywoman Fantasia,
Assemblymen Barlas and Inganamort

SYNOPSIS

���� Reauthorizes use of regional contribution agreements.

CURRENT VERSION OF TEXT

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

��

An Act
concerning regional contribution agreements and
amending P.L.1985, c.222.

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

���� 1.��� Section 2 of P.L.1985,
c.222 (C.52:27D-302) is amended to read as follows:

���� 2.��� The Legislature finds
that:

���� a.���� The New Jersey Supreme
Court, through its rulings in South Burlington County NAACP v. Mount Laurel, 67
N.J. 151 (1975) and South Burlington County NAACP v. Mount Laurel, 92 N.J. 158
(1983), has determined that every municipality in a growth area has a constitutional
obligation to provide through its land use regulations a realistic opportunity
for a fair share of its region's present and prospective needs for housing for
low and moderate income families.

���� b.��� In the second Mount
Laurel ruling, the Supreme Court stated that the determination of the methods
for satisfying this constitutional obligation "is better left to the
Legislature," that the court has "always preferred legislative to
judicial action in their field," and that the judicial role in upholding
the Mount Laurel doctrine "could decrease as a result of legislative and
executive action."

���� c.���� The interest of all
citizens, including low and moderate income families in need of affordable
housing, and the needs of the workforce, would be best served by a
comprehensive planning and implementation response to this constitutional
obligation.

���� d.��� There are a number of
essential ingredients to a comprehensive planning and implementation response,
including the establishment of reasonable fair share housing guidelines and
standards, the initial determination of fair share by officials at the municipal
level and the preparation of a municipal housing element, State review of the
local fair share study and housing element, and continuous State funding for
low and moderate income housing to replace the federal housing subsidy programs
which have been almost completely eliminated.

���� e.���� The State can maximize
the number of low and moderate income units provided in New Jersey by allowing
its municipalities to adopt appropriate phasing schedules for meeting their
fair share, so long as the municipalities permit a timely achievement of an appropriate
fair share of the regional need for low and moderate income housing as required
by the Mt. Laurel I and II opinions and other relevant court decisions.

���� f.���� The State can also
maximize the number of low and moderate income units by creating new affordable
housing and by rehabilitating existing, but substandard, housing in the State.�
Because the Legislature has determined, pursuant to P.L.2008, c.46 (C.52:27D-329.1
et al.), that it is no longer appropriate or in harmony with the Mount Laurel
doctrine to permit the transfer of the fair share obligations among
municipalities within a housing region, it is necessary and appropriate to
create a new program to create new affordable housing and to foster the
rehabilitation of existing, but substandard, housing.

���� g.��� Since the urban areas
are vitally important to the State, construction, conversion and rehabilitation
of housing in our urban centers should be encouraged.� However, the provision
of housing in urban areas must be balanced with the need to provide housing
throughout the State for the free mobility of citizens.�

���� h.��� The Supreme Court of New
Jersey in its Mount Laurel decisions demands that municipal land use
regulations affirmatively afford a reasonable opportunity for a variety and
choice of housing including low and moderate cost housing, to meet the needs of
people desiring to live there.� While provision for the actual construction of
that housing by municipalities is not required, they are encouraged but not
mandated to expend their own resources to help provide low and moderate income
housing.

���� i.���� Certain amendments to
the enabling act of the Council on Affordable Housing are necessary to provide
guidance to the council to ensure consistency with the legislative intent,
while at the same time clarifying the limitations of the council in its rulemaking.�
Although the court has remarked in several decisions that the Legislature has
granted the council considerable deference in its rulemaking, the Legislature
retains its power and obligation to clarify and amend the enabling act from
which the council derives its rulemaking power, from time to time, in order to
better guide the council.

