Summary#
S-4845 is an introduced New Jersey Senate bill that is not yet law. It would create two housing programs, a special loan fund inside the New Jersey Infrastructure Bank, and a task force; it would also amend existing laws, including the Infrastructure Bank law. Its stated goal is to support social and workforce housing projects.
- The New Jersey Housing and Mortgage Finance Agency would run a Social Housing Program offering tax credits to local government redevelopers to cover some or all of a project’s financing gap.
- To qualify, a social housing project generally must be on land owned by the local government redeveloper in an “enhanced area,” have at least 300 units, and use general obligation bonds for at least 20% of project costs. It must permanently reserve at least 20% of units for low- and moderate-income housing and at least 20% for workforce housing.
- Social housing projects must meet other conditions, including paying construction workers at least the prevailing wage. Projects built under a project labor agreement could qualify for tax credits up to 85% of eligible costs, compared with 80% otherwise; a project’s total credit would be capped at $225 million.
- The Housing and Mortgage Finance Agency, working with the Economic Development Authority, would certify qualifying workforce housing projects. The State Investment Council and Treasury’s Division of Investment must consider investing in certified projects, subject to investment duties; they may invest at least 5% of funds in affordable or workforce housing.
- The bill would create the Human Infrastructure Bank Fund inside the existing New Jersey Infrastructure Bank. The Bank may lend from it to developers of certified workforce housing projects; the fund would receive legislative appropriations and other specified money.
What it means for you#
- Local governments and their redevelopers: They could apply for social-housing tax credits, but would have to meet the project, affordability, labor, and other conditions. The bill sets an application fee of up to $10,000. It does not give residents an individual right to housing.
- Housing developers: They could seek workforce-project certification if they meet the location, affordability, project-labor-agreement, apprenticeship, investment, and monitoring requirements. Certification makes a project eligible for consideration for investment or a loan; it does not guarantee either.
- Construction workers: On social housing projects receiving awards, construction workers must be paid at least the applicable prevailing wage during the eligibility period. Workforce projects must use a project labor agreement and be affiliated with a registered apprenticeship program.
- Residents: The bill’s income definitions put low-income housing at 50% or less of area median household income, moderate-income housing above 50% and below 80%, and workforce housing at no more than 120%. The bill does not set rents or explain how households would apply for units.
- Taxpayers and public investors: The bill authorizes tax credits and possible public investment and lending. It does not directly change household taxes or create a new independent bank.
Money#
The bill sets a $475 million total cap on social-housing tax credits, but the available material gives no estimate of actual costs or funding.
- A social-housing project’s credit could be no more than 80% or 85% of eligible project costs, subject to the project’s financing gap and the $225 million per-project cap.
- The Human Infrastructure Bank Fund would receive money appropriated by the Legislature, loan repayments, interest earnings, and other available money; no appropriation amount is specified.
- The State Investment Council and Division of Investment may invest in housing, but the bill does not require a particular investment amount in any project.
- The bill authorizes a non-refundable social-housing application fee of up to $10,000.
What is unclear#
- The supplied bill text ends during an amendment to the Infrastructure Bank law. The rest of the bill and the current text of laws it amends were not provided, so existing rules and any further changes cannot be verified.
- The bill refers to project scoring, but the supplied text does not explain the scoring criteria. It also leaves application details and many program rules to the Housing and Mortgage Finance Agency.
- It is unclear how the required workforce and low- and moderate-income unit shares interact, including whether units can count toward more than one share.
- The task force must recommend suitable public-land sites within a year, but the bill also says it expires after issuing a report due within six months. How it would complete both duties is unclear.
- The bill does not state how much funding will be appropriated, how many projects might be funded, or how workforce-housing loans would be selected.
Case for#
- A possible argument for the bill is that public entities could help close financing gaps for large housing projects that otherwise are not economically feasible.
- Long-term affordability requirements and the rule directing at least 75% of certain rental surpluses to social housing maintenance or production could support continued affordability and upkeep.
- Workforce-project certification could connect housing proposals to State investment and infrastructure-bank loans, while requiring apprenticeships and project labor agreements.
- The bill would require periodic project reporting and biennial reports on the social-housing program.
Case against#
- One concern is that tax credits could be large, while the bill does not provide a budget estimate or guarantee how many affordable units would result.
- The bill gives agencies important choices over awards, rules, and monitoring, but the supplied text does not fully explain scoring or project-selection standards.
- A possible trade-off is that public retirement-system funds could be invested in housing projects, even though the bill makes those investments subject to fiduciary duties and prudent-investment standards.
- The bill does not clearly explain how projects would be coordinated with existing housing programs or how prospective residents would gain access to the units.