New Jersey Partially Restores Affordable Housing Trust Fund With $35 Million

The state Department of Community Affairs announced a partial restoration of a fund dedicated to building affordable housing in the state, following months of advocacy after the state gutted the fund back in June.

Officials said $35 million of the previously diverted $125 million will be returned to the Affordable Housing Trust Fund, which helps municipalities finance affordable housing construction. In addition, $10 million will be earmarked for Habitat for Humanity projects across the state.

The move was greeted as a positive first step by advocates, who have long argued that the trust fund is one of the state’s most vital tools to address a worsening housing crisis. But many also emphasized the need to fully restore the fund.

“We applaud this down payment toward addressing the housing needs of low- and moderate-income families, seniors, and people with disabilities,” said Matthew Hersh, vice president of policy and advocacy for the Housing and Community Development Network of New Jersey, in a written statement.

“We look forward to the full restoration of the Affordable Housing Trust Fund in the Lame Duck legislative session to make sure NJ is a place everyone can afford to call home,” Hersch added.

The Affordable Housing Trust Fund was established in 1985 and is financed in part through real estate transfer fees. Over the decades, it has helped municipalities build or rehabilitate thousands of homes intended for low- and moderate-income residents. 

Housing groups say the fund took on new urgency in recent years as rents and home prices surged. By their estimate, New Jersey faces a shortfall of more than 300,000 affordable homes at a time when many families are being priced out of the market.

The June diversion of $125 million out of the fund’s $130 million threw affordable housing projects into jeopardy, advocates said. 

Pressure has been building in Trenton to restore the fund. Last week, state Sen. Britnee Timberlake (D-Essex) introduced legislation that would restore the full $125 million.

That measure follows a bill introduced in June by Sen. Benjie Wimberly (D-Bergen) and Assemblywoman Verlina Reynolds-Jackson (D-Mercer), which seeks to dedicate a share of the state’s new “Mansion Tax” revenue to replenish the fund on an ongoing basis.

Advocates say they will keep pushing lawmakers over the coming months to make sure that the fund is reinstated and will survive long-term.

“Today’s announcement is a positive step in the right direction. Let’s finish the job and ensure the Trust Fund is fully and sustainably funded so every community can provide the affordable homes our residents need,” said Hersch.