Montgomery’s 30-Year Extension Plan Leaves Long-Time Affordable Homeowners Without the Equity They Expected

Within the context of NJ’s affordable housing Universe (generally speaking )- a deed restriction is a promise that follows the home when families buy an AH unit. In getting a home families agree to…

-live in the home as their primary residence

-sell the home under a price cap so the next family can afford it as well

The rules are written into the deed and recorded with the county, stay in place for decades and apply to every new buyer until the restriction expires. Again, it’s on the property itself – independent of who owns it.

The end of that period is a big deal for homeowners because it’s the moment when they can finally sell their home like anyone else, build equity, move closer to family or plan for retirement.

The restriction is meant to protect affordability while still giving families a pathway to stability and eventually financial mobility.

Montgomery Township has become a clear example in New Jersey of how municipalities are trying to meet the state’s new affordable housing requirements by extending deed restricted affordability controls on long-time homeowners versus new construction.  Based on documents from the township and emails from affected residents it becomes apparent that this is a deliberate strategy built into Montgomery’s Round 4 Affordable Housing plan.

Residents first learned of the extension through notices and a follow-up email from the Township on November 20 – informing homeowners who are reaching the end of their original 30-year control period that the restrictions would be extended another 30 years.  This extension would occur regardless of whether they sign the new agreement or accept the Township’s offered $10,000 payment and regardless of what homeowners decide “the controls will be extended automatically”. Refusal to sign the agreement only means the $10,000 would instead be offered to the next purchaser of the unit.

The Township linked its authority to the original Deed and Affordable Housing Agreement associated with each unit and pointed homeowners to the sections in those documents as well as to the state’s Uniform Housing Affordability Controls.

N.J.A.C. 5:80-26.26 states that municipalities “have the right” to extend controls beyond the original affordability period. The rule also requires that when a town exercises this option it must either purchase the unit or contribute at least $10,000 per unit from its affordable housing trust fund. That regulation further requires the extension be no less than 30 years.

Montgomery stands out because the Township has already described this approach as a formal strategy for meeting its state mandated Round 4 obligations. In its document “Round Four Housing Process Explained” Montgomery tells residents that its municipal planner presented several options that could reduce the number of new units the Township would otherwise have to build – among them was the extension of expiring controls on existing units. The Township argued that this approach would “further reduce the number of new units required.”

And it’s happening.

The agenda for the Township Committee’s December 4 meeting includes Ordinance 25-1766, a bond ordinance dedicated to funding the extension of affordability controls. The ordinance appropriates $1,100,000 including $650,000 from the Township’s COAH fund to support the program. The amount aligns with the $10,000 per unit minimum set by state regulation and confirms that the Township is formalizing the extension program through legislation using affordable housing trust fund dollars as required.

For homeowners the impact is significant and painful. Many families purchased their homes with the understanding that affordability restrictions lasted 30 years and that once they completed that term they would be able to sell on the open market and retain the equity they built. Now they are being told that the restriction period is being renewed for another 30 years without their consent, with or without the incentive payment. Some residents say they feel caught between the Township, the administrative agent CGP&H and their HOA. Others say they have received messages they interpret as pressure or warnings about compliance and fines.

From a policy perspective Montgomery illustrates a tension inside New Jersey’s affordable housing system. After Governor Murphy signed P.L. 2024 c.2 in March 2024 towns entered a structured schedule for meeting their 2025 to 2035 affordable housing obligations. That law abolished COAH, created the new Dispute Resolution Program and set firm timelines for towns to maintain compliance. Montgomery’s planning documents show that extending expiring controls is one of the tools it is relying upon to reduce the number of new units required.

New Jersey faces hard questions on how municipalities will meet their obligations under the state’s new affordable housing law. Montgomery shows how towns can use extensions on long-time affordable homeowners as a way to reduce the number of new units they need to create. If more towns follow the same path – the state could see fewer affordable homes go up and a growing dependence on older deed-restricted units that were never meant to stay restricted for 60 years.

This would shift the burden of compliance onto families who already completed decades in the program while, at time same time, potentially reducing overall availability of affordable housing units.

For homeowners the renewal of controls means the benefits they expected at the end of their 30-year commitments, including equity growth and the freedom to sell without restriction, are deferred for another generation. Some say they believed the program would provide long-term stability followed by financial mobility. They now feel the program is evolving into something that differs from the original understanding.

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