Key Provisions of COAH’s Third Round Rules Invalidated
Posted by Phil Morin on February 6, 2007
On January 25, 2007, the Appellate Division invalidated key provisions of the Council on Affordable Housing’s (“COAH”) Third Round affordable housing regulations in its decision In the Matter of the Adoption of N.J.A.C. 5:94 and 5:95 by the New Jersey Council on Affordable Housing.
COAH has six months to revise its Third Round Regulations in accordance with the decision. The Appellate Division stayed applications for substantive certification and the filing of builder’s remedy actions against any municipality whose application for substantive certification were affected by the decision.
Key aspects of the decision include
- The Appellate Division invalidated N.J.A.C. 5:94-4.4(c), which requires developers to provide a “payment in lieu fee” for affordable housing.
- COAH must adopt specific standards and guidelines for developers and municipalities to calculate affordable housing fees. A “rational nexus” must exist between the fees and the housing need. Therefore, municipalities may no longer pass through affordable housing obligations onto developers without any corresponding benefits.
- The “growth share” approach, as currently utilized by COAH, was deemed inconsistent with the Mt. Laurel doctrine.
- COAH’s approach to calculating job growth was deemed invalid because it can no longer exclude the creation of new jobs resulting from the rehabilitation of vacant properties and cannot rely solely on the size of new non-residential development.
- Municipalities can no longer satisfy up to 50% of their growth share obligation through age-restricted housing.
- The Appellate Division also remanded the issue of whether COAH can utilize “filtering” and the State Plan’s growth projections when determining the State’s overall affordable housing needs.
- The Appellate Division’s decision affirmed COAH’s decision to no longer reallocate present need. Other features of the Third Round rules that were upheld include the validity of Regional Contribution Agreements (“RCAs”), and COAH’s regulations awarding credits, bonus credits and vacant land adjustments.
The impact of In the Matter of the Adoption of N.J.A.C. 5:94 and 5:95 by the New Jersey Council on Affordable Housing has yet to be fully determined. It is clear, however, that the decision will impact development applications already approved under the municipal growth share ordinances, as well as pending development applications and those developments still in the design phase.
