Leveraging New Opportunities in Multifamily Housing

How New Jersey’s Affordable Housing Act Fourth Round Opens More Doors

Housing affordability remains a pressing issue in New Jersey. Recent data reveals that nearly 50% of renters allocate 30% or more of their income to rent, a designation that categorizes them as “cost-burdened” according to the federal Department of Housing and Urban Development (HUD).

Compounding this challenge, the construction of attainable multifamily housing has become increasingly difficult due to municipal resistance to the density necessary for financial viability. Despite state mandates requiring municipalities to fulfill their “fair share” of affordable housing, demand continues to outpace supply by more than 214,000 units.

However, a promising new approach is emerging: municipalities are beginning to engage in discussions about updating zoning regulations, allowing for increased density, and offering tax incentives to facilitate successful developments. With the Fourth Round of New Jersey’s Affordable Housing Act mandating that towns accept their obligations by January 2025, the time to act is now.

The time to act is now. Postponing commitments is no longer an option—now there’s a direct path to accountability.

— Dan Duggan, Associate, Warren, NJ

In this Q&A, Bohler Associate Dan Duggan and Director of Planning and Landscape Architecture Adam Alexander provide insights into the evolving legislation and the exciting opportunities it offers property owners with underperforming assets. With new incentives and strategic collaborations among municipalities, developers, and property owners can transform struggling properties into thriving, sustainable communities.

Developers positioned at the forefront of this initiative will have the chance to secure the best properties and negotiate favorable deals.

What is New Jersey’s new affordable housing legislation?

Adam:

The legislation essentially expands and modifies the state’s Affordable Housing Act as New Jersey enters its Fourth Round of implementation. This legislation provides clearer guidelines on municipal obligations and introduces a streamlined compliance process to support consistent affordable housing development across the state.

Notably, it offers new incentives– like increased density, new zoning, or tax incentives–making it more appealing for developers to contribute to affordable housing solutions.

Dan:

The legislation requires every municipality in New Jersey to meet an affordable housing “obligation” number. Each town must accept its obligation by January 2025 and have a concrete plan for affordable units by June 2025. Postponing commitments is no longer an option—now there’s a direct path to accountability.

This shift opens up significant opportunities for collaboration between developers and municipalities to devise creative solutions that can make projects feasible, which may not have been possible in the past.

Developers positioned at the forefront of this initiative will have the chance to secure the best properties and negotiate favorable deals.

— Adam Alexander, Director of Planning and Landscape Architecture, Warren, NJ

Where do you see the biggest opportunity to leverage this legislation?

Dan:

One of the biggest opportunities we see for developers lies in leveraging this legislation to transform underperforming commercial sites such as office parks, shopping centers, and manufacturing spaces that haven’t adapted to evolving market demands. Many of these properties are in highly desirable locations with established infrastructure but may lack the necessary zoning or density allowances to support a viable project. However, many municipalities are now more open to adopting the zoning changes needed to facilitate projects that address affordable housing needs while revitalizing underperforming assets.

Adam:

Bohler’s planning team is well-positioned to help communities tackle their affordable housing shortfalls with creative concepts and yield studies for redevelopment-ready properties. By transforming outdated retail spaces or converting office and industrial properties into multifamily and mixed-use projects, we can help drive revitalization while creating vibrant community spaces.

Our approach prioritizes outdoor areas for play, relaxation, and social connection, a strategy that has already succeeded in Princeton, Rochelle Park, and Metuchen, where these creative solutions have enriched communities and expanded affordable housing options.

What are some examples of successful revitalizations?

Adam:

In Metuchen, Klein Enterprises worked closely with the local officials and Middlesex County to redevelop the former factory site into a state-of-the-art residential building while preserving a portion of the site for a county nature preserve. This was Metuchen’s first PILOT agreement, but the mayor is fully supportive, stating, “It is this very project that’s enabling us to open the largest recreational space in Metuchen, fund a variety of important infrastructure projects throughout the borough, and help protect our environment, all while providing our community with new housing options that will give many people the freedom to stay in the very community where they grew up and open doors for new neighbors.”

In Rochelle Park, Tulfra Real Estate transformed a former AT&T data center into a six-story multifamily community known as The Delford. As part of the project, Tulfra utilized funds saved from its PILOT agreement to remediate an existing onsite pond, creating a public tranquil retreat for the community.

Dan:

The Princeton Shopping Center has been redeveloped into a mixed-use village with inclusionary affordable housing, helping the municipality earn a New Jersey Future Smart Growth Award. With a focus on enhancing walkability and improving transit access, Edens and Avalon Bay revitalized underutilized areas, including an outdated shopping center and a vacant office park – plans made possible due to Princeton officials’ willingness to collaborate and think outside the box.

How can property owners and developers identify opportunities?

Adam:

For property owners, the first step is reaching out to a land development consultant, like Bohler, to assess the property’s potential and connect you with developers who are ready to transform it. You should also conduct an initial assessment to outline viable options that align with market demands, setting the stage for a successful collaboration.

Dan:

For developers, early engagement with the municipality is essential. Meeting with local officials from the start helps establish a shared understanding and allows us to communicate our goals, gauge their interest, and identify potential challenges. This collaboration is critical to navigating the approval process and creating solutions that work for everyone involved.

Ready to leverage affordable housing opportunities in New Jersey? Connect with our team.