New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments

New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units.

For developers with new projects, the changes are important. For developers with projects that were approved during the Third Round of New Jersey’s affordable housing process but have not yet been constructed, the implications may be even more significant.

The revised UHAC regulations establish new requirements concerning the duration of affordability controls, unit size, building standards, architectural features, and the relationship between affordable and market-rate units. At the same time, the regulations attempt to preserve certain rights and expectations associated with prior-round projects. The result is a regulatory transition that developers should not navigate by simply assuming that an existing planning-board resolution or settlement agreement controls every aspect of an affordable housing obligation.

Revised UHAC Regulations Took Effect in November 2025

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) adopted revised UHAC regulations pursuant to the Fair Housing Act and P.L. 2024, c. 2. The current rules became effective November 6, 2025. The regulations govern the administration of many affordable units in New Jersey, including units created to satisfy municipal affordable housing obligations.

Among other things, the new rules establish requirements governing affordability controls, income certification, marketing, occupancy, unit design, and construction standards. For developers, one of the most important questions is not simply what the new rules require, but which rules apply to a particular project. That question can become even more complicated when a project was approved years ago as part of a municipality’s Third Round affordable housing strategy but remains unbuilt as the State transitions to the Fourth Round.

Not Every Unbuilt Third Round Project Is Automatically Grandfathered

The revised UHAC regulations define a “prior round unit” to include housing that addresses a municipality’s fair-share obligation from a round preceding the Fourth Round. The definition includes, among other things, units that are part of a Third Round settlement agreement or court-approved judgment of compliance, including units created pursuant to a zoning designation adopted as part of that agreement or judgment.

However, an important qualification applies to units created after March 20, 2024, when P.L. 2024, c. 2 was enacted. Such a unit generally will not qualify as a prior-round unit unless it was created pursuant to a prior-round development plan or zoning designation that received COAH or court approval on or before June 30, 2025, or before the municipality adopted its implementing Fourth Round ordinances and resolutions, whichever occurred first. In addition, the project’s siting and creation must remain consistent with the prior-round development plan or zoning designation in effect as of the applicable cutoff date, without an amendment or variance.

The last requirement deserves particular attention. A developer may have received planning-board approval years ago, but that does not necessarily answer how the affordable units will be treated under the current UHAC framework. Changes to the project, zoning, unit configuration, or other material elements can affect whether the units continue to qualify for treatment as prior-round units. Accordingly, developers should not assume that a project labeled “Round Three” in an older resolution is necessarily insulated from the new requirements.

Deed Restrictions May Be Longer Than Developers Originally Anticipated

The revised regulations also establish new minimum affordability-control periods. For ownership units created on or after December 20, 2024, the minimum control period is generally 30 years. For rental units created on or after that date, the minimum control period has increased from 30 years to 40 years. Different rules apply to certain existing prior-round units and to extensions of existing affordability controls.

For developers of unbuilt projects, however, the question is more complicated. The applicable control period may depend on when the unit was created, when it receives a certificate of occupancy, whether it qualifies as a prior-round unit, and what approval, agreement, or other instrument governs the affordable housing obligation. That makes the development approval language, construction timing, and the proposed deed restriction particularly important.

The New Rules Also Affect the Physical Design of Affordable Units

The changes are not limited to how long an affordable unit must remain restricted. The revised UHAC regulations contain detailed requirements governing the physical characteristics of affordable units. For example, certain projects must provide affordable units with minimum square footage requirements tied to the Neighborhood Preservation Balanced Housing Program rules. In certain mixed-income developments, restricted units must be comparable to market-rate units in terms of building materials and architectural design elements, although different interior finishes may be permitted.

For rental developments, the rules address matters such as building materials, insulation, siding, plumbing, heating and cooling, windows and unit type. For-sale developments are subject to requirements concerning building standards, integration of affordable units throughout the development and access to communal amenities.

These provisions can have practical consequences for a developer’s plans. An affordable unit designed under older assumptions may no longer meet the requirements for a project subject to current UHAC standards. Changes to unit square footage, layouts, building materials, or architectural features can affect construction costs, building plans, and, in some cases, the economic assumptions underlying a project.

