Adjusts method of determining regional need for affordable housing; permits timeline extension for municipalities to determine and plan for adjusted fair share obligations based on revisions to regional need.

A4990

ASSEMBLY, No. 4990

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 7, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

SYNOPSIS

���� Adjusts method of determining regional need for
affordable housing; permits timeline extension for municipalities to determine
and plan for adjusted fair share obligations based on revisions to regional
need.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

adjusting method for determining regional need
for affordable housing, supplementing P.L.1985, c.222 (C.52:27D-301 et al.),
amending P.L.2024, c.2, and repealing section 2 of P.L.1985, c.222
(C.52:27D-302).�

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

���� 1.� (New section)� The
Legislature finds that:

���� a.� The constitutional
requirements of the Mount Laurel doctrine are not static, but have changed as
the doctrine has evolved. In 1975, in Southern Burlington County NAACP v. Mount
Laurel, 67 N.J. 151 (1975) (Mount Laurel I), the Supreme Court imposed the
affordable housing obligation only upon "developing municipalities."�
In 1983, in Southern Burlington County NAACP v. Mount Laurel, 92 N.J. 158
(Mount Laurel II), the Supreme Court found good faith efforts to be
insufficient, and instead required the determination of the satisfaction of an
affordable housing obligation on an objective basis.�

���� b.� By requiring a
determination on an objective basis, most notably with respect to the fair
share obligation determination, the court in Mount Laurel II expressed an
aspiration to achieve modest changes in how municipalities planned and zoned,
and to "reassure all concerned that Mount Laurel is not designed to sweep
away all land use restrictions or leave our open spaces and natural resources
prey to speculators. . . . But there will be some change, as there must be if
the constitutional rights of our lower income citizens are ever to be
protected.� That change will be much less painful for us than the status quo
has been for them."

���� c.� Mount Laurel II, however,
resulted in standards that amounted to far more than "some change."�
The standards the Supreme Court established in Mount Laurel II precipitated a
flood of builder�s remedy lawsuits that severely eroded the home rule power of
municipalities, led to the assignment of extremely high fair share obligations,
and proved to be very costly to municipalities.� The burdens unleashed by Mount
Laurel II proved to be so great as to create a powerful movement for a
constitutional amendment to remove the courts altogether from imposing fair
share obligations on municipalities.

���� d.� The pressures created by
the implementation of Mount Laurel II culminated in the enactment of the
"Fair Housing Act," (FHA) P.L.1985, c.222 (C.52:27D-301 et al.), in
1985, through which the Legislature sought to: suppress the builder�s remedy to
the maximum extent possible; establish "reasonable fair share housing
guidelines"; and reduce the costs to municipalities of litigating Mount
Laurel issues and complying with the Mount Laurel doctrine.

���� e.� In calling for the
creation of "reasonable" fair share standards, the Chairman on the ad
hoc Committee on Fair Housing recognized, during a September 17, 1984 hearing
on the subject, "that the sum of the parts need not equal the whole."�
In other words, in enacting the FHA in 1985 and earning the praise of the
Supreme Court in so doing, the Legislature asserted that the New Jersey
Constitution does not require the obligations of each municipality to add up to
the entire regional need.

���� f.� The FHA created the New
Jersey Council on Affordable Housing (council), gave the council primary
jurisdiction; and charged the council with the responsibility of adopting
regulations to implement the policies the Legislature established.

���� g.� In Hills Dev. Co. v. Twp.
Of Bernards, 103 N.J. 1 (1986) (Mount Laurel III), the Supreme Court
enthusiastically declared the FHA constitutional and noted that "deference
to these legislative and executive initiatives can be regarded as a clear signal
of . . . readiness to defer further to more substantial actions."

���� h.� The council adopted
regulations to implement the FHA in 1986 for the period commonly referred to as
the "first round," and again adopted regulations in 1994 for the
"second round."� The regulations for both rounds largely survived
challenge.� However, when the council adopted regulations for the third round,
the Appellate Division invalidated the regulations primarily because the
regulations required the fair share to be determined through a "growth
share" approach.� The Court concluded that the FHA, as written at the
time, did not authorize a growth share approach.� The Supreme Court agreed,
affirming the Appellate Division�s decision in In re Adoption of N.J.A.C.5:96,
215 N.J. 578 (2013).� The council then proposed regulations for the third round
again, consistent with the Supreme Court�s requirement that the growth share
approach, but ultimately failed to adopt those regulations.

���� i.� Because the FHA permitted
the council to only certify housing elements and fair share plans of
municipalities that have complied with the council�s rules, which were under
continuous and vigorous attack, the council�s ability to process petitions by municipalities
for approval of their affordable housing plans was severely impaired.