���� j.����
[
The
Legislature finds that the use of regional contribution agreements, which
permits municipalities to transfer a certain portion of their fair share
housing obligation outside of the municipal borders, should no longer be
utilized as a mechanism for the creation of affordable housing by the council.
]

(Deleted
by amendment, P.L.��� , c.� ��) (pending before the Legislature as this bill)
�

(cf: P.L.2008, c.46, s.4)

���� 2.��� Section 11 of P.L.1985,
c.222 (C.52:27D-311) is amended to read as follows:

���� 11.� a.� In adopting its
housing element, the municipality may provide for its fair share of low and
moderate income housing by means of any technique or combination of techniques
which provide a realistic opportunity for the provision of the fair share.� The
housing element shall contain an analysis demonstrating that it will provide
such a realistic opportunity, and the municipality shall establish that its
land use and other relevant ordinances have been revised to incorporate the
provisions for low and moderate income housing.� In preparing the housing
element, the municipality shall consider the following techniques for providing
low and moderate income housing within the municipality, as well as such other
techniques as may be published by the council or proposed by the municipality:

���� (1)�� Rezoning for densities
necessary to assure the economic viability of any inclusionary developments,
either through mandatory set-asides or density bonuses, as may be necessary to
meet all or part of the municipality's fair share in accordance with the regulations
of the council and the provisions of subsection h. of this section;

���� (2)�� Determination of the
total residential zoning necessary to assure that the municipality's fair share
is achieved;

���� (3)�� Determination of
measures that the municipality will take to assure that low and moderate income
units remain affordable to low and moderate income households for an
appropriate period of not less than six years;

���� (4)�� A plan for
infrastructure expansion and rehabilitation if necessary to assure the
achievement of the municipality's fair share of low and moderate income
housing;

���� (5)�� Donation or use of
municipally owned land or land condemned by the municipality for purposes of
providing low and moderate income housing;

���� (6)�� Tax abatements for
purposes of providing low and moderate income housing;

���� (7)�� Utilization of funds
obtained from any State or federal subsidy toward the construction of low and
moderate income housing;

���� (8)�� Utilization of
municipally generated funds toward the construction of low and moderate income
housing; and

���� (9)�� The purchase of
privately owned real property used for residential purposes at the value of all
liens secured by the property, excluding any tax liens, notwithstanding that
the total amount of debt secured by liens exceeds the appraised value of the
property, pursuant to regulations promulgated by the Commissioner of Community
Affairs pursuant to subsection b. of section 41 of P.L.2000, c.126
(C.52:27D-311.2).

���� b.��� The municipality may
provide for a phasing schedule for the achievement of its fair share of low and
moderate income housing.

���� c.���� (Deleted by amendment,
P.L.2008, c.46)

���� d.��� Nothing in P.L.1985,
c.222 (C.52:27D-301 et al.) shall require a municipality to raise or expend
municipal revenues in order to provide low and moderate income housing.

���� e.���� When a municipality's
housing element includes the provision of rental housing units in a community
residence for the developmentally disabled, as defined in section 2 of
P.L.1977, c.448 (C.30:11B-2), which will be affordable to persons of low and
moderate income, and for which adequate measures to retain such affordability
pursuant to paragraph (3) of subsection a. of this section are included in the
housing element, those housing units shall be fully credited as permitted under
the rules of the council towards the fulfillment of the municipality's fair
share of low and moderate income housing.

���� f.���� It having been
determined by the Legislature that the provision of housing under P.L.1985,
c.222 (C.52:27D-301 et al.) is a public purpose, a municipality or
municipalities may utilize public monies to make donations, grants or loans of
public funds for the rehabilitation of deficient housing units and the
provision of new or substantially rehabilitated housing for low and moderate
income persons, providing that any private advantage is incidental.

���� g.��� A municipality which has
received substantive certification from the council, and which has actually
effected the construction of the affordable housing units it is obligated to
provide, may amend its affordable housing element or zoning ordinances without
the approval of the council.

���� h.��� Whenever affordable
housing units are proposed to be provided through an inclusionary development,
a municipality shall provide, through its zoning powers, incentives to the
developer, which shall include increased densities and reduced costs, in
accordance with the regulations of the council and this subsection.

���� i.���� The council, upon the
application of a municipality and a developer, may approve reduced affordable
housing set-asides or increased densities to ensure the economic feasibility of
an inclusionary development.

