This bill establishes a process for exempting municipalities from certain fair share affordable housing obligations if they are designated as extensively flood-prone. The Commissioner of Community Affairs is tasked with determining these exemptions based on criteria such as flood insurance payments, the number of repetitive loss properties, and other relevant data. The bill mandates that the Commissioner, in consultation with the Commissioner of Environmental Protection, adopt necessary rules and regulations by the first day of the third month following the bill's enactment.

By providing this exemption, the bill aims to protect municipalities from potential legal actions that could compel them to construct affordable housing, thereby acknowledging the unique challenges posed by flood risks. The legislation modifies existing obligations under the Fair Housing Act, allowing for adjustments based on environmental factors, specifically flood risk, which could significantly impact a municipality's capacity to meet housing demands.