Newark officials outline $40,000 ADU assistance program using HUD funds amid concerns about income thresholds and parking

Deputy mayor Allison Ladd presented an accessory dwelling unit (ADU) assistance program at the Newark Municipal Council premeeting on July 14, saying the city plans to use competitively awarded HUD "pro housing" funds to help homeowners build legal, affordable ADUs.

"What we were doing is designing a program using funding, which is these dollars we received competitively from HUD a few years back called pro housing," Ladd said, and added the city’s goal is that units funded through the program have affordability requirements recorded against the property.

The program would offer up to $40,000 per homeowner to create a compliant ADU, Ladd said, and she emphasized the policy is not intended to legalize existing illegal ADUs. "The illegal ADUs should not exist," she said, adding the city has closed some units in the past. Applications will go to the planning and zoning office and require central planning board review; if a site is in a historic district, landmarks review is also required.

Council members raised a series of concerns: whether the program’s income thresholds match Newark residents’ earnings, parking impacts for added units, limits on the available funding and how the city will ensure construction quality. Ladd said the city received about $4,000,000 competitively several years ago and that only a portion would be allocated to the ADU program, so funds are limited.

On income definitions, Ladd said the administration is preparing legislation to redefine AMI (area median income) for program purposes and noted the difference between county and city medians. She told the council that Essex County median income figures are significantly higher than Newark’s; she also cited a Newark median of about $58,000 based on the most recent census and said the mayor supports tailoring income standards to Newark.

On parking, Ladd said an ADU cannot be built without an additional on-site parking space: "You cannot build an ADU without an additional parking space," she said, and noted any modification to site plans that adds a driveway or parking would be subject to review.

Councilwoman Jackson asked whether the city had assessed the true cost of building a legal ADU (including design, permitting and sewer connection) and urged the administration to provide a clear public message distinguishing eligible new ADUs from those built illegally. Ladd acknowledged the city has not completed a cost analysis but said staff can perform one and will provide more detailed program materials and the slide deck shared in community meetings.

Next steps: Ladd said the mayor will work with staff to prepare legislation that would be introduced to council; the administration will provide the slide deck and program details to council members and the public, and the council will consider the ordinance in a future meeting.