By Joshua Burd
The New Jersey Housing and Mortgage Finance Agency is launching a new tax credit program meant to spur hundreds of millions in private investment in new workforce and affordable housing production across the state.
The offering, which HMFA approved at a recent board meeting, will begin Oct. 27 with an auction that allows winning bidders to apply the credits to the Corporate Business Tax or Insurance Premium Tax for up to seven years after their purchase. The agency will sell up to $500 million in state tax credits through competitive auctions over the next five to six years and at a minimum value of 80 percent of the tax credit amount, generating at least $400 million for housing production after accounting for administrative and operational costs.
The State Tax Credit Subsidy Program, which allows HMFA to sell up to $100 million annually, will redeploy unused state tax credits that had been allocated to other state subsidies — namely, the Brownfields Redevelopment Incentives, Aspire and the Emerge programs.
“The launch of the State Tax Credit Subsidy Program marks a pivotal step forward in NJHMFA’s commitment to expanding access to safe and affordable housing for low-to-moderate income families,” Executive Director Melanie R. Walter said. “By creating a competitive and transparent auction for raising funds to subsidize workforce and affordable housing production, NJHMFA is unlocking new opportunities for public-private investment in the communities that need it most. The STCS Program strengthens NJHMFA’s financing tools and deepens NJHMFA’s impact — ensuring that more families across New Jersey have a place to call home.”
Half of the money in the STCS Program Fund will be reserved for the creation of workforce housing through the Workforce Housing Fund set-aside, while the remaining half will be used to continue the landmark Affordable Housing Production Fund to help municipalities meet their housing goals, HMFA said. Both programs require that the gap subsidies are paired with federal 4 percent Low-Income Housing Tax Credits, which the agency also administers.
“Every person in New Jersey deserves the dignity that comes with having a safe and affordable place to call home, but for too long, that promise has felt out of reach,” state Assembly Speaker Craig J. Coughlin said. “These tax credits make that dream possible and will spur the development of both affordable and workforce housing by closing critical financing gaps and moving long-awaited projects forward. In doing so, we’re strengthening our commitment to helping more families find stability and making New Jersey a more affordable place to live for generations to come.”
According to the agency, the auction portal will accept bids for 30 days and will be accessible on the HMFA website at https://www.nj.gov/dca/hmfa/about/auction/. It’s encouraging all qualifying New Jersey businesses to participate in the offering, which affords New Jersey taxpayers the opportunity to realize direct, dollar-for-dollar tax reductions while supporting billions of dollars’ worth of development for workforce and affordable housing.
The subsidies from the STCS Program will create new affordable homes and middle-income housing for families earning between 80 and 120 percent of the area median income.
“The people who keep our communities running — teachers, nurses, construction workers, police officers and so many others — are working hard to make a living yet still find themselves weighed down by the cost of housing,” state Senate Majority Leader M. Teresa Ruiz said. “To truly confront New Jersey’s housing crisis and ensure every family has a place to call home, we need a comprehensive approach — one that not only expands affordable housing but also creates more options for middle-income families who don’t qualify for assistance yet remain priced out. For the first time, these initiatives demonstrate a long-term commitment to building both affordable and workforce housing, giving families more breathing room in their budgets and the opportunity to continue living in their neighborhoods for generations to come. There is no greater investment than ensuring that public servants and other pillars of our communities can afford to live in the very places they devote their lives to serving.”
Workforce and affordable housing subsidy applications will begin to be accepted on a rolling basis and approved based on a project having demonstrated that it meets all eligibility criteria and has secured firm funding commitments from all other financing sources, HMFA said. Since STCS Program funding is contingent upon the sale of state tax credits, subsidy award recommendations will only be presented to the HMFA’s board for consideration to the extent funds are available.
Any businesses interested in participating in the Oct. 27 auction should get a Tax Clearance Certificate from the New Jersey Division on Taxation, which can be done by emailing [email protected] or calling -609-322-6835. For information on the STCS Program Fund, please reach out to [email protected].
