Housing Policy Suggestions for the Next Governor of New Jersey

1. **Engage Expert Professionals**: It is imperative to appoint skilled professionals in critical state positions, particularly in housing and development. Many current positions are occupied by political appointees lacking the requisite expertise, which consequently hampers progress. Merging certain agencies could enhance inter-agency cooperation, accountability, and efficiency.

2. **Establish a New Cabinet Position**: The creation of a role analogous to the Secretary of Housing and Urban Development (HUD) at the state level is essential to effectively address housing issues specific to New Jersey.

3. **Optimize Fiscal Allocation**: It is crucial to allocate funds designated for affordable housing production correctly, avoiding their diversion to unrelated programs. The state generates significant revenue through property transactions, accruing over $200 million annually intended for the development of affordable housing. Unfortunately, this funding has been drastically reduced to approximately $35 million in the previous budget approval. By securing the intended financing, municipalities would reduce their reliance on inclusionary zoning, potentially satisfying housing obligations through wholly affordable projects aimed at individuals and families earning between $50,000 and $100,000 who seek homeownership.

4. **Revise Housing Regulations**: It is necessary to reevaluate and amend housing policies that currently pose barriers to potential purchasers. For instance, the stipulation that single individuals or couples must constitute a household of at least three individuals to qualify for state-funded single-family home purchases inhibits prospective buyers from investing in less desirable areas or starting families.

5. **Amend Unjust Equity Regulations**: There is a need to reform regulations that limit the amount of equity families can retain when selling their homes. Existing financing arrangements for government-supported housing projects do not align with federal standards. By revising these regulations to align with guidelines from Hudson County, which follow federal standards, families would be able to retain the full value of their hard-earned equity. Government financial assistance should be perceived as an investment that enhances family financial stability. The current practice of depriving families of up to 95% of their equity upon sale is inequitable and detrimental to the goal of promoting homeownership. Lessons should be drawn from successful initiatives such as the GI Bill and FHA that facilitate wealth accumulation.

6. **Address Regulatory Loopholes**: It is vital to eliminate loopholes exploited by large developers to circumvent affordable housing creation requirements through customized redevelopment plans. This amendment would address issues in gentrifying markets and enable municipalities to implement inclusive zoning regulations that apply uniformly to all projects.

7. **Prioritize Homeownership**: Facilitating access to homeownership is a paramount objective. The state should promote development in areas such as Salem, fostering community growth and establishing housing policies that benefit all residents. Tax incentives for small developers to invest in these regions should be considered, alongside coordinated state efforts to support these markets.

8. **Maximize Federal Subsidy Utilization**: New Jersey currently possesses over $80 million in unallocated HOME dollars across various jurisdictions. By instituting a more effective production-focused system, the state could leverage these funds in conjunction with its resources.

9. **Implement a $100 Million Homeownership Tax Credit**: This initiative would stimulate investment in regions like Salem, which harbor a considerable inventory of underutilized properties. Marketing efforts should also be directed at prospective homeowners to facilitate matches with developers.

10. **Explore 40-Year Mortgage Options**: There is a need for research into the viability of 40-year mortgages as a means to enhance affordability. Given that residents typically do not occupy their homes for the full 30-year term, a longer mortgage duration may enable homeowners to benefit from equity appreciation and facilitate entry into the housing market. While it may extend the repayment period, this approach should be viewed within the context of investments. The state, already involved in mortgage lending, should consider the successful implementation of such programs in other states.

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