NJ lawmakers give housing-compliant towns first shot at state grants
Trenton, NJ – New Jersey’s Democrat lawmakers are making their point clear to municipalities across the state: build high density affordable housing, or pay the consequences.
Municipalities that keep up with their affordable housing obligations will now move to the front of the line for certain state funding after the Assembly Housing Committee advanced a new law aimed at tying compliance to economic incentives.
Approved as P.L.2025, c.142, the measure requires the Department of Community Affairs (DCA) and the New Jersey Economic Development Authority (EDA) to give priority consideration to towns that meet their housing obligations when awarding competitive grants or financial aid. The law applies to programs such as the Main Street New Jersey Program and the Neighborhood Preservation Program, as well as other state-administered funding streams.
The bill, Assembly No. 2390, makes clear that the rule does not apply to financial assistance intended to help municipalities meet their affordable housing requirements in the first place.
Under the law, DCA will evaluate compliance using several criteria during the first five years of any new affordable housing cycle. Factors include prior builder’s remedy lawsuits, previous fair share settlements, the percentage of housing obligations already fulfilled, and any other considerations the department finds relevant.
The legislation was pre-filed at the start of the 2024-2025 session, underwent technical review, and advanced with the necessary adjustments. Lawmakers said the goal is to ensure towns that make good-faith efforts to meet affordable housing targets are rewarded with better access to state-backed revitalization and economic development dollars.
Key Points
- New law gives priority for state economic grants to towns that comply with affordable housing rules.
- Department of Community Affairs and EDA will apply compliance tests before awarding funds.
- Law excludes grants intended to help towns meet their housing obligations directly.
Jersey towns that play by the housing rules now stand to win the biggest prizes in state funding competitions.