On Monday, April 21, 2025, Commissioner Jacquelyn Suárez of the New Jersey Department of Community Affairs (DCA) testified before the Assembly Budget Committee, outlining the department’s strategies to navigate projected funding changes while reaffirming its commitment to affordable housing, shared services, and homelessness prevention.
DCA plays a crucial role in enhancing communities and improving the quality of life for residents throughout the state. It oversees a broad range of programs that support local governments, affordable housing, neighborhood revitalization, disaster recovery, and economic development. Through technical assistance, financial support, and regulatory oversight, DCA helps municipalities deliver essential services, expand housing access, and implement cost-saving shared services. The department also administers key programs aimed at reducing homelessness, supporting low- and moderate-income families, and promoting equitable community growth.
Federal and State Funding Landscape
Commissioner Suárez acknowledged the challenges posed by both federal instability and reductions in state-level appropriations. The Governor’s FY 2026 budget recommends $1.86 billion in total appropriations for DCA—a decrease of $243 million, or 11.5 percent, from FY 2025. Despite this, Suárez emphasized the department’s proactive approach to reviewing internal programs, optimizing operational efficiency, and shielding core services from disruption. Notably, the department continues to face significant staffing gaps, with 365 positions currently vacant across funding sources.
The commissioner reiterated DCA’s commitment to maintaining high performance in grant distribution and processing, even as the department prepares for lower federal revenues and navigates staffing shortages. Notable federal increases include $10 million for the Section 8 Housing Choice Voucher Program, $2.5 million for legal services for low-income tenants, and $14 million for energy efficiency initiatives under the Division of Codes and Standards.
NJHOMES and Trust Fund Strategy
Commissioner Suárez introduced the New Jersey Housing Opportunities for Municipal Equity and Success (NJHOMES) initiative, which will equip municipalities with tools and technical support to promote affordable housing development. While DCA has allocated $129 million in Affordable Housing Trust Fund awards since the start of the Murphy administration, the Governor’s FY 2026 budget anticipates $114.5 million in expenditures from the trust fund—outpacing revenues for the second consecutive year as the department begins to draw down pandemic-era surpluses.
In a related change, the Governor’s budget proposes eliminating the $15 million General Fund appropriation for the Down Payment Assistance Fund, instead utilizing $40 million from the off-budget Affordable Housing Trust Fund to continue the Down Payment and Closing Cost Assistance Program.
Bringing Veterans Home Initiative
The Bringing Veterans Home initiative, launched in late 2024, remains a central focus. Backed by $30 million in state and federal funding, this interagency program seeks to end veteran homelessness in New Jersey by July 1, 2026. Key efforts include maintaining a real-time, statewide by-name list of unhoused veterans, coordinating regional hubs, and expanding rental assistance programs.
Local Government Efficiency and Consolidation
The Local Assistance Bureau continues to promote shared services agreements statewide, which now total more than 4,000 and have yielded more than $280 million in cost savings since 2018. The Local Efficiency Achievement Program has awarded more than $18 million across 120 grants, and the School Regionalization Efficiency Program has issued nearly $1 million in planning grants. The Governor’s FY 2026 budget recommends increasing funding for local government consolidation demonstration projects from $15 million to $20 million and expanding eligibility to specific county youth detention centers.
Atlantic City Revitalization
The DCA reaffirmed its 2025 commitment to Atlantic City through a coordinated effort focused on reducing homelessness, stimulating economic development, and strengthening public safety. This includes reviewing tax abatement strategies, redeveloping Renaissance Plaza for community services, and increasing police staffing under a new public safety director.
Lead Remediation and Workforce Development
DCA has fully obligated $180 million under the Lead Remediation and Abatement Program, aiming to treat approximately 7,200 housing units—nearly 12 times the number treated between 2015 and 2020. On the workforce front, DCA is addressing staffing shortages through internships and career fairs hosted in partnership with the New Jersey League of Municipalities, aiming to bolster recruitment in local government finance and administration.
