New Jersey’s ambitious affordable housing plans will be challenged in federal court on Wednesday after a judge has agreed to holding a hearing for municipalities in opposition to the state’s policies.
A group of about three dozen towns is suing, saying the state’s formula for calculating housing requirements is unconstitutional, and they want the judge to pause a deadline to zone for high-density development.
The Local Leaders for Responsible Planning is the group of 27 towns suing the state on the federal level.
Municipalities in Bergen County, including Montvale, Hillsdale, Millburn and Allendale, along with the townships of Little Falls, Wall and Warren, are some of areas represented in the lawsuit against the state.
Nearly 40 towns did not reach housing agreements by the Dec. 31, 2025 deadline, according to a statement from the Fair Share Housing Center on Monday.
The center said some of these disputes involved “advanced bad faith interpretations of the law” and others have “only minor” disputes that will most likely be resolved in the next couple of months.
The towns still in dispute must file a revised housing plan by the next deadline of March 15, 2026, depending on the judge’s decision on Jan. 7.
Signed into law by Gov. Phil Murphy in 2024, the affordable housing law eliminated the state’s former council and created a new system for calculating housing policies and resolving disputes through a court-managed program.
Last year, a lawsuit was filed by 27 towns seeking to block the affordable housing law. But the suit was dismissed after a judge rejected claims that the law imposes unfair costs on local governments.
Housing advocates at the Fair Share Housing Center said the new affordable housing policies are working and have seen massive success, despite the few towns that were unable to meet the deadline.
The center is reporting that about 380 municipalities developed compliant housing plans by the end of last year, showing “an unprecedented level of participation” from towns across the state.
“For decades, New Jersey’s affordable housing system was bogged down by delay and litigation,” said Adam Gordon, executive director of the non-profit organization.
“This new law is working exactly as intended — bringing towns to the table, resolving disputes efficiently, and moving us toward the actual construction and preservation of affordable homes,” Gordon added.
The process of implementing affordable housing policies in New Jersey has been anything but easy.
In October 2025, towns including Chatham, Morris Plains and Monroe passed resolutions opposing a newly proposed bill, S4736, that aims to loosen affordable housing rules for religious and nonprofit groups in New Jersey.
The bill, which has not yet been enacted into law, would require local planning boards in the state to approve certain property conversions into housing developments if they meet the measure’s rules.
Town resolutions argue that the measure’s provisions would be an “egregious assault on municipal autonomy” and allow developers to “bypass” the local planning process.
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