���� j.���� A municipality may
enter into an agreement with a developer or residential development owner to
provide a preference for affordable housing to low to moderate income veterans
who served in time of war or other emergency, as defined in section 1 of P.L.1963,
c.171 (C.54:4-8.10), of up to 50 percent of the affordable units in that
particular project.� This preference shall be established in the applicant
selection process for available affordable units so that applicants who are
veterans who served in time of war or other emergency, as referenced in this
subsection, and who apply within 90 days of the initial marketing period shall
receive preference for the rental of the agreed-upon percentage of affordable
units.� After the first 90 days of the initial 120-day marketing period, if any
of those units subject to the preference remain available, then applicants from
the general public shall be considered for occupancy.� Following the initial
120-day marketing period, previously qualified applicants and future qualified
applicants who are veterans who served in time of war or other emergency, as
referenced in this subsection, shall be placed on a special waiting list as
well as the general waiting list.� The veterans on the special waiting list
shall be given preference for affordable units, as the units become available,
whenever the percentage of preference-occupied units falls below the agreed
upon percentage.� Any agreement to provide affordable housing preferences for
veterans pursuant to this subsection shall not affect a municipality's ability
to receive credit for the unit from the council, or its successor.

����
k.��� The municipality may
propose that a portion of its fair share be met through a regional contribution
agreement.� The housing element shall demonstrate, however, the manner in which
that portion will be provided within the municipality if the regional contribution
agreement is not entered into.� The municipality shall provide a statement of
its reasons for the proposal.

(cf: P.L.2013, c.6, s.1)

���� 3.��� Section 12 of P.L.1985,
c.222 (C.52:27D-312) is amended to read as follows:

���� 12.� a.�
[
Except as
prohibited under P.L.2008, c.46 (C.52:27D-329.1 et al.), a
]

A

municipality may propose the transfer of up to 50% of its fair share to another
municipality within its housing region by means of a contractual agreement into
which
the
two municipalities voluntarily enter.� A municipality may also
propose a transfer by contracting with the agency or another governmental
entity designated by the council if the council determines that the
municipality has exhausted all possibilities within its housing region.� A
municipality proposing to transfer to another municipality, whether directly or
by means of a contract with the agency or another governmental entity
designated by the council, shall provide the council with the housing element
and statement required under
[
subsection
c.
]

subsection
k.
of section 11 of P.L.1985, c.222 (C.52:27D-311), and shall request the
council to determine a match with a municipality filing a statement of intent
pursuant to subsection e. of this section.� Except as provided in subsection b.
of this section, the agreement may be entered into upon obtaining substantive
certification under section 14 of P.L.1985, c.222 (C.52:27D-314), or anytime
thereafter.� The regional contribution agreement entered into shall specify how
the housing shall be provided by the second municipality, hereinafter the
receiving municipality, and the amount of contributions to be made by the first
municipality, hereinafter the sending municipality.

���� b.��� A municipality which is
a defendant in an exclusionary zoning suit and which has not obtained
substantive certification pursuant to P.L.1985, c.222 may request the court to
be permitted to fulfill a portion of its fair share by entering into a regional
contribution agreement.� If the court believes the request to be reasonable,
the court shall request the council to review the proposed agreement and to
determine a match with a receiving municipality or municipalities pursuant to
this section.� The court may establish time limitations for the council's
review, and shall retain jurisdiction over the matter during the period of
council review.� If the court determines that the agreement provides a
realistic opportunity for the provision of low and moderate income housing
within the housing region, it shall provide the sending municipality a credit
against its fair share for housing to be provided through the agreement in the
manner provided in this section.� The agreement shall be entered into prior to
the entry of a final judgment in the litigation.� In cases in which a final
judgment was entered prior to the date P.L.1985, c.222 takes effect and in
which an appeal is pending, a municipality may request consideration of a
regional contribution agreement; provided that it is entered into within 120
days after P.L.1985, c.222 takes effect.� In a case in which a final judgment
has been entered, the court shall consider whether or not the agreement
constitutes an expeditious means of providing part of the fair share.�
[
Notwithstanding
this subsection, no consideration shall be given to any regional contribution
agreement of which the council did not complete its review and formally approve
a recommendation to the court prior to the effective date of P.L.2008, c.46
(C.52:27D-329.1 et al.).
]

���� c.����
[
Except as
prohibited under P.L.2008, c.46 (C.52:27D-329.1 et al.), regional
]

