Newark, NJ Zoning Overlays & Bonuses: Density Bonus Law (2026)

Newark's Chapter 41:21, adopted November 1, 2023 by Ordinance No. 6PSF-E, mandates that any new residential, mixed-use, or substantial rehabilitation project of 15 or more residential units set aside 20% of its total units as income-restricted housing: 5% affordable to households at or below 40% of area median income (AMI), 5% at or below 60% AMI, and 10% at or below 80% AMI. In exchange, § 41:21-2(2)(a) grants a 15% residential density bonus to every project that complies with the chapter, with any fractional bonus unit rounded up to the next whole unit.

A. 40:55D-70d(5) does not receive the automatic bonus; the variance itself stands in as the compensatory benefit. Beyond the density bonus, the City's approving land use board may grant additional relief, including reduced setbacks, reduced lot coverage, increased floor area, and increased building height or stories, to help accommodate the added units. Projects may also seek expedited board review, waived planning and permit fees, and a 10 to 20% parking reduction where affordable units are included. Income-restricted units must be built on-site (off-site provision is prohibited), integrated among market-rate units, and a superintendent's unit cannot count toward the set-aside.

Developers may instead ask the Office of City Planning to approve a payment-in-lieu of $180,000 per required unit into the City's Affordable Housing Trust Fund, with 10% of that money spent within the ward where the project sits. Projects under 15 units, and Newark Housing Authority or nonprofit developments where at least half the units are low or moderate income, are exempt.