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Bill

A 3877

Establishes certain State funding preferences for municipalities that enhance opportunities to develop housing.

2026-2027 Regular Session Introduced by Clinton Calabrese and 8 co-sponsors

Municipalities that amend development rules to allow more housing and higher density receive state funding preferences and weighted consideration in transportation and school facil

Referred to Senate Budget and Appropriations Committee
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Bill Summary · A 3877

Overview

  • Bill: A3877
  • Session: 222
  • Jurisdiction: New Jersey
  • Purpose: Establish state funding preferences for municipalities that adopt housing-friendly development strategies, and create a framework for evaluating and rewarding those efforts in the distribution of state funds.

Main purpose and intent

  • The bill aims to encourage municipalities to modify master plans and development regulations to permit higher-density housing and a broader set of housing strategies.
  • It provides a mechanism for preferential treatment in state financial assistance (grants and other competitively awarded funds) for those municipalities that implement these changes.
  • It also directs transportation and school facility funding considerations to give weight to municipalities that amend master plans to expand housing opportunities.

Key provisions and changes

  1. Special master plan reexamination

    • Municipal governing bodies may direct the planning board to conduct a special reexamination of the master plan and development regulations to enable greater residential development.
    • The planning board must review current housing-related provisions and may recommend changes to boost residential development potential.

  2. Housing strategies that may be adopted

    • The planning board can consider and recommend housing strategies to increase density, including:
      • Accessory dwelling units (ADUs) on single-family lots
      • Two-, three-, and multi-unit dwellings on previously single-unit restricted lots
      • Elimination or reduction of off-street parking requirements
      • Elimination or reduction of minimum lot size requirements
      • Siting of manufactured housing/mobile homes
      • Allowing multi-unit or mixed-use development on land zoned for office/retail/commercial
      • Requiring minimum of 10% of developable land for multi-unit dwelling
      • Higher density near transit
      • Elimination/reduction of minimum unit size requirements

  3. Process and reporting

    • If changes are recommended, the planning board forwards findings to the municipality’s governing body.
    • The governing body may accept, reject, or modify recommendations and initiate master plan amendments, with hearings as required.
    • If master plan amendments occur, the zoning ordinance may be amended to align with the housing plan elements.

  4. Preferential status in state funding

    • A new section establishes that municipalities that amend development regulations to allow additional housing strategies and increase permitted housing units will receive a preference when applying for state grants or competitively awarded financial assistance (excluding certain defined programs like fair share housing, shared services, or joint applications).
    • The Department of Community Affairs must publish a quarterly list of qualifying municipalities, categorized into three tiers based on impact and extent of changes.

  5. State agency implementation and rules

    • Rules will be adopted to implement these sections, including:
      • Specifying housing strategies suitable for a municipality’s region
      • Establishing a scoring/weighting framework for eligibility and preference values
      • Providing a housing siting and best practices guide

  6. Transportation funding preference

    • The Commissioner of Transportation must develop a criterion to prioritize projects in municipalities that amended their master plans to expand housing opportunities, within the Transportation Trust Fund funding process.

  7. Educational finance impact

    • The bill amends the current school facilities aid framework (state debt service aid and district aid percentage calculations) to incorporate potential increases in district aid or debt service aid if a municipality (or constituent municipalities in a regional district) has amended master plans to permit more housing.
    • For energy efficiency adjustments, the bill maintains existing provisions but ties possible increases in aid to the housing amendments.
    • Requires uniform methodology to determine eligibility for district aid percentage increases based on housing unit increases and adopted housing strategies.
    • Maintains an orderly process for grant applications and funding disbursement tied to project financing.

  8. Effective date

    • The act takes effect on the first day of the ninth month after enactment, with anticipatory administrative actions allowed for implementing agencies.

Affected parties

  • Municipalities: Potentially eligible for state funding preferences if they adopt housing-friendly plan amendments and strategies.
  • State agencies: Department of Community Affairs, Department of Transportation, Department of Education, and the Development Authority (for school facility funding) will implement and administer the program, rules, and funding disbursement.
  • School districts: May receive increased state aid percentages if located in municipalities that adopt housing strategies.
  • Residents and housing developers: May experience changes in zoning and development opportunities, enabling denser housing and different housing types.

Procedural and timeline notes

  • The act provides a structured process for special master plan reexaminations, reporting, and potential amendments, with required notices and intergovernmental communication.
  • The Department of Community Affairs will publish a quarterly list of municipalities qualifying for funding preferences and categorize them into tiers.
  • Rules and regulations are to be adopted under the Administrative Procedure Act to implement sections 1 and 2.
  • Transportation funding and school facility funding processes are adjusted to reflect the housing amendment preferences, including a uniform methodology for determining aid increases.

If you’d like, I can extract specific sections to compare with current law or provide a side-by-side impact analysis for municipalities of different sizes.

Compiled from official sources — confirm details with the bill’s official record.

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