AREA — Last week, Governor Phil Murphy signed off on a new legislative package that will effectively redefine the state’s approach to affordable housing and change the ways in which local obligations are determined.

“This is a victory that is, frankly, decades in the making,” the governor said Wednesday. “Our population is growing at a rate that continues to outpace our supply of affordable housing. In fact, some estimate that our state is facing a shortage of more than 200,000 affordable-housing units. In other words: We need to keep building – and fast.”

Among other provisions, bills included in the package will create a sales-tax exemption for materials and services used in the construction of fully-affordable housing developments, allow PILOTS (payments in lieu of taxes) for certain affordable housing projects, and establish an agreement to help offset insurance premiums associated with new construction.

“We are going to establish clear rules for how municipal affordable housing obligations should be calculated. It incorporates the standards that courts have used that have proved workable in practice,” Governor Murphy said. “This legislation will give municipalities bonus credits, as well, for constructing affordable housing where it is needed most, like near transit hubs, or for providing housing for vulnerable populations, like our senior citizens.”

The new legislation also will officially disband the Council on Affordable Housing (COAH), a state-level oversight commission that was established in the wake of the 1983 Mount Laurel decision and declared moribund during Governor Chris Christie’s administration.

Going forward, the state’s Department of Community Affairs will be tasked with determining the number of affordable units that each municipality will be required to build. The new obligations will be determined based on a formula described in a 2018 Fair Share Housing Act, which factors in considerations like developable land, property values and economic growth.

The new system additionally will enact legal protections for towns that meet deadlines for submitting affordable- housing plans, establish a court run system to adjudicate affordable housing disputes and provide bonus credits (which would decrease a municipality’s total obligation) to communities that convert existing market-rate units into affordable ones or extend affordability.

The state has allocated $16 million to fund the changes.

But while advocates of the recently adopted changes say that the new system will streamline the process and remove the burden of oversight from the courts, local leaders say the package, which will likely create new challenges at the municipal level, was pushed through the approval process too quickly.

“We know the Department of Community Affairs will conduct an open and transparent process, but ultimately, the housing number calculations will not be known until the end of the year,” the League of Municipalities wrote in a public statement earlier this month. “Understandably, municipalities are concerned whether the obligations will be sustainable and achievable.”

In its statement, co-authored by Westfield Mayor Shelley Brindle, the League also expressed concerns regarding potential legal recourse and protections.

“It’s premature to say how this [legislation] will impact Westfield, as we don’t know what our obligations will be, or how they will be calculated, which is why it seemed unreasonable to support the bill at this juncture in absence of knowing those critical specifics,” Mayor Brindle said.

Land-poor municipalities like Westfield and Garwood also could find themselves struggling under the weight of a provision that will require any municipality with a vacant land adjustment to satisfy an additional 25 percent of its currently unmet affordable-housing needs.

“I am concerned about the ramifications of this on Garwood,” Garwood Mayor Jen Blumenstock said. “Garwood worked hard to make good on our affordable-housing obligation in the last round, and while I will continue to support this important effort, we have to recognize that in a small, built-out town like Garwood, the land and resources just aren’t there. I am also concerned about the quick turnaround necessary between getting our obligation from the Department of Community Affairs and adopting our resolutions and dealing with challenges. I do also worry about Garwood’s protection from builder remedy lawsuits due to some of the language in the new amendments.”

The next round of affordable-housing obligation numbers will be released in 2025. Until then, Mayor Brindle said, local leaders will need to work diligently to stay ahead of the coming changes.

“Our desire for wanting more time to iron out the details should in no way be construed as a lack of support for the need for more affordable housing,” she said. “My hope and expectation is that we will continue to have a collaborative relationship with the Fair Share Housing Center which will result in a fair and reasonable outcome.”