New Report Highlights Link Between Local Zoning and Housing Affordability

May 17th, 2023 by Tim Evans

New Jersey is experiencing a housing affordability crisis, one that hits lower-income households particularly hard. But New Jersey has a unique set of laws requiring local governments to zone for affordable housing, and a new report demonstrates that these laws work when enforced.

New Jersey is one of the most racially and economically segregated states in the nation, and also has among the country’s highest housing costs, due in part to exclusionary local zoning that limits the types of housing that are permitted. Zoning limitations on both the supply and variety of housing options drive up costs, and put many places out of reach for lower-income households. Barriers to affluent, low-density zoned neighborhoods remain high, especially for Black households who experienced redlining and still experience forms of systemic racism. Because of the correlation between race and income, exclusionary zoning is a prime driver of both racial and economic segregation.

Fair Share Housing Center’s new report, Dismantling Exclusionary Zoning: New Jersey’s Blueprint for Overcoming Segregation, demonstrates how enforcement of court-imposed requirements resulting from the Mount Laurel State Supreme Court decisions in the 1970s and 1980s, which mandate local governments to provide affordable housing, is addressing regional inequities. In particular, it illustrates how the production of affordable units accelerated since supervision of municipal compliance was turned over to the courts following the 2015 dissolution of the Council on Affordable Housing (COAH), the state agency created by the Fair Housing Act in 1985 to implement requirements, but which became ineffective.

Not only does the report show that New Jersey’s system works when it is actually enforced, it also shows how local zoning changes designed to comply with affordable housing requirements have had a much broader effect, stimulating the production of more market-rate multi-family housing types that benefit middle-class and working-class households who are also increasingly facing the affordability crunch. Towns often meet their obligations by producing affordable units as part of “inclusionary” developments that also include market-rate units, and these inclusionary developments are almost always multifamily developments, which increase the supply of rental units in a municipality.

By focusing on local zoning and on the increased production of multifamily housing, this report creates a new starting point for the discussion of how New Jersey can increase supply, variety, and affordability of housing stock and remain an attractive place for households of all types and incomes. We look forward to building on this work to ensure that more people can afford their homes in well-planned, smart growth communities that are open and inclusive of all races and incomes.