After years of litigation and court orders directing the New Jersey Council on Affordable Housing (COAH) to adopt new rules, on April 30, COAH released its latest iteration of Third Round affordable housing regulations. The proposed regulations comprise both Procedural Rules (N.J.A.C. 5:98-1 et seq.) and Substantive Rules (N.J.A.C. 5:99-1 et seq.) that will determine the number of affordable units each New Jersey municipality is required to provide for low-income residents. Consistent with the prior rules, municipalities that submit to COAH's jurisdiction and comply with the proposed regulations will continue to be protected from builder's remedy lawsuits.
Deviating from the prior growth share methodology invalidated by the New Jersey Supreme Court, the proposed regulations set a municipality's (i) Rehabilitation Obligation, (ii) Unanswered Prior Round Obligation and (iii) Prospective Need Obligation. They also provide for certain caps on municipal affordable housing obligations.
The proposed regulations allow towns to establish a 10 percent set-aside for inclusionary zoning that constitutes part of a municipality's Fair Share Plan (FSP). However, in certain instances, COAH may approve "reduced affordable housing set-asides or increased densities to ensure the economic feasibility of an inclusionary development." In addition, each site or zoning district assigned for inclusionary development in an FSP must include an "Economic Feasibility Study" demonstrating that the opportunity for development is realistic.
The proposed regulations, which are currently available on the New Jersey Department of Community Affairs website, will be published in the June 2 New Jersey Register. There will be a 60-day public comment period ending on August 1. Unless the proposed regulations are withdrawn or substantially altered by COAH during the public comment period, they are expected to become effective upon publication of the final rule in the November 17 New Jersey Register.
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