In Brief

Bill would create fund to guarantee rent payments for some low-income renters

By: - November 27, 2023 2:51 pm

A proposed $10 million pilot program would pay landlords to encourage them to rent to low-income residents with poor credit scores. The tenants would then pay the state back. (Dana DiFilippo | New Jersey Monitor)

Some low-income New Jerseyans’ rental payments would be guaranteed by a new state fund under a new bill approved by a Senate panel Monday in a bid to boost housing availability for residents with poor credit scores.

The bill approved by the Senate Urban and Community Affairs Committee would create a $10 million pilot program that would cover participants’ missed and partial rent payments as a way of encouraging landlords to rent to individuals whose credit scores might otherwise preclude housing.

“All of us had some issues with credit in the past, but 10 years and 12 years later, I don’t think it should haunt you when you’ve shown credibility going forward,” said Sen. Renee Burgess (D-Essex), the bill’s prime sponsor. “I think it just gives a good chance for people to come home.”

In addition to rent, payments from the fund could cover property damage, legal fees, and payments for which the tenant is responsible.

The program would pay landlords, and participants would be responsible for repaying the money within 90 days of the state’s payment. Repaid money would go back into the non-lapsing fund.

“It’s not free money,” said Nicholas Kikis, vice president of legislative and regulatory affairs for the New Jersey Apartment Association, an industry group that supported the bill.

The pilot would cover 1,000 households chosen at random from those enrolled in the state’s rental assistance program, which provides housing subsidies to very low-income households, and could include residents who receive federal Section 8 vouchers and have completed housing and credit counseling courses.

The bill would require the commissioner of the Department of Community Affairs to report how many participants missed at least one rental payment, how often those who missed a payment did so, and participants’ credit ratings within 18 months of the program’s launch.

Burgess cautioned it is too early to say how the program could expand if proven successful, but said later provisions could include creditworthiness classes and guidance to encourage upward mobility. 

“I think the next step would be trying to maintain that person’s credibility and accountability to maintain their ownership,” she said.

The Assembly Community Development and Affairs Committee unanimously approved the bill in May, but it will still need to clear budget committees in both chambers before reaching floor votes.

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Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.