TRENTON, N.J. — A bill advancing in the New Jersey Legislature aims to incentivize municipalities to amend their master plans and zoning ordinances to allow for higher-density residential development through a range of flexible housing strategies. In return, participating towns could receive preferential access to state aid programs.
Under the proposed legislation, a municipal governing body may direct its planning board to conduct a special reexamination of the town’s master plan and development regulations. The board would then assess ways to expand the potential for residential development, particularly at greater densities, and consider adopting specific housing strategies.
Suggested strategies include permitting accessory dwelling units, allowing two- and three-family homes in single-family zones, reducing or eliminating minimum lot size and off-street parking requirements, and enabling mixed-use or multi-unit housing in areas previously restricted to commercial development. Municipalities would also be encouraged to allow manufactured housing, smaller dwelling units, and higher-density housing near transit hubs.
State aid preferences and broader support mechanisms
The bill directs the Department of Community Affairs (DCA) to give priority in awarding competitively distributed financial aid—such as through the Main Street New Jersey and Neighborhood Preservation programs—to municipalities that implement the housing strategies and increase their allowable housing units. This preference would not apply to fair share housing obligation programs.
Additionally, the DCA would be required to coordinate with other state agencies to create similar aid preferences across their programs. The department must also adopt rules that define what level of increased housing and what strategies qualify municipalities for these preferences, and provide model ordinances to help local governments adopt the measures.
The bill further allows the Commissioner of Transportation to give priority consideration to municipalities adopting the bill’s provisions when allocating Transportation Trust Fund dollars for municipal projects.
School construction aid and implementation guidance
Municipalities implementing the housing measures could also trigger an increase—up to 10 percent—in their school district’s aid percentage for state-supported school facilities projects. In regional school districts, the aid increase would be proportionally tied to the student population of the participating town.
The bill calls for the Commissioners of Education and Community Affairs to jointly develop a uniform methodology for calculating these school aid adjustments.
