"Yes In God's Backyard Act"; Enhances ability of religious and nonprofit organizations to convert certain property to inclusionary developments with affordable housing; authorizes bonds for $250 million; appropriates $50 million.*

Authorizes the New Jersey Housing and Mortgage Finance Agency to issue up to $250 million in revenue bonds and appropriates $50 million from the General Fund (at $10 million per year over five years) to a new 'Faith and Nonprofit Housing Development Assistance Program Fund.'

Establishes tier-specific financing: Tier 2 projects get subordinate gap financing up to $100,000 per income-restricted unit; Tier 3 projects get gap financing up to $200,000 per unit plus priority access to 4% Low-Income Housing Tax Credit allocations and scoring preferences for 9% LIHTC equivalent to court-approved settlement agreements.

Creates a pre-development assistance program providing grants up to $250,000 per project and forgivable loans up to $750,000 per project for environmental assessments, geotechnical work, architectural pre-design, legal fees, and municipal application fees.

Provides that municipalities receive fair share credits and bonus credits toward their affordable housing obligation for income-restricted units produced under this act, counted in the round following completion and recording of the affordability covenant.

Introduces a three-tier system: Tier 1 requires at least 20% income-restricted units with 40 units/acre density and 1 story height bonus; Tier 2 requires at least 35% with 60 units/acre and 2 stories; Tier 3 requires at least 50% with 80 units/acre and 3 stories. Higher tiers unlock progressively more generous financing.

The definition of 'eligible property' was tightened to require that the property be connected to public water and sewer, not an environmentally protected area (wetlands, flood hazard areas, category one buffers, Highlands or Pinelands preservation areas, preserved farmland, deed-restricted open space, or undeveloped contiguous forested areas of 5+ acres), and either already developed, previously disturbed, or in a smart growth area.

Adds displacement protections: if existing residential units or community-serving uses are on the property at application, replacement units must be provided in addition to the minimum 20% requirement; displaced households get right of first return at CPI-adjusted prices with 180-day advance notice and relocation assistance; community-serving uses must be retained or relocated within one mile with no more than 90 days service interruption.

Adds anti-discrimination conditions: income-restricted units cannot be limited to members or congregants of the sponsoring religious organization, must comply with the Law Against Discrimination and federal Fair Housing Act, and any tenancy preference for organizational members is prohibited. Also requires 36 months of ownership before applying (with exceptions for donation, bequest, merger, or successor in interest) and a sworn disclosure of all beneficial owners and equity holders with 10% or more interest.

Adds parking caps: maximum 0.5 off-street spaces per income-restricted unit and 1.0 per market-rate unit (or 0.25 and 0.5 if near transit); existing parking for religious or nonprofit use may be reduced or eliminated; municipalities cannot require physical separation of parking between the development and the religious/nonprofit use.

Adds a right of first refusal for the agency (or a designated qualified entity) to acquire the property after the affordability period expires, as a condition of the application, to preserve it as affordable housing. This is recorded in the deed restriction.

Adds municipal review protections: applications must be reviewed for completeness within 45 days; municipalities cannot impose inflated engineering escrow fees or off-tract improvement requirements not roughly proportional to demonstrated impact. Also adds an expedited dispute resolution pathway through the Affordable Housing Dispute Resolution Program that must conclude within 90 days.

Adds a provision preserving municipal environmental ordinances adopted under the Highlands Water Protection and Planning Act where the municipality has a certified plan conformance petition, preventing this act from preempting those local protections.