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In an effort to spur development and increase affordable housing, the board of the New Jersey Economic Development Authority on Friday approved rule changes that will increase per-project caps, expand eligibility for transformative projects and increase affordability controls for residential units.
The Aspire Program, a gap financing tool to support commercial, mixed-use and residential real estate development projects, already has been used for 10 projects — awarding more than $500 million in credits for projects representing more than 500,000 square feet of commercial space, 490 income-restricted units and 1,040 market-rate units.
EDA CEO Tim Sullivan was obviously pleased.
“Since launching, the Aspire Program has supported innovative commercial projects like HELIX and affordable and mixed-income residential developments in downtowns across the state, including in Newark and Trenton,” he said.
“The adoption of these new rules will allow the NJEDA to support even more transformative, mixed-use, transit-oriented development, which will help revitalize communities and strengthen our economy. Importantly, the rules will strengthen affordable housing, increasing access to hardworking New Jersey families.”
The new rules approved by the board include:
Increased project awards
In response to spiking inflation, supply chain disruptions and rising interest rates, the new legislation increased caps per project according to the following schedule:
- 80% of eligible costs up to $120 million for Atlantic City, Trenton and Paterson;
- 60% of eligible costs up to $90 million for 4% Low-Income Housing Tax Credit projects, projects in a qualified incentive tract, municipality with a Municipal Revitalization Index score over 50, or an enhanced area;
- 50% of eligible costs up to $60 million for all other eligible projects;
- Transformative project caps are subject to the above percentages with a dollar cap of $400 million.
Transformative projects
Transformative projects must demonstrate special economic importance to New Jersey and leverage the state’s mass transit assets, higher education assets and other economic development assets to attract or retain employers and skilled workers or in targeted industries by providing employment or housing. Transformative projects must meet the following criteria:
- Minimum project costs increased from $100 million to $150 million;
- Minimum commercial project size remains 500,000 square feet, or
- 300,000 square feet in an enhanced area;
- 200,000 square feet in Atlantic City, Paterson or Trenton;
- 250,000 square feet for film production studios;
- Minimum residential project size of 700 newly constructed units;
- Minimum mixed-use project of 50,000 square feet plus
- 200 residential units in Atlantic City, Paterson or Trenton;
- 300 residential units in an enhanced area;
- 400 residential units in other eligible locations.
Affordability controls
For a project that includes newly constructed residential units, at least 20% of the units must be reserved for low- and moderate-income households. These income-restricted units will include a minimum number of three-bedroom units and a maximum number of studios and one-bedrooms, ensuring more options for families. They also include more units for very low-income and low-income households with the remainder for moderate-income.
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