Advocates Decry NJ’s Budget Move As A Devastating Setback For Affordable Housing

By: Priyanka Bansal

Housing advocates are sounding the alarm after the state’s $58.5 billion fiscal year 2026 budget diverted $125 million in funds from the Affordable Housing Trust Fund, the state’s only dedicated source of funding for affordable home development. 

They warn this decision threatens to deepen an already severe housing shortage, where there is a deficit of nearly 300,000 affordable homes across the state. 

“We just feel like the rug was pulled from underneath our feet and it’s devastating. But the great thing is it could be fixed,” said Edward Bethea, executive vice president and chief operating officer of Gateway Community Action Partnership. Their applications for 13 housing units are now on hold, along with 20 other units in various stages of development. 

The trust fund was established in 1985 and has been critical for municipalities, advocates say, by enabling them to acquire lots and invest in local staff and personnel. This year, 423 towns submitted plans for affordable housing, a record number of projects relying on Affordable Housing Trust Fund dollars.

Affordable housing organizers say they have seen an increase in safety, play space, walkability, improved mental health, and financial capabilities – as families are spending less on rent and funnelling generational equity into their mortgages. 

Bridget Phifer, CEO of the Parkside Business and Community in Partnership, said the Affordable Housing Trust Fund gave communities tools to close the racial wealth gap. 

“Housing is a human right. Housing helps to build community. Housing brings pride to communities that in many instances have been disinvested and have been long forgotten,” Phifer said. “Not only are we not able to provide housing for families who need it but it changes the trajectory of the community as well.”

According to Scott Millard of the Passaic County Habitat for Humanity, there are 144 homes in the state’s pipeline over the next two years that will not be built without proper Affordable Housing Trust Fund money.

The decision to take away the previously-promised funding from the trust fund comes at the start of a 10-year planning period, where municipalities submit proposals for affordable housing. 

While the state recently passed the “Mansion Tax,” a surcharge on property sales over $2 million, advocates are pushing for new legislation, which would direct half of the new revenue from this tax to the Affordable Housing Trust Fund. 

“The housing market is out of control right now and we’re seeing housing prices skyrocket to levels we’ve never seen before,” said Matthew Hersh of the Housing and Community Development Network of New Jersey.

Public sentiment reflects growing concern from advocates. According to a poll from the Eagleton Institute of Politics, more than half of New Jersey residents say housing costs are increasingly unaffordable. 

When asked about the state Legislature’s decision to divert money from the Affordable Housing Trust Fund, a spokesperson for the Assembly Majority Office said in a statement that “Assembly Democrats have worked hard to increase affordable housing in the state.”

“Thanks to our landmark affordable housing legislation, 424 New Jersey towns are making plans to build more affordable housing without being tied up in litigation, and we just passed a bill that will provide $500 million in tax credits to build more affordable housing. Prior to that, $600 million in federal COVID relief funds were allocated to affordable housing construction,” the statement said.

While advocates applaud the state’s efforts to invest in affordable housing, they believe they are still left without answers regarding the future of the trust fund. The Housing and Community Development Network of New Jersey has launched a campaign to restore the funding. Their efforts include billboards along the NJ Turnpike, digital advertising, and direct outreach to lawmakers, urging immediate action.

“It’s time for the state to step up, fulfill their obligation and restore their funding to this fund so we can really move forward and address this major housing crisis in the state of New Jersey and assist all of the New Jerseyans who are desperately looking for a place to call home,” said Liz DeCoursey, CEO of Greater Middlesex and Morris Habitat for Humanity.

Looking ahead, lawmakers are expected to reconvene this summer, where advocates plan to demand answers and push for restoration of the trust fund. Residents are encouraged to contact their representatives and share their stories through HouseNJ.Org, a platform designed to amplify voices calling for affordable housing solutions.

Staci Berger, president of the Housing and Community Development Network, urges New Jerseyans to also call and write to lawmakers, determined to make their voices heard. 

“The legislature has some explaining to do. Because we are the folks who have been out in the front lines in neighborhoods and in communities that none of the for-profit developers have wanted to work in for the last decade,” she said. “We need and deserve the resources to do that work and we’re not gonna rest until we get them.”