TRENTON – The Senate on Monday passed a bill sponsored by Senator Raj Mukherji and Senator Benjie Wimberly to encourage municipalities to update their zoning rules to allow for more housing. Under the bill, S-4364, municipalities that make these changes would receive preferential status in the distribution of financial assistance competitively awarded by the State.

“For lower rents, we need more housing density and supply,” said Senator Mukherji (D-Hudson), who served for 15 years as Chairman of the Jersey City Housing Authority. “Outdated zoning regulations have paralyzed far too many municipalities in the way they use available space in the densest state in our union. This legislation incentivizes municipalities across New Jersey to repurpose spaces for much-needed housing, allow ADUs, and add mixed-use, transit-friendly housing units.”

To qualify under the bill, a municipality could direct its planning board to conduct a special reexamination of its master plan and zoning rules governing where residential development is permitted.

As part of the reexamination, a planning board could consider recommending specific changes to the master plan and development regulations for the purpose of enhancing residential development at greater densities, including but not limited to:

·     Permitting development of a two- or three-unit dwelling on lots in areas restricted to the development of single-unit dwellings

·     Permitting development of a multi-unit dwelling or a mixed-use development on lots zoned exclusively for office, retail, or commercial uses

·     Permitting development of a multi-unit dwelling on at least 10 percent of the developable land within the municipality

·     Eliminating or reducing minimum size requirements for dwelling units

After undertaking a special reexamination, a planning board would forward recommendations to the governing body of a municipality. The governing body would then decide to accept, reject, or modify the recommendations of the planning board. Finally, the planning board and governing body would carry out any accepted or modified changes to the municipality’s master plan, development regulations, and zoning ordinance as necessary.

“For too long, housing development has been limited by tight land-use regulations that are no longer productive or useful,” said Senator Wimberly (D-Bergen/Passaic). “By encouraging municipalities to amend these regulations, we are aiming to spur new, mixed-use development projects that incorporate countless new residences, actively tackling the housing affordability, urban density, and environmental concerns New Jersey faces.”

The bill would direct the DCA to establish a preference in the award of competitive financial assistance for the municipalities that have amended their master plans and development regulations to allow for the use of additional housing strategies that work to increase the number of housing units permitted for development.

The preference would apply to nearly all competitively-awarded financial assistance programs administered by the DCA, such as the Neighborhood Preservation Program, with the exception of programs that award funds to help a municipality fulfill its fair share housing obligation.

The DCA would further be required to post on its website a list of municipalities that have amended their development regulations, ordered in a three-tiered system based on the impact of, and the number of changes made, relative to their planning area. This information would be utilized by State agencies to help award preference to municipalities for financial assistance.

Additionally, the bill would provide that the Commissioner of Transportation, in determining the allocation of funds from the “Transportation Trust Fund Account,” give priority consideration to municipalities that implement this bill’s provisions. Likewise, the bill would permit increases to a school district’s district aid percentage of no more than 10 percent if the school district is within a municipality that has implemented this bill’s provisions.