New Jersey is the most densely populated state in the country, with nearly 1,300 residents per square mile, according to the 2024 Census. Four New Jersey municipalities—Guttenberg, West New York, Union City, and Hoboken—are denser than New York City. Between 1986 and 2015, the percentage of developed land in New Jersey jumped from 22% to 27%, while the percentage of forests declined from 49% to 43% and farmland decreased from 14% to 10%. On average, the Garden State develops approximately 34 acres of farmland, forests, and wetlands per day. Meanwhile, New Jersey has the sixth-highest median home price, at $548,000, and rents average $2,078 per month. Accessory dwelling units (ADUs) can provide an alternative to traditional housing, helping to remediate both the housing shortage and the affordability issues in New Jersey, while preserving rural land from development. ADUs, which can range from a 400-square-foot tiny home to a 1,200-square-foot cottage, are additional living spaces built on lots with existing single- or two-family dwellings.
California, Oregon, Massachusetts, and many more states have legalized ADUs by right, meaning that a builder does not need to seek legislative approval to build an ADU. The purpose of this legislation is to bolster the supply of housing, promote variety in housing types, address the shortage of housing for the elderly, single people, and persons with disabilities, and encourage the sustainable use of already developed land. In New Jersey, municipalities such as South Orange, Montclair, and Asbury Park have passed ADU-enabling legislation in response to housing market pressures. Princeton, for example, allows accessory dwelling units in all residential zones by right. Many of these laws also require the property owner to reside in either the accessory or primary unit.
While some municipalities have enacted laws regarding ADUs, New Jersey has not yet adopted statewide regulations. Legislation governing the construction and regulation of accessory dwelling units was introduced in 2022 and passed by the Assembly Housing Committee in February 2025. The bill, A2792, permits building ADUs in residential areas zoned for single-family and two-family residential lots and requires the adoption of municipal ordinances regulating accessory dwelling units. This regulation sets a statewide focus on increasing housing supply by prohibiting municipal regulations that restrict ADU construction.
Bill A2792 defines accessory dwelling units as a tool to expand housing supply, plan effectively, and address environmental concerns. The legislation requires municipalities to adopt one of two ordinance frameworks. Both pathways mandate that ADUs be permitted by right in single and two-family zones, either the primary or accessory unit must be occupied by the owner of the lot, and municipalities and other governing bodies are prohibited from regulating ADUs more than primary housing is regulated. The two ordinances options differ on parking, design, and lot size restrictions, allowing flexibility for municipal discretion. Municipalities, homeowner associations, and other governing bodies that attempt to impede ADU construction are subject to review by the Department of Community Affairs (DCA). DCA serves as an arbiter between the landowner and the governing body, determining whether local regulations violate state law.
Accessory dwelling units have exploded as a housing option in states like California. In 2022, over 15,000 ADUs were built in California, representing 19% of all housing units built that year. ADUs have been shown to reduce the price of nearby homes by adding supply to the market. New Jersey lawmakers have been seeking to pass similar legislation as a tool to address the lack of housing. Bill A2792 would provide municipalities with a framework to implement ADU ordinances and enforce compliance with a statewide initiative to address shrinking developable land and increase the supply of affordable housing.
References:
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Oregon Department of Land Conservation and Development (2019, September). The Accessory Dwelling Units (ADU) Requirement, Under Senate Bill 1051, Updated to Include HB 2001 (2019). Retrieved 2026, January 16, from Oregon Senate https://www.oregon.gov/lcd/Publications/ADU_Guidance_updatedSept2019.pdf
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