Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
Co-Sponsored by:
Assemblyman Scharfenberger
SYNOPSIS
Requires Commissioner of Community Affairs to conduct study quantifying market impact of housing regulations.
CURRENT VERSION OF TEXT
As introduced.
An Act requiring a study to assess the market impact of housing regulations.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The Commissioner of Community Affairs, in consultation with other State and local government agencies and authorities as the commissioner determines necessary, shall conduct a study quantifying the costs related to housing regulations promulgated by the Department of Community Affairs and the impacts of the department’s rules and regulations on the housing market. In conducting the study, the commissioner, and any consulting partners, at a minimum, shall:
(1) review all departmental rules and regulations applicable to newly constructed or restored housing, including affordable housing, in the State, and identify all of the related regulatory compliance costs for which developers are liable; and
(2) assess the impact of departmental housing rules and regulations on the markets for rental and owner-occupied residential property for tenants and homebuyers; and
(3) assess the impact of permitting delays and the effects on the total costs of housing.
b. On or before the first day of the ninth month next following the effective date of P.L. , c. (pending before the Legislature as this bill), the Commissioner of Community Affairs shall submit a report, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature detailing the findings of the study.
2. This act shall take effect immediately.
STATEMENT
This bill requires the Commissioner of Community Affairs (commissioner) to conduct a study to quantify the cost of housing regulations promulgated within the Department of Community Affairs (DCA).
This bill requires the commissioner to conduct a study assessing the impact of DCA housing regulations on the housing market. The study, at a minimum, would review all DCA rules and regulations applicable to residential properties and identify all regulatory compliance costs for which developers are liable. Additionally, the study would assess the impact of DCA housing regulations on the rental and housing markets for tenants and homebuyers.
The study would also require DCA to assess the impact of permitting delays on the total development cost. Permitting delays alone can add significant timelines and costs to the total development costs. Lengthy review times may lead to extending deadlines for development, increasing both time and labor spent on the project development.
Regulatory costs account for a significant portion of the cost of single-family and multi-family residences. For single-family homes, roughly 25 percent of the total cost can be attributed to regulatory costs. For multi-family homes, regulatory costs account for nearly 40 percent of the total development costs. Changes in building and energy codes over the last decade have been found to increase housing prices by thousands of dollars. Additionally, developers are often responsible for impact fees and exactions imposed by municipalities, further adding to the increasing cost of housing regulations. By studying the impacts of the costs of housing regulations, this bill would provide information on the overall housing market in the State and assess what costs are factored into the total development price for housing.
Within nine months after the effective date of this bill, the commissioner would be required to submit a report detailing the findings of the study. This bill would take effect immediately.