Murphy plan would use $305M to build 3,000 affordable housing units

As the affordable housing crisis worsens nationally, Gov. Phil Murphy wants to dedicate $305 million to construct affordable housing units, a plan advocates say would remove funding obstacles for thousands of homes across New Jersey.

Murphy presented the plan during his budget address Tuesday, calling for $305 million in federal American Rescue Plan dollars to be used to fund nearly 50 projects under municipal fair housing settlements that require a certain number of affordable housing units. Roughly 3,300 units have received approvals to be built, but construction is delayed because of a lack of funding. 

“These are projects that are essentially sitting until they secure funding. This investment is going to speed up development around affordable housing in the state,” said Alex Staropoli of nonprofit Fair Share Housing Center. “If those 3,300 units have to find other financing means, that means they would likely to continue to sit there.”

Murphy said in his speech the fund would provide “real stability for communities” and alleviate the burden on towns looking for new ways to fund the construction of affordable housing. 

“But most importantly, it will get working families into homes,” said Murphy, a Democrat who won re-election in November.

New Jersey municipalities are required to provide a “fair share” of affordable housing units because of a landmark state Supreme Court ruling known as the Mount Laurel doctrine. Affordable housing refers to units where a family is not spending more than a third of its household income rent, and it is typically set aside for low- and moderate-income families.

Among the biggest projects that could be funded under the $305 million plan, according to Fair Share Housing: 

• 240 units in Waterford Township, Camden County
• 190 units in Marlboro Township, Monmouth County
• 180 units in Harrison Township, Gloucester County near the Inspira hospital, including 21 homes reserved for people with disabilities
• 175 units in Union City, Hudson County, including apartments for seniors
• 158 units in Moorestown Township, Burlington County 

“This will increase the availability of apartments for seniors, young people, folks starting a family,” said Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey. “I’m always cautiously optimistic, but this seems like a real down payment for New Jersey families.” 

Advocates for affordable housing also applauded the governor for protecting the state’s housing trust fund in his budget plan. Berger said that was her main concern going into budget talks, so now advocates can focus on working with the Legislature to ensure the funding is included in the final budget.

The new plan would be separate from the trust fund, which can be used to build or support housing for people who make no more than 80% of the median income. In 2022, Murphy invested roughly $25 million into the trust fund after completely restoring it in 2020 with a $60 million infusion. The state realty transfer tax also contributes to the fund, bringing it to as much as $100 million, advocates said.

Still, activists say over $1 billion could be needed to fund municipal housing projects “to move the needle in a big way,” Berger said. 

“Even if this funds the additional 3,300 units, this won’t meet all the need that’s there,” Staropoli said. “It’s a great first step, but there’s always that need for more funding.”

The National Low Income Housing Coalition says there is a housing shortage for extremely low-income renters in every state. In New Jersey, there are 39 affordable and available rental homes for every 100 extremely low-income renter households. The national figure is 37 per 100.

Some suburban towns have resisted the state’s affordable housing laws, even taking the fight to court. Englewood Cliffs is locked in a yearslong court battle over development of 450 housing units on the former Unilever campus, 90 of which would be affordable, NorthJersey.com reported.

The investment in affordable housing is just one of the proposals in Murphy’s speech intended to make New Jersey more affordable. He also included a new program that would provide property tax rebates to 1.8 million homeowners and renters. 

Staropoli said she hopes Murphy and the Legislature also look at using federal funds for existing affordable housing in need of maintenance and repair, as well as a program for first-generation home ownership in areas where property is appreciating rather than depreciating. 

“We know New Jersey is facing an affordability crisis across the board, and housing is the cornerstone of individual’s and family’s well-being, and keeps people safe and healthy. We’re committed to working with leadership on these investments,” she said.