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October 8, 2010

RE: Court strikes down COAH 3rd round regulations

Dear Mayor,

Today, the Appellate Division issued its decision in the consolidated appeal of 22 separate challenges, including one brought by the League,  to the COAH 3rd round regulations.    In its decision, the Court:

  • Invalidated substantive portions of the COAH regulations, including declaring “growth share” as applied by COAH as unconstitutional;
  • Remanded the regulations to COAH to develop new regulations, based on the 1st and 2nd round methodologies.
  • Did not address the inadequacies of the vacant land analysis and statewide determination of need (two major objections raised by the League and municipalities) because it struck down the regulations.    On this point, the Court did “…note that some of these issues are substantial and could have resulted in invalidation of the prospective need components of the third round rules even if the growth share methodology has been found to be valid.”

The bottom line is that the Court struck down regulations widely seen as burdensome to local governments.    The Court also struck down growth share, but in doing so, the decision also reads,   “It may be that the time has arrived for reconsideration of the part of the Mount Laurel II that appears to militate against the use of any growth share methodology for determining a municipality’s affordable housing obligation. However, this court has no authority to undertake such reconsideration; we are bound by the decision of our Supreme Court.” 

On the final page of the decision, it reads, “…we decline to issue a blanket stay of the proceedings before COAH or in the courts pending completion of the remand to COAH.  However, any municipality or other interested party may apply for a stay to COAH or the court  in which a Mount Laurel case is pending.”

We strongly recommend consulting with your municipal attorneys as to the impact of this decision on your municipality.    League staff and attorneys are analyzing the decision, particularly in light of a potential petition for appeal to the State Supreme Court and the legislative reforms pending in the Legislature.   We will follow with more on this decision shortly, and will continue to advise you of any new developments, including any guidance offered by COAH. 

For background, the Council on Affordable Housing (COAH) proposed this second version of “third round” regulations after the Appellate Division invalidated the first version in 2007.   From the outset, however, it was clear that the new regulations were fundamentally flawed, relying upon an inflated determination of vacant land as well as outdated data. 

The League, backed by financial pledges of $500 from over 250 municipalities, filed a challenge to these regulations in July 2008.  Dozens of other organizations filed suit as well, each challenging various aspects of the regulations.    In total, there were 22 different appeals filed.    The League submitted its brief and documentation in this case in January 2009, citing the following:

  • Fundamental Flaws in the COAH methodology and the determination of need;
  • The allocation of the projected need is similarly flawed, including the agency’s failure to consider the State Plan, the Highlands Plan and other State planning priorities; and 
  • Implementation of the regulations would impose overwhelming financial obligations on taxpayers, in violation of the Fair Housing Act.

The 22 appeals were consolidated, and oral argument was heard before the Appellate Division on December 1, 2009.    Since then, legislation to abolish COAH and make other reforms to the Fair Housing Act has passed the State Senate (S-1, passed on June 10, 2010 by a vote of 28-3); and the General Assembly is expected to consider and act on housing reform this fall.

The Appellate Division decision is online at: http://www.judiciary.state.nj.us/opinions/a5382-07a5404-07etal.pdf

The League’s brief is available at: http://www.njslom.org/COAH-Brief-and-Appendix.pdf and the reply brief is online at: http://www.njslom.org/NJLM-Reply-Brief-4-8-09.pdf.

It is likely that most, if not all, of the parties involved will petition the State Supreme Court to hear an appeal.    The League staff and attorneys will review the decision, and advise what they believe should be our next steps.   

While this decision strikes regulations which placed unsustainable obligations on municipalities, it does pose more questions than answers, and ultimately the solution should lie with the Legislature.    We would also like to thank the over 250 municipalities who made $500 contributions towards this litigation. 

Questions on this letter can be directed to Mike Cerra at mcerra@njslom.com or 609-695-3481 x120.

Very Truly Yours,

 

William G. Dressel, Jr.
Executive Director

 

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