In the end, Housing and Local Government Committee Chairman Jerry Green (D., Union) stood by the proposal, which resulted from four months of work after he declined in June to allow his panel to vote on a Senate affordable housing bill widely known as S. 1.
Green's measure - as well as an amended S. 1 - passed with four Democratic votes. Morris County Republican Michael Patrick Carroll voted no, and Bergen County Republican Charlotte Vandervalk abstained.
The bill goes for a vote to the full Assembly, where Green said he expected it to pass.
Whether the proposal will get broader traction is another question, with the 2.5 percent fee a likely sticking point. Throughout the hearing, Green was insistent on retaining the fee to subsidize housing, given the state's fiscal problems. The fee is in effect but had been targeted for elimination under S. 1.
Grifa countered that the burden of funding affordable housing over time had shifted from residential to commercial construction, which was inappropriate in "this very fragile economy."
The measure would abolish the state Council on Affordable Housing, which enforces how towns comply with Supreme Court rulings that municipalities must provide their "fair share" of affordable housing.
Under the Assembly proposal, the vast majority of New Jersey's 566 towns would require developers to set aside 10 percent of new residential projects as affordable.
The set-aside requirement would not apply to municipalities - generally more urban areas, such as Camden - in which 10 percent of the total housing is deemed affordable, or in which between 25 and 50 percent of schoolchildren qualify for free- and reduced-price lunches.
It's unclear whether the use of set-asides will survive expected legal challenges after an appeals court for the second time in three years on Oct. 8 threw out state regulations that tied affordable housing obligations to new development. The decision found that the mechanism allows towns to avoid building low-cost homes by discouraging growth.
Green said he was against any measure that would change the appearance of a town, adding that he wants to bring affordable housing into communities without upsetting them.
Another controversial piece of the proposal allows proposed developments in "noncompliant towns" to be deemed "inherently beneficial" when the builder applies for a zoning variance, if 20 percent of the units are affordable. That led some opponents to fear developers would be given free rein and the character of towns would be negatively altered.
To achieve "compliance" with the new affordable housing mandate, towns could zone 20 percent of their vacant, developable land for those with a household income of up to 150 percent of the region's median household income.
Housing advocates voiced concern that the 150 percent threshold did not meet the standard for housing affordable to low- and moderate-income people, which is considered up to 80 percent of the region's median income. They also opposed a provision allowing developers to opt out of building the required set-asides by paying a fee of 2½ percent of the project's value in "compliant" towns, and 3½ percent in noncompliant towns, toward affordable housing trust funds.
Staci Berger of the Housing and Community Development Network said the legislation would result in no affordable homes - because it would be cheaper for developers simply to pay opt-out fees that languish in the bank - and set the state's housing policy back decades.
The bill calls for the state to take money from municipal housing funds if it is not spent within four years. That money could then be put toward low- and moderate-income units at the state's direction, but some feared that it would lead to a lag in providing housing for those who can least afford to wait.
Herb Levine, executive director of the Mercer Alliance to End Homelessness, told lawmakers that those he represents "can't wait those four years. We need a mechanism that will get us moving."
Contact staff writer Maya Rao at 856-779-3220 or email@example.com