Advocates say the budget state lawmakers approved Monday undercuts funding for affordable housing. (Dana DiFilippo | New Jersey Monitor)
Advocates accused New Jersey lawmakers this week of underfunding affordable housing in the $58.8 billion annual budget they approved Monday.
The budget diverts money from the Affordable Housing Trust Fund, which supports the construction and preservation of housing for people earning at or below 80% of an area’s median income.
State officials anticipate collecting $130 million during the current fiscal year for the fund, but under the new budget will divert $125 million from affordable housing development and rehabilitation. That leaves just $5 million, which can only subsidize around 40 homes, according to the Housing and Community Development Network of New Jersey.
The diverted funds will instead be used for programs that help first-generation home buyers and rental assistance, which were separate budget items in previous years, according to the Fair Share Housing Center.
Staci Berger, the network’s president and CEO, said the diversion contradicts years of coordinated planning with developers and investment in housing projects.
“It is tone-deaf and irresponsible to use this money for anything other than its intended purpose,” Berger told the New Jersey Monitor.
A Rutgers-Eagleton poll released in May found that New Jersey residents support using the trust fund for its original purpose and enacting legislation to lower housing costs. More than half of New Jerseyans said their housing costs aren’t affordable and are getting worse, the poll found.
Jag Davies is a spokesman for the Fair Share Housing Center.
“Affordable housing benefits everyone in New Jersey, not just the residents, and addresses so many other social and economic problems at the root,” Davies said.
The disinvestment comes at a critical time, as July 1 marked the start of New Jersey’s fourth round of affordable housing obligations that go through 2035, Davies noted. By law, every municipality must submit a plan for how it will meet its affordable housing obligations.
New Jersey has an affordable housing shortage of nearly 290,000 fewer affordable homes, according to the network.
People of color are disproportionately impacted, Berger said. New Jersey’s persistent racial wealth gap is nearly double its pre-pandemic levels, the New Jersey Institute for Social Justice found in an April report.
“White folks have just significantly more wealth due to the equity in their homes, and unless we change the homeownership dynamic and undo 400-plus years of systemic and institutional racism that has permeated our lending market and our housing system, we aren’t really going to tackle that wealth gap in a meaningful way,” Berger said.
Still, the final budget was not without wins for people who need affordable housing.
Lawmakers passed legislation in both houses allowing the New Jersey Housing and Mortgage Finance Agency to distribute up to $100 million each year in tax credits to support the development or rehabilitation of affordable housing over coming years. The program does not replace the trust fund but will help, advocates say.
Advocates urged policymakers to support other proposals, some of which already are in the Statehouse pipeline, including:
Raising the eviction filing fee as a deterrent for landlords and a revenue source to fund eviction prevention programs, such as emergency rental assistance.
Adding a surcharge on the sale of luxury homes.
Adding a luxury landlord fee that can be forgiven if the landlord provides affordable units with inclusionary zoning or caps rent increases.
“Legislators need to urgently prioritize protecting vulnerable tenants and facilitating affordable housing development,” Davies said. “Without enhanced tenant protections, New Jersey and other states around the country are going to see a massive wave of evictions in the coming months and years.”
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX