STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblyman ANTHONY S. VERRELLI
District 15 (Hunterdon and Mercer)
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
Assemblywoman SADAF F. JAFFER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Co-Sponsored by:
Assemblywoman Jasey, Assemblyman Atkins and Assemblywoman McKnight
SYNOPSIS
Establishes guidelines for creditworthiness determinations concerning affordable housing programs.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act establishing creditworthiness analysis guidelines for affordable housing and supplementing P.L.1945, c.169 (C.10:5-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. The current shortage of affordable housing in this State has forced many low and moderate income New Jersey residents to live in market rate housing they cannot afford but must occupy rather than face homelessness.
b. After paying rent, these struggling families and individuals are frequently left with less money than needed to meet other basic household obligations. Late or partial payments, as well as missed payments made up in subsequent months, are often the result.
c. These undesirable but unavoidable decisions negatively affect many households credit reports and inevitably lead to lower-credit scores for these New Jersey residents.
d. Access to housing with affordable rents would remedy a major cause of the financial difficulties experienced by lower-income persons, leave them with more income to meet their basic expenses, and help them to restore their credit standing.
e. Those households fortunate enough to obtain tenant-based housing subsidies, or access to cost-controlled housing units, generally after years spent on waiting lists, are often rejected by landlords based upon inadequate credit assessments.
f. These credit assessments overlook the totality of the circumstances that confronted the particular family or individual in question, fail to recognize that the credit issues are generated by the very problem that affordable housing would resolve, disregard the limited choices available to affected households, and discount their best efforts to deal with those challenges.
g. Available reports, studies and data demonstrate that, because of past and present discriminatory practices, and the persistence of structural and intentional racism, unregulated and unlimited use of tenant screening criteria, including those such as credit scores and reports, and other forms of credit analysis, have disparately impacted African-Americans, other people of color, the disabled, and other protected classes, and have also been used as a pretext to accomplish otherwise prohibited discrimination against members of those classes.
h. It is in the interest of the public to ensure that low- and moderate-income persons are not unfairly denied the opportunity to obtain housing they can afford and desperately need.
i. It is also in the public interest to establish, in relation to housing subsidy and affordable housing programs, fair and just standards and guidelines for credit evaluation and the use of credit scores, credit reports, and related assessments of creditworthiness or fitness to be a tenant.
2. For the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill):
Ability to pay rent means:
a. for federal, State or local voucher holders, or applicants for project-based deep subsidy units, that the gross monthly household income of the affordable housing applicant is equal to or exceeds 2.5 times the share or portion of the total monthly rent that the tenant shall be required to pay; multipliers based upon the total rent for the dwelling unit, including both the tenants share of the rent and the subsidized portion of the rent, shall not be permitted; and
b. for all other dwelling units limited to occupancy by low or moderate income households, that the gross monthly household income of the affordable housing applicant is equal to or exceeds 2 times the amount of the monthly rent the household will be required to pay; provided, however, that the required amount of income needed if the applicant is certified as income eligible for a particular dwelling unit pursuant to the applicable provisions of the Uniform Housing Affordability Controls promulgated by the New Jersey Housing and Mortgage Finance Agency shall be in accordance with those provisions, or, in the case of an applicant with a disability, shall be the amount required in order to provide a reasonable accommodation pursuant to the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.), the federal "Fair Housing Amendments Act of 1988," (42 U.S.C. s.3601 et seq.) or other applicable statute or regulation.
Affordable housing applicant means a low or moderate income household that possesses a State or federal tenant-based housing subsidy; or a household that applies to lease any rental dwelling unit that is restricted to occupancy by low or moderate income households pursuant to any State or federal affordable housing or subsidy program, including but not limited to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), and any low or moderate income housing mandated pursuant to a court order or settlement.
Credit or other risk score or assessment means a number or other form of rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information, court records or similar data, and which purports to characterize or categorize a persons creditworthiness, fitness to be a tenant, or other position or status. The term includes but is not limited to FICO or other credit scores, tenant scores, insurance scores or other enumerations. The term also includes the use of generic events or occurrences, such as a filing or discharge in bankruptcy, or being a named party in a court proceeding, as justification for denying a person credit or admission to an apartment or other rental dwelling.
Creditworthiness means the determination of a landlord or creditor, in accordance with section 4 or 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), with regard to a prospective tenants fitness to be a tenant or resident of a particular housing complex or dwelling unit.
Deep rental subsidy means a State or federal tenant-based housing subsidy, or State or federal project-based housing subsidy, which limits the tenants share of the rental payment to a percentage of the tenants income, and which can be adjusted to maintain that percentage should the tenants income change.
Low or moderate income household means a household meeting the applicable State or federal definition of such households for the particular housing program or housing units in question.<