Towns would allow housing at qualifying office parks and shopping centers

Developers could seek full or partial conversions of eligible commercial properties to housing and businesses. Office parks must contain at least 50,000 square feet. Shopping centers must contain, or previously have contained, a single retail space of at least 15,000 square feet. Properties must have at least 25% vacancy throughout the 18 months immediately before applying, or expenses at least 30% above revenue in each of the three years immediately before applying. Owners must also show continuous, good-faith efforts to fill vacancies, rent, or market the property throughout the 18 months immediately before applying. The property eligibility tests and general conversion requirement would start on the first day of the 13th month following enactment.

Eligible conversions meeting the zoning requirements would not need a use variance, meaning special permission to allow the proposed uses. Projects must include housing and at least one other use, exclude industrial uses, and reserve at least 20% of homes for very-low-, low-, or moderate-income households. Within each bedroom category, at least half of the reserved homes must serve low-income households. At least 13% of those low-income homes must serve very-low-income households. Reserved homes must follow the state's housing affordability rules. The permitted-use and affordable-housing requirements would take effect immediately upon enactment.

Towns would review eligible conversions using existing rules for housing and businesses or state fallback standards. Local mixed-use zoning rules could apply even outside those zones, but only rules adopted before enactment could be used under this provision. State officials would set standards for building density and size where towns lack mixed-use zones or the state finds existing rules unreasonably limit feasible redevelopment. Properties protected by a municipal historic preservation ordinance or listed on the New Jersey or National Register of Historic Places would need preservation commission review before approval. These zoning and approval rules would start on the first day of the seventh month following enactment.

Officials would have to reject conversions that fail the site's residential safety requirements. The restrictions cover unresolved contamination that threatens residential use, incompatible neighboring high-impact uses without protective measures, and substantial site risks that reasonable measures cannot address. For the substantial-site-risk test, highway proximity or existing zoning alone could not justify denial. A denial under that test must give specific facts backed by substantial evidence and explain why reasonable protective measures would be insufficient. These site-safety approval rules would start on the first day of the seventh month following enactment.