Passaic, NJ Accessory Structures: ADU Rental Restrictions (2026)

Any accessory dwelling unit approved under § 317-16G comes bundled with an affordability covenant, not just the dimensional standards addressed elsewhere in the same section. Subsection (9) requires a deed restriction running for twenty years, during which two separate HUD benchmarks control the unit: tenants who occupy the ADU cannot exceed HUD's maximum income limits, and the rent the owner charges cannot exceed HUD's published rental limits, both of which are recalculated annually rather than fixed at the time of approval. Because the restriction is recorded against the deed, it runs with the land, the twenty-year clock does not reset and the income and rent caps do not lapse if the property changes owners during that period.

The ADU also has to remain in exclusively residential use under § 317-16G(8), so an owner cannot convert the deed-restricted unit to a short-term rental, office, or storage use to escape the income and rent caps. The Planning Board's conditional-use approval under § 317-15 is the point at which this deed restriction is imposed, so an applicant needs the affordability covenant drafted and ready before the Board will sign off, and the administrative officer will not issue the zoning permit under § 317-63 for a unit that lacks the recorded restriction.