Gov. Sherrill’s new initiatives aim to expand affordable housing in NJ

New Jersey is taking several major new steps to address its housing shortage by helping towns move from planning affordable housing to actively getting it built, while a federal, bipartisan housing bill also becomes law in Washington.

The effort is a part of Gov. Mikie Sherrill’s plan to make the state more affordable – a promise that was at the center of her election campaign last year – for middle- and working-class families across the state.

“More than a third of New Jerseyans spend over a third of their income on housing. We have a severe shortage of affordable homes. It’s driving working families out of the state,” says Sherrill.

Several reforms are driving the push for new housing options. Sherrill has issued an executive order to identify unused public land, especially near transit stops, where affordable housing can be built. The state has also boosted tax credits for builders to encourage mixed-use projects. In 2024, the Legislature overhauled the process by which municipalities must meet constitutionally required affordable housing obligations.  

And municipalities, with a long history of fighting housing requirements, seem to be embracing the new approach.

“The messaging we’re hearing from the administration is partnership, not preemption,” said Michael Cerra, executive director of the New Jersey State League of Municipalities.

The first step was the 2024 act, which abolished the Council of Affordable Housing and created a new method of determining and enforcing towns’ housing obligations on a tighter timeline. Of New Jersey’s 564 municipalities, 431 adopted resolutions to participate in the state’s affordable housing planning process.

Then Sherrill signed Executive Order 17 on April 27, requiring state agencies and authorities to identify unused, underutilized, and surplus property that could support housing or mixed-use development.

Sherrill’s order also created a Housing Governing Council tasked with coordinating housing policy across state government and developing recommendations for accelerating production. Agencies were given 60 days to report on land they own, existing or planned housing projects and regulatory barriers to development.

The council then is required to create recommendations for housing goals, land development, housing finance programs and methods to better accelerate production.

An NJ Transit spokesperson confirmed that it submitted its required report under Executive Order 17, though the agency did not provide details on which additional properties were identified through that process.

The order represents an opportunity for the state to examine its own role in the statewide housing shortage after years of imploring municipalities to assess their viable land, according to Cerra.

“Maybe the state, for the first time, is assessing its own house,” he said. 

The public-land effort could contribute to housing production, according to Tim Evans, research director at New Jersey Future, a nonprofit land-use policy research and advocacy organization, but he cautioned against comparing its potential impact with the 2024 Affordable Housing Act.

The 2024 Act “requires all municipalities to have a plan for how they are going to satisfy their affordable housing responsibilities,” Evans said. “Whereas the state-owned land… It’s good that they’re doing it, because every little bit helps, but I don’t know that it’s going to have as much of an impact as [the Act] and the Mount Laurel obligations.”

The Mount Laurel doctrine originated with a March 1975 state Supreme Court ruling requiring developing municipalities to provide their “fair share” of affordable housing, prompting decades of disputes over how those obligations should be calculated and enforced.

Unlike Mount Laurel, Executive Order 17 does not require housing construction, just evaluation of what state property could realistically support development.

Even if the state has a limited stock of unused land, Evans identified property surrounding transit stations as one of the state’s most promising development opportunities.

NJ Transit has already begun evaluating its properties for potential transit-oriented development through its LAND Plan, released in October 2025. The agency said full implementation of the plan could produce approximately 14,000 to 20,000 housing units over the next decade, including 2,600 to 4,000 affordable units.

Residential projects built on NJ Transit-owned or controlled land must reserve 20% of newly constructed units for low- and moderate-income households under state law, according to the agency.

The potential for transit-oriented development, however, varies significantly across the state.

Rail stations in the north have been prioritized because they connect access to New York City jobs and New Jersey’s housing market, while in South Jersey, fewer rail lines and weaker connection to major employment markets make transit-oriented development more difficult.

Even land located around transit may require significant changes before it can support successful communities.

“[If] the street network isn’t connected to what’s around it, it ends up functioning like a little pod of urbanism,” Evans said.

Finding land is only the first step of development, however.

The state may need to more actively connect agencies that control land with developers who know how to turn those properties into housing, explained Evans.

NJ Transit said determining whether public land can support housing requires evaluating local zoning, environmental and site conditions, infrastructure capacity, market conditions, financing and transit operational needs.

But Cerra, from the League of Municipalities, sees an even bigger challenge. “More directly, I think the biggest obstacle is funding,” he said.

Affordable housing developments often rely on combinations of private investment and federal tax credits to make projects economically feasible.

“Sometimes you need the stars to line up perfectly in order to make a project like that happen,” Cerra said.

In Washington, a bipartisan federal housing package co-sponsored by New Jersey Sen. Andy Kim became law Saturday. 

The federal plan would provide resources to the state to address those barriers. It would restrict large corporations from buying single-family homes, expedite zoning and permitting processes, and authorize a $200 million annual grant program to incentivize local governments to create housing. 

It overwhelmingly passed both chambers of Congress, but Trump called the bill “a yawn.” He refused to sign it since lawmakers had not passed his controversial voter identification legislation, instead allowing the housing measure to become law without his signature.

Cerra said identifying land is only a starting point because new housing can require investments in roads, water, sewer systems and public transportation while municipalities simultaneously maintain aging infrastructure.

“I hope it’s going to go beyond the inventory of land,” he said. “I hope it’s going to be an identification of the resources to match the infrastructure.”

The administration is also expanding NJHOMES, a Department of Community Affairs program providing municipalities with training, technical assistance and resources for small affordable housing projects, from 10 participating towns to 30 additional municipalities.

That assistance marks a change from a process in which towns historically felt that “a bunch of data went into the box, and the box came out and gave you your number, and you’re on your own,” said Cerra. Now, municipalities have an earlier timeline to plan their projects.

The Sherrill administration has also launched a permitting dashboard to track state approvals and used its first tax-credit auction to generate $35 million for affordable and workforce housing, with nearly $400 million expected over five years, and continued funding for the state’s Affordable Housing Trust Fund.

The new initiatives collectively reflect a shift in the relationship between the state and municipalities, Cerra said.

Rather than only assigning towns affordable housing obligations, the state is increasingly attempting to provide land, planning assistance, and financing tools to help municipalities meet them.

Even a limited inventory of state property could have an impact beyond the housing ultimately built on that land.

“If the state does it, it can serve as an example for lower levels of government to look at the properties that they own and size them up as potential sites for building housing,” Evans said.

Whether the initiatives meaningfully increase housing production will ultimately depend on what the state’s inventory reveals and whether available land, financing, infrastructure and developers can be brought together.

“They don’t even know where it’s going to lead, but it’s good that they’re doing it because at least it’s drawing attention to the issue,” Evans said. “Leading by example is important.”

This article is written by Devon Williams, courtesy of the NJ State House News Service