The Rent is Too Damn High, Advocates Tell NJ Lawmakers
Urge raising costs for predatory, corporate landlords and luxury homes to support housing affordability for hardworking NJ residents

9/23/2024

The New Jersey Assembly Housing Committee today hosted a hearing on the impact of rising rental housing costs throughout the State, the factors contributing to these increases, and strategies to help control rising costs. In his testimony Housing and Community Development Network of NJ (the Network) Director of Policy and Advocacy Matthew Hersh suggested potential revenue sources for housing security and stability programs.

“Housing is a human right, so we encourage our elected leaders to take a principled stance on this issue,” said Hersh. “It’s going to take bold leadership to address the housing affordability crisis but fortunately, we do have tools available at our disposal to create more affordable opportunities for our residents.”

New Jersey’s Affordable Housing Trust Fund is the major, dedicated source of funding for affordable home creation in New Jersey. Increasingly, it is being utilized to fund housing security, stability and affordability programs as well. To preserve the intended use of the Trust Fund and ensure that construction and rehabilitation resources remain available to fill the need for more affordable homes to be built, the Network recommends the following:

  • Expand the realty transfer fee: Expand the fee, the primary funding source for the Affordable Housing Trust Fund, so that it is progressive and collects more revenue from the sale of very expensive homes. This revenue could be used to support first-time/first-generation homeownership opportunities, like the programs at the Housing and Mortgage Finance Agency, and others to help address our worst in the nation racial wealth gap.

  • Lower the rent: Enact a fee on for-profit, luxury developments that could be forgiven or refunded if the landlord provides affordable units through inclusionary zoning and/or keeps rent increases at a reasonable rate.

  • Make evictors pay: Increase the eviction filing fee, currently $50, as a disincentive/revenue raiser for eviction prevention funding. The current fee is significantly lower than other states. Data from The Eviction Lab found that raising the filing fee will reduce evictions and create a pool of revenue to help people get the resources they need to avoid being forced out of their homes, like right to counsel, back rent assistance and other diversion tools.

  • Fees on Super Luxury Homes: New research from the Center for Budget and Policy Priorities and the Institute on Taxation and Economic Policy suggests that adding a 4 percent tax on the sale of homes above $1 million could raise substantial revenue for the state. This new revenue source could fund vital programs that make living and raising a family in the state more affordable, and the impact of this fee would be limited to a small fraction of the housing market. Statewide, less than 10 percent of home sales exceed $1 million. Levying a 4 percent tax on home sales over $2 million would affect only the top 2 percent of sales, while raising over $200 million in annual revenue for the state. Extending this same tax to homes sold over $1 million could generate hundreds of millions of dollars more for the state.

  • Expand the New Jersey’s Neighborhood Revitalization Tax Credit (NRTC): The NRTC, which the Network helped to create in 2002, is among the state’s most successful tax-credit programs because it intentionally requires an approved neighborhood plan devised with community stakeholders. The program is currently oversubscribed, according to the state Department of Community Affairs, and the current $15 million program cap restricts its potential. It should be tripled just to match the applicant pool of pre-qualified applicants.

“Since the pandemic, we've seen an unprecedented amount of public investment to create more affordable homes, but rising rents are hindering any progress we make, harming families and our economy,” said Hersh. “The Legislature plays key role in establishing a robust housing safety net, preventing evictions and homelessness, and alleviating housing instability for those with the lowest incomes. New Jersey’s leaders need to think of homeownership and rental homes from the ground up, because the only way we are going to stabilize the housing market is to first make sure that everyone has a right to a home.”

About the Housing and Community Development Network of NJ
The Housing and Community Development Network of New Jersey is the statewide association of more than 275 community development corporations, individuals and other organizations that support the creation of affordable homes, economic opportunities, and strong communities. For more information on the Network, visit www.hcdnnj.org.