Establishes certain State funding preferences for municipalities that enhance opportunities to develop housing.

Changed the qualifying standard from 'thereby increased the number of housing units permitted for development' to 'reasonably increased the rate of housing units permitted for development' throughout the bill. This is a lower and more flexible threshold that does not require a specific count of additional units, but rather a reasonable increase in the rate at which units are permitted.

Added a new section requiring the Commissioner of Community Affairs and Commissioner of Transportation to submit a report to the Legislature and Governor no later than four years after enactment, recommending whether to continue existing priorities or propose new ones.

Added a sunset provision stating that the bill's provisions shall expire five years from the date of enactment.

In the school facilities aid section (C.18A:7G-15), added language establishing that the district aid percentage 'shall not be less than 44 percent' as a floor, and made the increase subject to availability of new funding from State or federal appropriations or voter-approved school construction bonds.

Added a time limit on the district aid percentage increase for housing strategy municipalities, tying it to the expiration date in the new sunset section.

Removed the old Section 4 which amended C.18A:7G-9 (state debt service aid for capital investment in school facilities). This entire provision was deleted from the bill.

Added a new Section 4 amending C.18A:7G-13, which addresses the financing authority's and development authority's responsibilities for SDA district projects. It includes a provision allowing the State share to be increased by up to 10 percent for municipalities that have adopted housing strategies and reasonably increased the rate of housing units permitted, subject to funding availability.

Added Senator Raj Mukherji (District 32, Hudson) as a sponsor and added Assembly members Rowan, Carter, Calabrese, Haider, Sampson, and Brennan as co-sponsors, broadening the bill's legislative support base.

In the Transportation Trust Fund section (Section 3), removed the reference to prioritization 'within the schedule of all other criteria' under C.27:1B-25 and replaced it with a requirement that the preference be established 'in conformance with the criteria established by the Department of Community Affairs pursuant to section 2.' This ties transportation fund preferences more directly to DCA's housing strategy criteria.