Affordable Housing Support Services

The principals of Nassau Capital Advisors, LLC have developed a growing advisory practice assisting municipalities in New Jersey address the challenges associated with the Mt. Laurel affordable housing mandate of the New Jersey Supreme Court.

In 2013, the Supreme Court invalidated the Round 3 regulations of the Council on Affordable Housing (COAH).  In 2014, COAH failed to adopt new regulations in accordance with the Court’s mandate.  In March, 2015, the Supreme Court eliminated COAH’s jurisdiction in the matter, and returned to the judicial branch of state government oversight over affordable housing policy.  The Supreme Court designated trial courts throughout the state to adjudicate issues in their respective jurisdictions involving municipal prospective need for Round Three compliance, petitions seeking immunity from builder remedy actions, and related matters.

The principals of Nassau Capital Advisors, LLC have considerable experience as financial advisors to municipalities in Mt. Laurel affordable housing matters.  We have provided assistance and guidance to scores of N.J. municipalities on the development and financing of affordable housing.  We assist municipalities and their affordable housing legal and planning teams in navigating the judicial process of establishing “fair share” allocations and developing workable plans for inclusionary zoning.

Our principals, Dr. Robert S. Powell, Jr. and Gerry Doherty, authored a report published in September, 2015 by the New Jersey State League of Municipalities, entitled Demographic and Economic Constraints on the Inclusionary Zoning Strategy Utilized for the Production of Low and Moderate Income Housing in New Jersey. View the report.

To best understand the ways our team might assist a municipality in addressing these affordable housing challenges, a brief background review of inclusionary zoning is useful useful.


iStock_000016768857MediumThe New Jersey Supreme Court’s 1983 Mt. Laurel decision established a constitutional obligation that municipalities, in the exercise of their delegated power to zone, “afford … a realistic opportunity for the construction of [their] fair share of the present and prospective regional need for low and moderate income housing.”  In 1985, the Legislature enacted the Fair Housing Act (FHA), creating the Council on Affordable Housing (COAH), and directed that agency to develop rules for the implementation of the Court’s policy. The tool the Court and Legislature both envision that municipalities will utilize to establish this “realistic opportunity” for affordable housing is inclusionary zoning. The tool relies on private capital for the subsidy of affordable housing.  The strategy is to provide financial incentives to private developers, in the form of density zoning bonuses for development in certain areas of a community.  In return, developers agree to subsidize a certain number of low and moderate income housing units.

The reliance on private capital, as opposed to public subsidies, is a fundamental element of New Jersey’s affordable housing strategy.  In fact, The Fair Housing Act specifically notes that nothing in that statute “shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing.”

Thus, the development of a realistic, economically-feasible inclusionary zoning strategy requires the courts and municipalities to address a number of financial and economic issuesNassau Capital Advisors can assist the parties in understanding and addressing these financial issues, so that the outcome of the judicial proceedings will produce affordable housing plans that are realistic and credible.

Assistance in Developing Workable, Smart Plans

Once the courts establish affordable housing goals, a municipality should understand the financial and economic basis for inclusionary zoning projects in order to craft the smartest plans.  Nassau Capital Advisors, LLC can assist municipalities with this work.  The financial issues that arise at this stage of the process include the following:

  • Are the density bonuses in an inclusionary zoning plan adequate to produce a feasible project?  If not, the plan likely won’t be built, or can be successfully challenged by a developer.
  • On the other hand, if a density bonus is too generous, the town will likely have to absorb more market-rate units than are actually needed.  Our financial analysis can address that critical issue.
  • The more a municipality knows about the potential profitability of a project with alternative densities, the better equipped it will be to negotiate with a developer. 
  • Nassau Capital Advisors creates detailed financial models for inclusionary projects, using the same financial standards and formulas employed by developers.  Once models are prepared, the details and soundness of a plan can be analyzed and negotiated with more certainty and transparency.

Developing 100% Affordable Housing Projects

Many of our municipal clients have supplemented inclusionary zoning plan by supporting projects which are 100% affordable. This approach reduces the excess density requirements of inclusionary zoning projects.

Affordable housing trust funds can serve as matching capital, combined with low-income housing tax credits and low-interest, long term HUD financing, to fund 100% affordable units.  It’s being done now in scores of communities throughout the state.  Nassau Capital Advisors creates funding strategies to illustrate how this works, and assists in structuring the transactions.

Case Studies

Nassau Capital Advisors was retained by the Borough of Madison in 2021 to select an affordable housing developer to build and manage a 44-unit 100% affordable family project. The units will be part of the Borough’s Third Round Mt. Laurel affordable housing obligation.  We prepared and issued an RFP to leading developers, screened the responses, and assisted the Borough in selecting RPM Development Group of Montclair, NJ to undertake the project.

In 2020, the Borough of Englewood Cliffs retained our firm to conduct a similar RFP process to engage a developer for a 65-unit 100% affordable project to be built at the Municipal Complex on Hudson Terrace.  We collaborated with the Borough in selecting The Michaels Group, an experienced affordable housing developer based in Camden, NJ.  We collaborated with the Borough and developer in securing 9% low income housing tax credits to assist in funding the project, thereby minimizing the Borough’s financial contribution to the project.