The 4th Round is Here: Navigating NJ's Affordable Housing Obligations

The "Mount Laurel Doctrine" is the constitutional backbone of New Jersey's affordable housing policy. With the start of the 4th Round (2025-2035) on July 1, 2025, a new chapter has begun. Recent legislation has streamlined the process, but the pressure on municipalities—and the opportunity for developers—is higher than ever.

What is the 4th Round?

Every 10 years, municipalities must calculate their "fair share" of the regional need for affordable housing and adopt a plan to meet it. The 4th Round brings codified methodology (thanks to bill A4/S50), removing much of the judicial uncertainty of the past.

The "Builder's Remedy" Threat

If a municipality fails to adopt a compliant plan by the deadline, they lose their immunity from lawsuits. This opens the door for a Builder's Remedy Lawsuit.

In a successful builder's remedy suit, a developer can force the town to approve a project (often at higher density than current zoning allows) in exchange for providing a 20% affordable set-aside. It is the "nuclear option" of NJ development.

Inclusionary Zoning

Most municipalities meet their obligations through Inclusionary Zoning. This requires market-rate developers to set aside a percentage of units (typically 15% for rentals, 20% for for-sale) as affordable.

Developer Strategy: If you are proposing a rezoning or a variance, offering an inclusionary set-aside is often the key to unlocking municipal support. It helps the town meet its numbers while giving you the density you need.

100% Affordable Projects

Towns also partner with non-profits or affordable developers to build 100% affordable projects. These are "bonus" rich in the eyes of the state (often getting 2 credits for every 1 unit built) and are prime candidates for the Affordable Housing Production Fund (AHPF) and LIHTC.