Legislation advancing in the State Senate would give municipalities preferential access to state grants and other funding if they adopt zoning changes that allow for denser residential development.
Trenton, NJ – New Jersey lawmakers are advancing legislation that would reward municipalities willing to increase residential housing density by giving them preferential treatment when competing for state grants and certain infrastructure funding.
Assembly Bill 3877 was referred to the Senate Budget and Appropriations Committee on Saturday and was reported out of committee with amendments the same day, moving the proposal another step closer to final legislative approval.
Grant preference tied to housing density
The bill establishes a voluntary incentive program encouraging municipalities to revise their master plans and zoning regulations to allow for additional residential development and higher housing densities.
Municipal planning boards choosing to participate would conduct a special review of their master plans, evaluate zoning rules governing residential development, and consider strategies that would increase the number of homes permitted within their communities.
If a municipality adopts qualifying zoning changes, the Department of Community Affairs would place it on a statewide list of participating municipalities. That designation would provide preferential consideration when competing for many state-administered grants and other competitively awarded financial assistance.
The Neighborhood Preservation Program is specifically identified as one of the funding programs subject to the preference, while Transitional Aid, Consolidated Municipal Property Tax Relief Aid, and Energy Tax Receipts Property Tax Relief Aid would be excluded.
Transportation and school funding incentives included
The legislation also expands the incentives beyond grant programs.
Under the bill, the Commissioner of Transportation would be authorized to give priority consideration to participating municipalities when allocating certain Transportation Trust Fund dollars for municipal projects.
School districts could also benefit. Districts located in municipalities that implement the housing strategies could receive up to a 10 percent increase in their district aid percentage when calculating the state’s share of eligible school construction projects. Regional school districts could qualify for proportional increases based on participating constituent municipalities.
Municipal participation would remain voluntary
The proposal does not require municipalities to change their zoning or approve additional housing. Instead, it creates financial incentives for towns that voluntarily amend their land-use regulations to accommodate greater residential development.
The Department of Community Affairs would be responsible for ranking participating municipalities based on the extent of their zoning changes and updating the public list quarterly. Other state agencies awarding competitive grants would then use those rankings when determining funding preferences.
Key Points
- Assembly Bill 3877 would reward municipalities that allow higher-density housing with priority for certain state grants.
- Participating towns could also receive favorable consideration for Transportation Trust Fund projects and enhanced school construction aid.
- The bill is voluntary and has advanced to the Senate after being reported from the Senate Budget and Appropriations Committee with amendments.
Related: New Jersey Legislature, Department of Community Affairs, Affordable Housing, Transportation Trust Fund, Trenton