���� j.� The council�s failure to
adopt regulations satisfactory to the Supreme Court culminated in In re
N.J.A.C.5:96 & 5:97, 221 N.J. 1 (2015), commonly referred to as "Mount
Laurel IV," wherein the court transferred the tasks from the council back
to the courts for: (1) the establishment of standards consistent with the FHA;
and (2) the processing of applications for the approval of housing elements and
fair share plans.

���� k.� Although the Supreme Court
brought the task of implementing the Mount Laurel doctrine back to the courts
in Mount Laurel IV, the court concluded its opinion by asserting that it
preferred an administrative solution to a litigated one for implementing the
doctrine.�

���� l.� The imposition of a
constitutional obligation on municipalities to create a realistic opportunity
to satisfy their fair share obligations presumed that the obligations imposed
were grounded in reality.� The Legislature, in both the initial 1985 enactment
of the FHA and with the 2024 revisions, required the "prospective
need" calculation, as provided in subsection j. of section 4 of P.L.1985,
c.222 (C.52:27D-304), to be based on the "development and growth which is
reasonably likely to occur," not on an obligation untethered from reality.

���� m.� The interests of the
public at large, and of low- and moderate-income households in particular, are
not advanced by the imposition of unrealistic fair share obligations, or by
forcing municipalities to suffer the loss of their home rule powers if they
fail to comply with unrealistic obligations.� Rather, the obligations must be
rooted in reality to be achievable and to constitute sound public policy.

���� n.� Establishing standards
rooted in reality merely requires fidelity to the principle embodied in the
FHA, which has remained through the revisions of the law, that the prospective
need should be based on development and growth that is reasonably likely to
occur.� The development and growth which is reasonably likely to occur is best
measured by the number of certified residential housing units created, as
determined by the data assembled by the department, after excluding new
residential units that replace demolished residential units.

���� o.� In the March 8, 2018
decision of the Superior Court, Law Division, Mercer County, In re Application
of Municipality of Princeton, by which the 2024 FHA amendments were informed,
the court admitted into evidence an expert report that provided an objective
basis for estimating the number of affordable units that could be reasonably
created through development and growth that is reasonably likely to occur.� It
is therefore possible to determine the number of affordable units that are
realistic based upon the development and growth reasonably likely to occur.

���� p.� In Mount Laurel II, the
Supreme Court suggested that developers who previously wanted to build
inclusionary projects found it "governmentally impossible."� In stark
contrast, there is a glut of inclusionary zoning provided in the 354 municipalities
that complied in the third round.� Considering that the realities of today are
extremely different than the realities of 1983, over 40 years ago, when the
Supreme Court decided Mount Laurel II, the time has come for the doctrine to
continue to evolve so that it is based on these present realities, and not
those of 1983.

���� q.� In Mount Laurel II, the
Supreme Court stated that, "[t]he lessons of history are clear, even if
rarely learned."� Now is the time to learn from over four decades of
implementation of the Mount Laurel doctrine.� The Legislature can and should
revise the doctrine�s implementation to benefit from what has been learned in
the past to make it more effective and to prevent the doctrine from becoming so
onerous that it crumbles under its own weight.

���� r.� Towards that end, a
standard that better measures "development and growth which is reasonably
likely to occur" not only more faithfully implements the long-standing
definition of the "prospective need," but also creates more reasonable
and achievable targets for municipalities, thereby advancing a goal of all
three branches of government: voluntary municipal compliance.

���� 2.� Section 6 of P.L.2024, c.2
(C.52:27D-304.2) is amended to read as follows:

���� 6.� a.� Municipal present need
for each 10-year round of affordable housing obligations shall be determined by
estimating the deficient housing units occupied by low- and moderate-income
households in the region, following a methodology similar to the methodology
used to determine third round municipal present need, through the use of most
recent datasets made available through the federal decennial census and the
American Community Survey, including the Comprehensive Housing Affordability
Strategy dataset thereof.

���� b.� For the purpose of
determining regional need for the 10-year round of low- and moderate-income
housing obligations, running from July 1, 2025 through June 30, 2035, and each
10-year round thereafter:

���� (1)� The regions of the State
shall be comprised as follows:

���� (a)� Region 1 shall consist of
the counties of Bergen, Hudson, Passaic, and Sussex;

���� (b)� Region 2 shall consist of
the counties of Essex, Morris, Union, and Warren;

���� (c)� Region 3 shall consist of
the counties of Hunterdon, Middlesex, and Somerset;

���� (d)� Region 4 shall consist of
the counties of Mercer, Monmouth, and Ocean;

���� (e)� Region 5 shall consist of
the counties of Burlington, Camden, and Gloucester; and

���� (f)� Region 6 shall consist of
the counties of Atlantic, Cape May, Cumberland, and Salem.

