Under the Mount Laurel Doctrine, all towns in New Jersey have to provide their fair share of the region’s need for affordable housing. A loophole to that policy was enacted as part of the 1985 Fair Housing Act, which allowed Regional Contribution Agreements (RCAs) to be used to transfer up to half of a wealthy town’s affordable housing obligation to a poor town. In the past 25 years, as a result of the Mount Laurel litigation, some 40,000 affordable homes have been built in wealthy, suburban towns. Ten thousand more would have been built in those towns if it had not been for RCAs.
Governor Jon S. Corzine signing bill A-500.
Under the legislation that was signed on July 17, 2008, RCAs going forward have been abolished. This historic legislation closes the primary loophole that towns used to avoid providing affordable housing. This will require towns to meet all of their fair share obligations within their own borders rather than paying other towns to accept the housing.
Two other provisions in the bill are worth noting: Thirteen percent of the affordable housing built in towns is now required to be very low income (which here means 30 percent of median income and below, or approximately $20,290 annually). This amendment will go far in advancing the racial and economic integration goals of the Mount Laurel doctrine. Also, a statewide development fee of 2.5 percent has been imposed on all commercial development. This is projected to create $163 million annually for affordable housing.