Posted by: Patricia Salkin | January 24, 2011

NJ Appeals Court Invalidates Revised “Third Round” of Council on Affordable Housing “Fair Share” Rules and NJ Assembly Passes Bill to Abolish COAH Which is Expected to be Vetoed

The Fair Housing Act (N.J.S. 52:27D-301) authorizes the Council on Affordable Housing (COAH) to determine the affordable housing obligations of municipalities and develop mechanisms for meeting those obligations. If COAH certifies a plan, the municipality is granted substantial protection from exclusionary zoning suits. COAH previously established first-round (1987–1993) and second-round (1993–1999) rules. In 2007, the appellate court invalidated substantial portions of third-round rules intended for the period 1999–2018 and remanded. Following COAH’s revision, the court again invalidated substantial portions of the rules and directed COAH to adopt new rules within five months. The court noted COAH’s “lengthy” delays, payment of nearly $2 million to consultants, and pending legislation that may abolish COAH and transfer its responsibilities to the Department of Community Affairs.

The court addressed 22 challenges. Invalidating COAH’s use of “growth share” methodology that would use information about vacant land to allocate responsibility for prospective need for affordable housing, the court stated that COAH should return to a previously approved methodology based on regional need. Failing to provide a specific numerical obligation allows municipalities to adopt plans and zoning that retard growth and to avoid substantial responsibility for satisfying their obligations. There must be a new determination of statewide and regional prospective needs, according to the court, using previously approved methods.

Based on the invalidity of the methodology, the court also invalidated a rule authorizing certification of compliance plans that relied on municipal-sponsored affordable housing projects. Rules establishing presumptive densities and set-asides did not provide adequate incentives for developers to construct inclusionary development. The legislature has expressly recognized the need for incentives and the presumptive densities do not necessarily exceed densities already permitted. The court also invalidated rules that allowed rental bonus credits for units approved as part of prior round obligations that have not actually been constructed. Rules that authorized “compliance” bonuses for developments approved during the 2004–2008 interim period are invalid.

The court upheld COAH’s determination of prior round affordable housing obligations as the basis for determining third-round obligations as well as rules that authorize “smart growth” (transit-oriented) and redevelopment bonuses. COAH’s decision not to reallocate present need for affordable housing in urban municipalities to other municipalities was valid and did not unfairly burden inner cities. Rejecting an argument that the third-round rules improperly required expenditure of municipal revenue to satisfy affordable housing obligations, the court noted that municipalities may voluntarily spend for affordable housing and that municipalities may petition for adjustment of their obligations if they lack land or water or sewer capacity for development. The third-round rules were adopted in compliance with the state’s administrative procedure act.

In the Matter of the Adoption of N.J.A.C. 5:96 and 5:97 by the N.J. Council on Affordable Housing, 2010 WL 4027722 (NJ App.10/08/2010)

The opinion can be accessed at: http://www.njba.org/siteimages/file/legislative/COAHa5382-07a5404-07etal.pdf

This abstract appears in the Jan. 2011 issue of Planning and Environmental Law published by the American Planning Association.

Meanwhile, the NJ Assembly just passed a bill that would abolish COAH and reduce the fair share obligations of many municipalities. Gov. Christie, who supported the version approved by the state senate in June, is expected to veto the bill in the next few days.

2010-2011  S1/A3447, available via search at http://www.njleg.state.nj.us/bills/BillView.asp

Update 1/25 – As expected, the Governor did veto the bill:

Governor Chris Christie Calls Current COAH Legislation Insufficient

Conditionally Vetoes Legislation that Fails to Reform and Perpetuates COAH Nightmare

For Immediate Release                                                                Contact: Michael Drewniak

Monday, January 24, 2011                                                                            Kevin Roberts

                                                                                                                      609-777-2600

 

Trenton, NJ – Governor Chris Christie today conditionally vetoed legislation that fails to reform how affordable housing is provided inNew Jersey.  The heavily amended legislation falls far short of its original intent by creating a new bureaucracy and continuing and even increasing an unnecessary burden on the State’s municipalities.

“If the goal of this legislation is to replace an already broken system for providing affordable housing with a common sense, predictable and achievable process, then this bill sorely misses the mark,” said Governor Christie.  “The Senate has presented a considerably different version of the legislation I originally supported in June – one that was simple and sufficiently close to the recommendations contained in the March 19, 2010, report of the Housing Opportunity Task Force. This version perpetuates the Council on Affordable Housing (COAH) nightmare by placing further burdens on municipalities and the environment while creating rather than eliminating additional bureaucracies in order to satisfy the needs of special interests.  I believe this bill should be amended to return it to its original, beneficial form as passed by the Senate in June.”

  • eliminating COAH and the arbitrary affordable housing numbers it assigned to municipalities
  • requiring that 1 out of every 10 newly constructed housing units be designated as affordable (towns with no growth would have no further affordable housing obligation other than to inventory and rehabilitate its existing affordable housing stock)
  • limiting State review of municipal housing plans
  • protection against builder’s remedy lawsuits for municipalities 
  • elimination of commercial development fees, though residential development fees were permitted to be charged if a developer chose not to build affordable units on-site and decided to pay the residential development fee instead

          

In its current, unacceptable form, S-1:

  • requires 10% of all the housing units in every municipality in the State to be affordable
  • necessitates that 25% of the affordable housing obligation be met by inclusionary development, legislating sprawl by increasing the amount of mandated new housing by 500% to 700%.  
  • creates a new regulated entity to review a municipality’s housing plans
  • causes towns to have to pay for two planners – one to draft the plan, and the other to certify it meets the requirements of the bill
  • provides no meaningful protection against builder’s remedy lawsuits
  • requires towns in the Highlands, Pinelands, Fort Monmouth and Meadowlands districts to have 15%to 20% of all new construction as affordable

Special thanks to Steven Sacks-Wilner for forwarding this release.


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