A regional

contribution
[
agreements
]

agreement
shall
be approved by the council, after review by the county planning board or agency
of the county in which the receiving municipality is located.� The council
shall determine whether or not the agreement provides a realistic opportunity
for the provision of low and moderate income housing within convenient access
to employment opportunities.� The council shall refer the agreement to the
county planning board or agency which shall review whether or not the transfer
agreement is in accordance with sound, comprehensive regional planning.� In its
review, the county planning board or agency shall consider the master plan and
zoning ordinance of the sending and receiving municipalities, its own county
master plan, and the State development and redevelopment plan.� In the event
that there is no county planning board or agency in the county in which the
receiving municipality is located, the council shall also determine whether or
not the agreement is in accordance with sound, comprehensive regional
planning.� After it has been determined that the agreement provides a realistic
opportunity for low and moderate income housing within convenient access to
employment opportunities, and that the agreement is consistent with sound,
comprehensive regional planning, the council shall approve the regional
contribution agreement by resolution.� All determinations of a county planning
board or agency shall be in writing and shall be made within such time limits
as the council may prescribe, beyond which the council shall make those
determinations and no fee shall be paid to the county planning board or agency
pursuant to this subsection.

���� d.��� In approving a regional
contribution agreement, the council shall set forth in its resolution a
schedule of the contributions to be appropriated annually by the sending
municipality.� A copy of the adopted resolution shall be filed promptly with
the Director of the Division of Local Government Services in the Department of
Community Affairs, and the director shall thereafter not approve an annual
budget of a sending municipality if it does not include appropriations
necessary to meet the terms of the resolution. Amounts appropriated by a
sending municipality for a regional contribution agreement pursuant to this
section are exempt from the limitations or increases in final appropriations
imposed under P.L.1976, c.68 (C.40A:4-45.1 et seq.).

���� e.���� The council shall
maintain current lists of municipalities which have stated an intent to enter
into regional contribution agreements as receiving municipalities, and shall
establish procedures for filing statements of intent with the council.� No
receiving municipality shall be required to accept a greater number of low and
moderate income units through an agreement than it has expressed a willingness
to accept in its statement, but the number stated shall not be less than a
reasonable minimum number of units, not to exceed 100, as established by the
council.� The council shall require a project plan from a receiving
municipality prior to the entering into of the agreement, and shall submit the
project plan to the agency for its review as to the feasibility of the plan
prior to the council's approval of the agreement.� The agency may recommend and
the council may approve as part of the project plan a provision that the time
limitations for contractual guarantees or resale controls for low and moderate
income units included in the project shall be less than 30 years, if it is
determined that modification is necessary to assure the economic viability of
the project.

���� f.���� The council shall
establish guidelines for the duration and amount of contributions in regional
contribution agreements.� In doing so, the council shall give substantial
consideration to the average of: (1) the median amount required to rehabilitate
a low and moderate income unit up to code enforcement standards; (2) the
average internal subsidization required for a developer to provide a low income
housing unit in an inclusionary development; (3) the average internal
subsidization required for a developer to provide a moderate income housing
unit in an inclusionary development. Contributions may be prorated in municipal
appropriations occurring over a period not to exceed ten years and may include
an amount agreed upon to compensate or partially compensate the receiving
municipality for infrastructure or other costs generated to the receiving
municipality by the development.� Appropriations shall be made and paid
directly to the receiving municipality or municipalities or to the agency or
other governmental entity designated by the council, as the case may be.

���� g.��� The council shall
require receiving municipalities to file annual reports with the agency setting
forth the progress in implementing a project funded under a regional
contribution agreement, and the agency shall provide the council with its
evaluation of each report.� The council shall take such actions as may be
necessary to enforce a regional contribution agreement with respect to the
timely implementation of the project by the receiving municipality.�

����
[
No consideration shall be given
to any regional contribution agreement for which the council did not complete
its review and grant approval prior to the effective date of P.L.2008,
c.46 (C.52:27D-329.1 et al.).� On or after the effective date of P.L.2008,
c.46 (C.52:27D-329.1 et al.), no regional contribution agreement shall be
entered into by a municipality, or approved by the council or the court.
]

(cf: P.L.2008, c.46, s.16)

���� 4.��� This act shall take
effect immediately.�

STATEMENT

���� This bill amends the Fair
Housing Act to re-authorize the use of regional contribution agreements by
municipalities to meet affordable housing needs.� Since July 17, 2008, the
effective date of P.L.2008, c.46, municipalities have been prohibited from using
regional contribution agreements to address fair share housing obligations.�
This bill would re-authorize a municipality to propose transferring up to 50%
of its fair share housing obligation to another municipality within its housing
region through a regional contribution agreement.� This matches the portion of
a fair share housing obligation that had been transferrable prior to 2008.