As developers contemplate a slowing housing market, NIMBY-ism continues to trump sound, constitutionally-mandated land use policy and New Jersey refocuses on its lack of affordable housing, will Mt. Laurel suits be on the rise? While the Appellate Division in In the Matter of the Adoption of N.J.A.C. 5:94 and 5:95 by the New Jersey Council on Affordable Housing, provided for a stay on builder’s remedy lawsuits against municipalities “whose application for substantive certification is affected by the decision,” the stay apparently does not apply to municipalities who did not have substantive certification of a second round plan and who failed to file an application for substantive certification under the invalidated third round regulations.
Thus, given that many municipalities failed to obtain substantive certification of a second round plan or file an application for the third round, it is a question worth pondering given the dynamics of an economic slowdown coupled with newly-introduced regulations from the Council on Affordable Housing (“COAH”) designed to implement the “third round” obligations of municipalities to provide constitutionally-mandated affordable housing which impose onerous requirements such as one affordable unit for every four newly-constructed market rate units.
The proposed regulations require a substantially greater contribution toward affordable housing by municipalities, particularly growing suburban and rural communities around the state, in contrast to the prior version of the third round rules. Municipalities were informed of the key provisions of the new regulations and encouraged to adopt inclusionary zoning ordinances in a letter from COAH on December 24, 2007.
Two recent media reports involving municipalities in Union County, Roselle Park and Cranford - both communities which did not receive substantive certification of fair share affordable housing plans from COAH, which allows developers to proceed directly to litigation in Superior Court following good faith negotiations with the municipality rather than through an administrative proceeding before COAH – demonstrate that developers may be less willing to negotiate over an extended period of time in an uncertain market and will not be shy about using litigation to implement development plans which include an affordable housing component but which are alleged to be improperly denied or interminably delayed in the municipal review process.
While both cases involve similar claims by the plaintiff-developers that the municipalities have not complied with the mandate under the New Jersey Constitution to provide affordable housing and both involve designated redevelopment areas with adopted redevelopment plans, the cases appear to be about the form and density of the affordable housing provided as opposed to examples of deliberate exclusion. Based upon media reports, the issue in the Roselle Park litigation seems to be over a disagreement with the type of housing. The Borough’s plan contemplates for sale condominiums and retail uses for a former industrial site while the developer wants to built “luxury” apartments.
In Cranford, the developer apparently worked with the municipality to develop a redevelopment plan and originally agreed upon a number of units which included a density bonus for “green” construction, but has attempted to renegotiate the terms of the plan based upon economic and market conditions.
While the Roselle Park case has proceeded past the initial motion phase and the court had referred the case to mediation, it appears that, based upon media reports, the municipality is firmly committed to fighting for its development plan.
In Cranford, undoubtedly, the first round of motions will deal with whether good faith negotiations ensued before the developer filed suit. If the court finds that such negotiations took place, the Township may be in for a long and costly battle, given the fact that, following the promulgation of the third-round rules in 2004, the governing body never applied for substantive certification of a third round plan or enacted an approved growth share ordinance.
In an an environment where elected officials must balance their obligations to comply with the Fair Housing Act and the Mount Laurel I and Mount Laurel II mandates with the pressures of overzealous NIMBYs who use tactics like anonymous flyers or blog entries that warn their neighbors of “Section 8 housing” and rail against “our community” losing its “small town charm” and turning into “Elizabeth, Newark or Camden” while adding to the burden on schools, traffic, flooding and what ever other parade of horribles they can use to stoke the fears of suburban homeowners, it is no wonder that communities may now have to brace themselves for an uptick in Mt. Laurel litigation, brought on by a perfect storm of a slumping real estate market and a pattern of either indifference to or willful avoidance of constitutional mandates combined with political pandering to vocal anti-development groups.
For more information on Mt. Laurel litigation, the newly-proposed third-round COAH regulations or affordable housing issues in general, feel free to contact us at pmorin@saul.com