Legislative Appropriations
In line with broader fiscal tightening, the Governor’s FY 2026 Budget proposes significant cuts to legislature-added appropriations. This includes:
- A reduction of $47.6 million in grants to not-for-profit social service programs
- An $84.9 million cut in state aid for local government initiatives
- An 89.4 percent decrease in discretionary grants to not-for-profits and full elimination ($36.5 million) of state aid to some local governments
These adjustments are framed as consistent with the executive’s general budget policy and aim to prioritize long-term fiscal sustainability.
Workforce Housing
Commissioner Suárez highlighted several major housing initiatives aimed at addressing affordability across all income levels in New Jersey. In addition to launching the NJHOMES initiative on April 25, DCA continues to support workforce housing for middle-income residents through targeted funding and zoning strategies.
Under the Workforce Housing Program (WHP)—funded through a $50 million allocation from the state’s federal Coronavirus State Fiscal Recovery Fund—the New Jersey Housing and Mortgage Finance Agency (NJHMFA) has committed $26.7 million to four qualifying projects that will deliver a combined 446 housing units. These include:
- BayFront Promenade—Phase I, Jersey City (Hudson County)—105 units
- BayFront Promenade—Phase II, Jersey City (Hudson County)—105 units
- 150–170 South Broad Street, Trenton (Mercer County)—120 units
- South Brunswick Mixed Income Project, South Brunswick Township (Middlesex County)—116 units
Of the total units, 178 are deed-restricted for middle-income families (earning 80–120 percent of area median income), 186 are for low-to-moderate-income families, and 82 will be leased at market rate. The WHP specifically targets developments located either in municipalities with a jobs-to-housing ratio of 1.2 or higher or within 0.5 miles of a publicly operated transit stop.
While these four projects received direct WHP funding, the total investment in WHP-eligible projects—including those that opted for other NJHMFA subsidy programs like the Affordable Housing Production Fund and the Low-Income Housing Tax Credit—approaches $47 million. NJHMFA has identified two shovel-ready projects and as many as five additional WHP proposals that could move forward with additional, flexible funding.
Urban Enterprise Zones
DCA continues to advance the revitalization of New Jersey’s Urban Enterprise Zone (UEZ) Program, guided by the reforms enacted under P.L. 2021, c.197. These changes established a new structure for producing Five-Year Zone Development Plans, and they created a revised Zone Assistance Fund formula, enabling municipalities to request up to 10 percent—or a minimum of $125,000—of their fund allocation to support planning activities.
As of FY 2025, the UEZ Program has received 26 requests from partner municipalities to initiate Preliminary Zone Development Plans, with 16 communities securing planning funds. Nine municipalities—including Jersey City, Bridgeton, Carteret, Kearny, Wildwoods, Passaic, Lakewood, Mount Holly, and Vineland/Millville—have formally approved plans, while several others have submitted drafts for review. Some municipalities, such as Bridgeton and Lakewood, opted to self-fund their planning efforts. The UEZ Authority has also approved project-level funding for communities with finalized plans, such as Lakewood, which received more than $2.9 million for administration, infrastructure, and small-business loan programs, and Passaic, which secured nearly $1 million for workforce training, surveillance, and road improvement projects. These developments signal strong municipal engagement and mark continued progress in restoring the UEZ Program as a tool for local economic growth.
Conclusion
Commissioner Suárez’s testimony outlined DCA’s current strategies in response to fiscal constraints and shifting funding landscapes. Initiatives discussed included efforts to increase access to affordable and workforce housing, revitalize UEZs, and address veteran homelessness. The department has also highlighted its focus on operational efficiency, interagency collaboration, and policy solutions. Amid ongoing budget and staffing challenges, DCA presented its priorities for the upcoming fiscal year, emphasizing a continued approach to community development and financial management.
Please contact a member of the McCarter & English Government Affairs team with any questions or to learn more about the DCA’s FY 2026 budget proposal.