New Jersey municipalities are now required to facilitate the construction or rehabilitation of over 146,000 residences for people with limited financial means over the next decade, following the release of new housing obligations mandated by a state law.

The calculations, published by the state Department of Community Affairs, were a requirement of legislation signed by Governor Phil Murphy in March. This law aims to streamline compliance with the state’s Fair Housing Act, which incorporates various state Supreme Court rulings known as the Mount Laurel Doctrine. These rulings established that every municipality must contribute its “fair share” of affordable housing. While municipalities are not obligated to build the housing themselves, they must ensure their zoning allows for its construction.

For the first time in decades, every municipality has a defined housing obligation. The last such obligations were set by the former Council on Affordable Housing in 1999. After that, the state Supreme Court determined that local courts should establish housing needs. In 2018, Mercer County Superior Court Judge Mary Jacobson estimated the overall housing need at about 305,000 residences for the period from 1999 to 2025.

The Department of Community Affairs utilized a formula based on Jacobson’s methodology, which considers vacant land, median household income, and other relevant factors. The state found that municipalities need to either build or rehabilitate over 65,000 units to meet current resident needs, with nearly 81,000 required to address future demands.

That total of 146,000 is lower than the over 200,000 affordable residences frequently cited by advocates and lawmakers. Only two very small municipalities, Tavistock in Camden County and Walpack in Sussex County, have no housing obligations. The state’s largest cities have the highest demands, with Newark needing 4,630 units and Paterson requiring 3,966, primarily achievable through renovating substandard units. The law signed in March has capped prospective housing needs, mandating that towns zone for new developments up to 1,000 units; Paramus, Secaucus, and Wayne are subject to this limit.

Municipalities must agree with the state’s figures by the end of January or can propose their own calculations if they comply with the law. For example, towns can adjust obligations downward if they can demonstrate insufficient sewer capacity to support the housing demand suggested by the formula. Under the new law, the housing estimates determined by municipal officials can be contested by builders, residents, or advocacy groups like the Fair Share Housing Center, which has previously engaged in over 300 court-designated obligations.

“I hope that we see municipalities drafting plans for how to meet these needs, how to create affordable housing effectively … and focus more resources on that than on litigation,” stated Adam Gordon, executive director of Fair Share Housing Center.

Local officials have until June 30, 2025, to adopt plans detailing how and where affordable housing can be developed within their areas. Gordon emphasized the need for municipalities to comply, noting that some local leaders have resisted their housing requirements.

“There always have been towns that have fought every round and will be fighting this round. But we have the most severe housing needs in decades,” he remarked.

More than 20 municipalities have recently challenged the March law in state court, claiming it is unconstitutional, with the matter still pending.