New Jersey’s recently passed state budget has drawn criticism for reducing funding to the Affordable Housing Trust Fund, a key resource for addressing the state’s ongoing housing affordability crisis. Advocates are calling on Governor Phil Murphy to maximize available funding and sign new legislation aimed at creating tax credits for housing development.
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Reductions to Affordable Housing Trust Fund
The state’s decision to slash funding for the Affordable Housing Trust Fund has been met with strong disapproval. Al-Tariq Witcher, Managing Director of External Affairs at FSHC, expressed concern, calling it a “big mistake” to cut the fund at a time when municipalities are developing long-term plans to address affordable housing needs. The trust fund is especially important for smaller projects that don’t qualify for many federal funding options.
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Diverting Funds to Other Programs
Instead of supporting housing production, the trust fund money has been reallocated to programs like first-generation homeownership and the state rental assistance program. These initiatives, while valuable, were traditionally funded separately from housing production efforts, leaving the state with reduced resources for building new affordable housing.
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Mansion Tax Impact
Further compounding the issue, the new budget limits the “mansion tax” to homes sold for over $2 million, instead of the original $1 million threshold. The additional revenue generated by this tax, which was initially earmarked for affordable housing, will now go into the state’s general fund, rather than being directed to the Affordable Housing Trust Fund.
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Call for Action on Housing Legislation
Despite these setbacks, advocates are pushing forward with new legislation, A3128/S4071, which has passed both houses. This bill authorizes the New Jersey Housing and Mortgage Finance Agency (HMFA) to allocate $100 million annually in previously authorized but uncommitted tax credits for new or rehabilitated affordable housing. While these tax credits are not a direct replacement for the trust fund, they will help fill financing gaps in affordable housing projects.
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Addressing the Housing Shortage
Witcher emphasized that the affordable housing shortage in New Jersey is a pressing issue, particularly affecting low-income families and communities of color. Although recent legislative progress, such as the state’s new affordable housing law, has been made, advocates argue that much more work is needed to address the state’s housing crisis.
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Governor Murphy’s Role
FSHC is urging Governor Murphy to sign the new tax credit legislation into law and work to restore full funding to the Affordable Housing Trust Fund. “The shortage of affordable housing in New Jersey hurts everyone,” Witcher said, calling on the Governor to ensure that as much funding as possible goes toward housing production.
