ASSEMBLY HOUSING COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1290

STATE OF NEW JERSEY

DATED: JUNE 10, 1996

      The Assembly Housing Committee reports favorably Assembly Bill No. 1290.

      The "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), created an obligation on the part of municipalities to make provisions for low and moderate income housing. Many municipalities meet this obligation by utilizing public funds, either through regional contribution agreements or directly, to make low interest loans to interested parties to improve existing housing stock. The bill grants municipalities the authority directly under the Fair Housing Act to finance housing projects in this manner, rather than relegating them to finance these projects under the requirements of the Local Redevelopment and Housing Law.

      Historically, courts have upheld the authority of municipalities to make loans or donations to further a public purpose when that power has been expressly granted by the Legislature. This bill specifically authorizes municipalities to use public monies to make donations, grants or loans of public funds for the rehabilitation of deficient housing units and the provision of new or substantially rehabilitated housing for low and moderate income persons, providing that any private advantage is incidental.

      This bill was prefiled for introduction in the 1996/97 session pending technical review. As reported, the bill includes the changes required by technical review which has been performed.