Developers should therefore review the affordable-unit plans at the same time they review the proposed deed restrictions. Treating those issues separately can create problems later in the approval or construction process.

What Happens When the Planning Board Already Agreed to Different Terms?

This may be the most consequential issue for developers with unbuilt Third Round projects.

A planning-board resolution, settlement agreement, developer’s agreement or other approval may establish specific terms concerning the affordable housing component of a development. Those terms may include the number and type of affordable units, their location, bedroom distribution, construction standards and the duration of affordability controls.

Adopting new UHAC regulations does not necessarily mean every previously approved term is automatically superseded. In fact, NJHMFA has specifically stated that the new rules are not intended to disrupt existing settlement agreements concerning unalterable aspects of prior-round projects. Prior-round units that satisfy the regulatory definition generally remain subject to the applicable prior-round approval or agreement for matters such as physical unit standards.

This protection makes the classification analysis more important, not less. If an unbuilt project qualifies as a prior-round development, the developer may be able to rely on the standards associated with the existing approval. If the project does not qualify as a prior-round unit under the new definition, the current UHAC requirements may apply to physical aspects of the affordable units. This creates a potential disconnect between what a developer negotiated with a municipality several years ago and what the State’s current regulations require.

In practical terms, a developer could be told that a previously negotiated deed restriction, unit design, or construction standard must be revised before the affordable units can receive the necessary approvals or certification. Whether state regulations require that result in a particular case depends on the project’s history and the documents governing the obligation. Still, developers should identify the possibility before investing further in engineering, architectural plans, or construction.

Developers Should Audit Their Affordable Housing Approvals Now

For private residential developers with projects that include affordable housing obligations, a UHAC review should be part of the project’s legal and development due diligence. At a minimum, developers should determine:

• Which round created the affordable housing obligation? Confirm whether the project is genuinely a prior-round project under the current UHAC definition.
• What approvals are in place? Review planning-board resolutions, settlement agreements, judgments of compliance, zoning ordinances, developer’s agreements, and other documents establishing the affordable housing obligation.
• What deed restriction was contemplated, and what is the required affordability period? Compare the previously negotiated or approved deed restriction with the current UHAC forms and requirements and confirm whether the project is subject to a 30-year ownership restriction or a 40-year rental restriction.
• Have the project plans changed? Determine whether amendments, variances, revised site plans, or other changes could affect prior-round status under the new regulations.
• Do the affordable-unit plans satisfy current requirements? Review square footage, bedroom configuration, windows, heating and cooling, building materials, architectural elements, and access to amenities.
• What does the municipality expect? Before finalizing plans or deed restrictions, developers should confirm how the municipality and its administrative agent are interpreting the new regulations as they apply to the specific project.

This review is particularly important before a developer submits amended plans to a planning board. A seemingly routine amendment could affect whether the project continues to qualify for prior-round treatment.

A Proactive Review Can Prevent Expensive Changes Later

The transition from the Third Round to the Fourth Round of New Jersey’s affordable housing system creates an unusual situation for developers with projects that were approved but never built. The revised UHAC regulations provide meaningful protection for certain prior-round projects. Still, those protections are not unlimited and are dependent on the project’s history and compliance with the regulatory definition.

Accordingly, developers should not wait until construction documents or deed restrictions are being finalized to determine which UHAC requirements apply. A project approved under one set of affordable housing assumptions may now operate in a substantially different regulatory environment. Determining the applicable rules early can help identify potential conflicts with existing approvals, protect negotiated development rights, and avoid redesign or renegotiation after significant time and money have already been invested.

How Scarinci Hollenbeck Can Help

Developers with unbuilt or ongoing affordable housing projects should work with experienced counsel to review the project’s approvals, settlement documents, zoning history, and proposed deed restrictions against the current UHAC regulations as soon as possible. Early identification of a potential conflict with the Fourth Round framework may allow you to resolve the issue with the municipality before it becomes a construction, financing, or closing problem.

For guidance, we encourage you to contact Scarinci Hollenbeck’s dedicated New Jersey affordable housing attorneys. Our team has experience navigating the complex legal, zoning, and compliance requirements of affordable housing, representing both municipal governments and private real estate developers.