Phil Murphy plans to take $46M from affordable housing. Here's why it's happening.

Published May 18
By Samantha Marcus

New Jersey's lieutenant governor this week defended the Murphy administration's multi-million-dollar raid of an Affordable Housing Trust Fund as one of the "impossible choices" it confronted in shaping its first state budget.

Sheila Oliver, who serves both as Gov. Phil Murphy's second-in-command and commissioner of the Department of Community Affairs, said the $46 million yanked from from the affordable housing trust fund in the governor's proposed budget will instead fund housing of vulnerable populations through the Department of Human Services.

"With the election of Governor Murphy, there was widespread anticipation that funding for construction and rehabilitation would return to pre-Christie era levels," she said.

"It was certainly a priority for the incoming administration. However, the magnitude of the budget mess that has been left behind by the previous administration was not previously known. We have a fiscal disaster that must be repaired."

Housing advocates have expressed concern that the diversion will exacerbate the state's already dire affordable housing shortage.

"New Jersey is number one in foreclosures, the top state for millennials still living at home and the seventh most expensive place in the nation to rent a home. This is not a coincidence. Our economy cannot thrive when people cannot afford to live here," said Staci Berger, president of the Housing and Community Development Network of New Jersey.

The trust fund receives funding through a state tax on home sales, the realty transfer fee.

The administration proposes to divert $46 million from that pot of money to the Department of Human Services, which Oliver told the Assembly Budget Committee on Wednesday is both permissible and will meet the housing needs of people with developmental disabilities, veterans and other people at risk of becoming homeless.

Oliver said the department still has $9 million to develop housing for low- and moderate-income residents and she anticipates it will be able to build 5,500 new housing units next year.

"This first budget is a downpayment and a promise of a higher economic forecast that will enable us to support the new affordable development that is so badly needed around the state," she said.

The Legislature is in the process of reviewing Murphy's $37.4 billion budget, an ambitious spending plan dependent on sales and income tax increases.

The governor wants $50 million for a tuition-free community college program, $284 million in new money for schools, $58 million for pre-K, $98 million to raise the property tax deduction cap from $10,000 to $15,000, and $12 million to create a child and dependent care tax credit.