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August 13, 2012

Re:      Updated Guidance on Affordable Housing Trust Fund Dollars

Dear Mayor:

Here is where things stand on the battle to stop the state from taking affordable housing trust fund money from municipalities.

As you are probably aware, on July 24, 2012, municipalities across the state received a letter from Sean Thompson, Acting Executive Director of COAH.  Mr. Thompson included in this letter a calculation of uncommitted affordable housing trust fund money.  The letter also required towns to certify as to what their own internal accounting shows, and to remit any uncommitted funds by today, August 13, 2012. The Acting Executive Director subsequently sent out emails requiring the mayor of each town to sign the certification.

As you are also probably aware, Governor Christie attempted to abolish COAH some time ago through an executive branch reorganization plan.  Fair Share Housing Center challenged this reorganization in court.  As that case currently stands, the Appellate Division found the Governor’s action improper and ordered COAH to be reinstated.  The case is currently on appeal to the New Jersey State Supreme Court.

Last week, Fair Share filed a motion in that case challenging the reorganization.  In their motion, Fair Share argued that the administration is violating the Appellate Division order to reinstate COAH.  They went on to argue that the COAH board has not met since the order, and had not authorized Mr. Thompson to send his letter of July 24, 2012, and that only the COAH board, and not Mr. Thompson, is authorized to demand or accept trust fund payments.

On Friday, August 10, 2012, the Appellate Division agreed and granted Fair Share’s motion.  The Court stated that the “COAH Board...has not met and has not authorized the demand imposed on the municipalities” through the July 24, 2012 letter.

The Court went on to state that Mr. Thompson and the rest of the COAH staff are prohibited from “seeking a turnover from any municipality of affordable housing trust funds, and any funds that have been turned over shall be returned to the municipality.”

You can find a copy of this order here.

In practical terms, this means that municipalities are no longer required to remit to COAH any funds by the August 13, 2012 deadline (today) set out in the July 24, 2012 letter.  Furthermore, it means that towns that have already sent in funds can demand that COAH return that money.

The Court did not deal with the request for the certification of funds in general or the issue as to the appropriate person to sign it.  As we have previously indicated, we are concerned with COAH’s Acting Executive Director demanding that mayors sign the certification because mayors rarely have firsthand knowledge of the information requested.

Certainly, if you believe COAH made errors in its calculations, you may want to consider a letter or some other document informing them of the actual current state of any affordable housing trust funds you have.  We urge you to consult with your municipal attorney and other affordable housing professionals as to whether the certification should be completed and who is the appropriate individual to sign it.

Obviously, we cannot predict the next steps of the administration.  The decision on this motion was not unanimous, meaning the administration may appeal as of right to the Supreme Court.  As always, we will keep you updated on any further developments.

Again, we recommend that you discuss this decision with your municipal attorney and other affordable housing professionals, and that you obtain their advice before taking any further steps.

If you have any questions or require further information, please contact League Staff Attorney Matthew Weng at 609-695-3481 ext 137 or at mweng@njslom.com.

Very truly yours,

Bill Dressel
Executive Director

 

 

 

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