New Jersey Assembly Bill A3365

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24
• Refer: 1/29/24
• Report Pass: 2/8/24

Caption

Allows taxpayers to utilize alternative method of depreciation of certain expenditures in connection with construction of new affordable housing developments.

Impact

The bill amends existing laws under the Corporation Business Tax Act and the New Jersey Gross Income Tax Act, intending to encourage the construction of affordable housing projects. Specifically, it provides a formula for calculating depreciation based on the proportion of affordable units within a development. As a result, developers could find it more attractive to proceed with projects that might have previously been economically unfeasible, thereby easing the housing crisis and contributing positively to the economy.

Summary

Assembly Bill A3365 seeks to enhance the development of affordable housing in New Jersey by allowing taxpayers to utilize an alternative method of depreciation for expenditures related to the construction of new affordable housing developments. This legislation aims to create a more favorable tax environment for developers, making it financially viable to increase the supply of affordable housing. By permitting depreciation over a ten-year period for eligible property expenditures, the bill looks to stimulate investment in housing that serves households earning no more than 80 percent of the regional median income.

Sentiment

Overall, the sentiment surrounding A3365 appears to be supportive among various stakeholders, including housing advocates and developers who argue that this bill provides necessary incentives to build more affordable units in a market that is increasingly inaccessible to lower-income residents. However, there may also be concerns regarding the effectiveness of tax incentives and whether they are sufficient to address the broader issues of housing affordability and availability.

Contention

Some points of contention may arise concerning the definitions of what constitutes affordable housing and the administrative aspects of implementing the depreciation rules as outlined in the bill. Stakeholders may debate the potential for tax benefits being misused or whether developers might take advantage of these provisions without genuinely contributing to the affordable housing agenda. Therefore, robust monitoring and regulatory frameworks will be essential to ensure that the intended benefits are realized.