State budget yanks $125M, leaving affordable housing plans in limbo
By: Michael L Diamond
Asbury Park Press
USA Today Network - New Jersey
..... Dozens of small housing projects are on hold after New Jersey lawmakers agreed to divert much of the $130 million from a trust fund designed to help builders develop affordable properties, housing advocates said.
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The decision to use the money for home buying and rental assistance instead of building new housing will make it more difficult for them to add to the state's supply of housing and ease the demand from buyers and renters.
..... "To raid this fund now - especially when federal housing resources are under threat - is devastating," said Randi Moore, chief executive officer of Affordable Housing Alliance, a nonprofit based in Neptune.
..... Governor Phil Murphy touted the state's $58.8 billion budget as a step that would help make New Jersey more affordable. But he and the Democratic-led Legislature have been taking criticism form progressive and conservative groups alike, saying they missed opportunists. Among the critics are housing advocates who three months earlier lauded Murphy and lawmakers for reforming the state's affordable housing law and ushering in the fourth round of the Mount Laurel doctrine - the mandate that each town provide its fair share of affordable housing during the next decade.
..... In the aftermath of the state budget, they said lawmakers missed their chance not only to invest money from the Affordable Housing Trust Fund in new developments, but also to add to it through a new tax on luxury home sales.
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"We can't build an affordable state unless we build affordable homes," said Matthew Hersh, vice president of policy and advocacy for The Housing and Community Development Network of New Jersey.
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Affordable housing is geared toward low- and middle-income residents who make less than 80% of the median income. The state is diverting upward of $125 million form the anticipated $130 million Housing Trust Fund, advocates said.
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Among the organizations scrambling to fill a funding gap is Habitat for Humanity. The nonprofit builder said it applied to the trust fund to help finance 71 units of new housing, but those projects have been put on hold by the Department of Community Affairs. It planned to submit application for another 81 units over the next six months.
..... It is now searching for other sources of funding, officials said.
..... The organization is "continuing to invest in new affordable housing, and the diversions from the trust fund will continue to make it harder for us to do so in the coming years," said Meredith Darche, executive director for the Monmouth county Habitat for Humanity. "This diversion, along with potential cuts for housing at the federal level, will put an enormous strain on private philanthropy throughout the state."
..... The Affordable Housing Trust Fund was created in 1985 as part of the New Jersey Fair Housing Act to create a funding stream for rental and homeownership projects with 25 or fewer units. The funding comes from a tax on real estate sales. This year's [ [2026] budget isn't the first time money has been diverted form it. Murphy, like his predecessors Chris Christie and Jon Corzine, tapped into it to fill other priorities, New Jersey Spotlight News reported.
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Among the priorities this year: [2026] provide more down payment assistance to first-time and first-generation buyers thorough a Housing and Mortgage Finance Agency program, which officials said has provided $125 million in assistance since 2022, helping more than 10,000 buyers purchase homes.
..... "Over the past 7 1/2 years, the Murphy administration's Department of Community Affairs has invested almost $250 million into housing production, supporting the construction of nearly 1,600 affordable housing units," Murphy spokesperson Tyler Jones said. "the New Jersey Housing and Mortgage Finance Agency has also cerated and preserved more than 30,000 attentional affordable housing units. With this budget, we continue to build on these efforts with the funding of several initiatives creating pathways to affordable housing."
..... Advocates said the demand for affordable units has only intensified since the endemic, when people migrated from the cities to the suburbs in droves, sending home prices and rent higher.