Bill Text: NJ A4990 | 2026-2027 | Regular Session | Introduced
Bill Title: 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.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced) 2026-05-07 - Introduced, Referred to Assembly Housing Committee [A4990 Detail]
Download: New_Jersey-2026-A4990-Introduced.html
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.
