Jersey City is moving forward with adopting an inclusionary zoning ordinance. However, it will first have to resolve the differences between two competing affordable housing proposals.

Affordable Housing Plan to Include Inclusionary Zoning

The City Council of Jersey City recently voted to form a committee to reconcile the differences between inclusionary zoning ordinances proposed by Mayor Steve Fulop and Council President Rolando Lavarro. The final proposed ordinance is expected by August. “This clearly sends a message that the initiative and the effort will continue to move forward,” Lavarro said. “This is an important issue to get this right and make sure we have a robust debate on it so I look forward to doing that.”

As we have discussed in greater detail in prior articles, inclusionary zoning is an affordable housing tool that ties the creation of affordable housing to the creation of market-rate housing, with the goal of encouraging new residential developments to make a certain percentage of the housing units affordable to low- or moderate-income residents. In New Jersey, Newark and Hoboken already have inclusionary zoning requirements in place.

Jersey City’s Proposed Inclusionary Zoning Ordinances

Both inclusionary zone ordinances proposed in Jersey City would require developers seeking zoning changes to set aside 20 percent of their projects’ units as housing for low- and moderate-income residents. The affordable housing thresholds are also the same. Low income is defined as earning 50% or less of median gross household income, while the range for moderate income is between 50% and 80% of median gross household income.

There are, however, several key differences between the inclusionary zoning ordinances that must be resolved. The Fulop Administration’s ordinance (Ord. 19-056) provides exemptions for developments of 30 units or less; any project which is to be undertaken by the Jersey City Housing Authority; and rezoning initiated by the City as a result of a Master Plan Update or Amendment.

Meanwhile, Lavarro’s plan (Ord. 19-054) exempts the first ten housing units of substantial rehabilitation projects. It also exempts development under an adopted redevelopment plan subject to an executed redevelopment agreement between the City of Jersey City and a redeveloper, unless amended subsequently or the development has entered in a Payment In Lieu Of Taxes [PILOT] agreement with the City.

Another key difference is that Mayor Fulop’s ordinance includes several methods of relief for developers, including:

  • Off-Site Units in Lieu: The city may permit the creation of off-site affordable units for some or all the obligation, provided that certain conditions are satisfied. They include, among others, that the off-site affordable housing units are within the same Ward as the development.
  • Payment in Lieu: At the discretion of the approving authority, developers can also make a voluntary cash payment into the City of Jersey City's Affordable Housing Trust Fund in lieu of constructing all or part of the affordable housing units required by the ordinance.
  • Community Benefits: A reduction in the mandatory on-site affordable housing requirement may also be considered relative to the value of community benefits proposed by the developer. Eligible community benefits would include the construction of a public facility, such as, but not limited to, public schools, public recreational facilities, government offices, fire stations, police stations, public parking garages, public transportation systems or facilities, roads and water infrastructure, etc.

Lavarro opposes providing developers with alternative ways to satisfy the affordable housing obligation and does not include any in his proposal.  “We want to see real affordable housing built,” he said. “It’s too easy for developers to be able to obtain relief, whether it’s the payments, whether it’s building off-site, whether it’s community benefits,” he stated.

The members of the Scarinci Hollenbeck Land Use group have significant experience with development and redevelopment projects in Jersey City. We will continue to track the progress of the proposed ordinance and provide updates as they become available.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Donald M. Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.