���� (2)� Regional prospective need
for a 10-year round of low- and moderate-income housing obligations shall be
determined through the calculation provided in this subsection.�
[
Projected
household change for a 10-year round in a region shall be estimated by
establishing the household change experienced in the region between the most
recent federal decennial census, and the second-most recent federal decennial
census.� This household change, if positive, shall be divided by 2.5 to
estimate the number of low- and moderate-income homes needed to address low-
and moderate-income household change in the region and to determine the
regional prospective need for a 10-year round of low- and moderate-income
housing obligations.� If household change is zero or negative, the number of
low- and moderate-income homes needed to address low- and moderate-income
household change in the region and the regional prospective need shall be zero.
]

The
department shall determine the prospective need for a region�s 10-year round of
low- and moderate-income housing obligations, based on the development and
growth, which is reasonably likely to occur in the region, as provided in this
subsection.� The department shall ascertain the number of residential housing
units, as determined by the department, created in the region, excluding new
residential housing units that replace demolished residential housing units,
between the most recent federal decennial census and the second-most recent
federal decennial census, and divide that number by five, the quotient of which
division shall constitute the number of low- and moderate-income housing units
that can realistically be provided through inclusionary zoning in the region
for the 10-year round, representing the regional need.

����
(3)� All municipal
resolutions committing to a fair share obligation by January 31, 2025, pursuant
to subparagraph (b) of paragraph (1) of subsection f. of section 3 of P.L.2024,
c.2 (C.52:27D-304.1), shall be adjusted to the fair share obligation established
by the department, pursuant to the standards set forth in this subsection and
to P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill),
for determining the prospective regional need.� Additionally, a municipality
shall have 90 days from receipt of revised fair share obligation estimates from
the department to file amended housing element and fair share plans addressing
the adjusted obligation number.

(cf: P.L.2024, c.2, s.6)

���� 3.� (New section)�
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, as soon as possible following the effective date of
P.L. , c. (C. )
(pending before the Legislature as this bill), revise:

���� a.� the determinations of
regional need pursuant to paragraph (2) of subsection b. of section 6 of
P.L.2024, c.2 (C.52:27D-304.2);

���� b.� estimates of a
municipality's prospective fair share obligation of the regional prospective
need for the upcoming 10-year round, pursuant to subsection c. of section 7 of
P.L.2024, c.2 (C.52:27D-304.3); and

���� c.� the deadlines for
municipal compliance
established in P.L.2024,
c.2 (C.52:27D-304.1 et al.) as necessary, considering the date of the
publication of regional need pursuant to
P.L. , c. (C. ) (pending
before the Legislature as this bill).�

���� 4.� Section 2 of P.L.1985,
c.222 (C.52:27D-302) is repealed.

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

STATEMENT

���� This bill adjusts the method,
as established in P.L.2024, c.2 (C.
52:27D-304.1
et al.), for determining the regional need for affordable housing, and permits
timeline extensions for municipalities to determine and plan for adjusted fair
share obligations based on the revisions to the regional need.

���� The

"
prospective need
"
methodology that has been established for the
fourth round and all future rounds of affordable housing obligations, through
the enactment of P.L.2024, c.2 (C.52:27D-304.1 et al.), does not appear to
result in realistic regional and municipal affordable housing obligations, but
in excessive and unrealistic obligations.� This bill changes the methodology
for determining regional need to base the calculation on objective housing
market data that can be clearly understood and easily quantified.�

���� The
bill directs the Department of Community Affairs (department) to determine the
prospective need for a region�s 10-year round of low- and moderate-income
housing obligations by ascertaining the number of certified residential housing
units, as determined by the data assembled by the department, for new
residential units in the region, excluding new residential units that replace
demolished residential units, between the most recent federal decennial census
and the second-most recent federal decennial census.� The bill directs the
department to divide that number by five, the quotient of which is to
constitute the number of low- and moderate-income homes that can realistically
be provided through inclusionary zoning in the region for the 10-year round.�
This figure is to represent the regional need for each of the six regions of
the State.

���� In
addition to recalculating regional need, the bill directs the Commissioner of
Community Affairs to revise the estimates of a municipality's prospective fair
share obligation of the regional prospective need for the upcoming 10-year
round, based on the changes to the regional need determinations.�

���� The
bill directs that all municipalities that have already committed to a fair
share obligation at the time of the enactment of the bill are to have their
obligations adjusted to the fair share obligation established by the
department, in accordance with the standards set forth in the bill, for
determining the prospective regional need.� A municipality is to be provided
with 90 days from the receipt of revised fair share obligation estimates from
the department, to file amended housing element and fair share plans addressing
the adjusted obligation number.�

���� The
bill authorizes the department to comply with the requirements of the bill as
soon as possible, notwithstanding the provisions of the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).�

���� The
bill permits the department to revise
the deadlines for municipal
compliance
with the fourth round requirements,
as necessary, considering the bill�s adjustments to the date of the publication
of regional need.�

���� The
bill also repeals and replaces the findings section of the
"Fair
Housing Act," (FHA) P.L.1985, c.222 (C.52:27D-301 et al.).� The bill takes
effect immediately.