Earlier this week, Mayor Ras J. Baraka introduced to the Municipal Council an ordinance that will accelerate the development of affordable housing in the City of Newark, by requiring developers to set aside 20 percent of their residential units for affordable housing, in projects that consist of 30 or more new or substantially rehabilitated units.
The “Inclusionary Zoning for Affordable Housing” Ordinance, which is an amendment to Title 41 of the Newark Zoning and Land Use Regulations, will require developers who are creating or rehabilitating housing projects of more than 30 units to set aside 20 percent of them as affordable housing. It mandates housing affordable to those in a different income levels ranging from 40 percent of the area’s median income to 80 percent. The marketing of the affordable units must give priority to Newark residents. Unlike New York City and other cities with inclusionary zoning, the Newark ordinance applies to all new residential development throughout the city, not just in designated areas. And, unlike other cities, the affordable units must be provided on site and not in other locations. The affordable units may involve home ownership as well as rentals.
“This is a groundbreaking step in housing development in the city of Newark and a pioneering step for all of America’s cities,” Mayor Baraka said. “We are forging an innovative collaboration with developers, whereby they are not only committing to the economic growth of our City but also to enabling residents to remain in Newark, improving their living conditions, preventing the kind of gentrification that happens in other cities undergoing development, and assisting with the facilitation of home ownership. Once again, Newark is leading the way, defining to the nation how a city cares for its residents, and what a city should a be.”
Developers who are building properties that are entirely affordable or less than 30 units are exempt from the ordinance. In addition, under certain circumstances, developers, with the approval of the Zoning Board of Adjustment, can make a voluntary cash payment into the city’s Affordable Housing Trust Fund in lieu of constructing all or part of the income-restricted units required by the legislation. The amount of payment-in-lieu is based upon the percentage of required affordable units that are actually included in the project.
These payments can be reduced if the developer builds retail space within specific neighborhoods or rehabilitates residential homes, to be sold at cost, within a specific neighborhood.
The payment-in-lieu program is not intended to be a right available to developers at their sole option. The policy we are inaugurating is to favor the construction of income-restricted units. These payments-in-lieu will simply be an additional way for the city to create affordable housing for residents.