|Fairness and Affordable Housing
By Stuart R. Koenig
League Senior Assistant Counsel
Attorney, Stickel, Keonig and Sullivan
On August 24, 2009 the Appellate Division of the Superior Court of New Jersey issued an opinion that a municipality which had satisfied its fair share obligation under the Fair Housing Act (FHA) can, nonetheless, be compelled to accept additional affordable housing through the use variance process.1
The case creates a dent in the protections afforded compliant municipalities under the FHA, and has caused some question as to the viability and purpose of the Council on Affordable Housing (COAH) process and the Act.
The Facts of the Case The facts were that a private nonprofit provider of affordable housing sought to create eight affordable units on a .848 acre lot. The zoning called for single family detached housing, and multi-family dwellings were not permitted. The lot was occupied by a brick building containing four dwelling units. The local land use board denied the variance. Reliance for the denial was placed on Mount Laurel II, wherein the Supreme Court of New Jersey indicated that once a municipality provided a realistic opportunity for its fair share of the regional need for affordable housing it need do no more.2
COAH had already determined that the municipality had met its affordable housing obligation through construction of a low income family rental development, and that there was a 21 unit surplus of affordable housing. As a result, the local land use board rejected the inherently beneficial use argument that was advanced to satisfy the special reasons test for the use variance, and determined the proposed use was not inherently beneficial.
The lower court reversed the local board. It held that the municipality was required to contribute to the affordable housing needs of the entire state, and that affordable housing continued to be an inherently beneficial use. The lower court remanded the matter to the board for consideration of the variance as an inherently beneficial use. The appellate court agreed.
Despite the above referenced language from Mount Laurel II, relied upon by the municipality, the appellate decision held that neither the Federal Housing Administration (FHA), nor Mount Laurel I or II, explicitly or implicitly supported the argument that once a municipality’s Mount Laurel obligation has been fulfilled, a need for low and moderate income housing no longer exists in that municipality. Reliance for that conclusion was partly based on the fact that COAH has determined there is a statewide need of some 150,000 affordable units for the years between 1999 and 2018. The court’s view was that a municipality’s compliance with its constitutional obligation for affordable housing does not diminish the promotion of the general welfare through a use variance designed to satisfy the remaining statewide need beyond the municipal fair share of the regional need.
The court’s disconnection of the fair share of regional need from the statewide need allowed it to view compliance with the FHA and the Mount Laurel obligation as separate and distinct from a use variance for additional affordable housing units. As a result, the court observed that Mount Laurel compliance merely serves to protect a municipality from builder’s remedy litigation for failure to comply with its constitutional obligation, but had no effect on whether additional affordable housing would continue to advance the general welfare.
Having determined the FHA and Mount Laurel obligation were separate and distinct from the use variance process, the court approached the variance issue pursuant to a Municipal Land Use Law (MLUL) analysis and jurisprudence. Substantial reliance was placed on the 1970 Supreme Court decision of DeSimone v. Greater Englewood Housing Corporation, wherein it was found replacement of substandard housing with decent public or semi-public housing constituted a special reason upon which to ground a use variance.3 More recent decisions were relied upon as well, but none involved the Mount Laurel doctrine, FHA or COAH regulations. The decision would not be noteworthy but for the Mount Laurel compliance component.
Had the court recognized that the municipal fair share of regional need and statewide need are not separate and distinct, as the sum of every municipal fair share of regional need does total the statewide need, it might have reached a different result. It has long been recognized that regional need is related to the general welfare.4 It has also been recognized that “inherently beneficial uses are generally limited in number within a single municipality.”5 A respected commentator has observed, “where the need…is already satisfied, it may no longer be necessary to consider the use inherently beneficial.”6 A recognition that the municipal fair share of regional need and statewide need are interrelated, as opposed to separate and distinct, would have likely resulted in the court reading the FHA and MLUL in pari materia, meaning to construe them together.
Analysis The case can be read to be of limited application, because it involved a private nonprofit builder regulated by state and federal statutes whose purpose is to provide low cost housing,7 involved a small 100 percent affordable project, and did not require any apparent municipal subsidy. Unfortunately, however, the case is not written that narrowly. There is no statement that such variances can be limited to small nonprofit 100 percent affordable projects.
A great municipal concern is that the decision will find its way into for profit developer applications for inclusionary developments in Mount Laurel compliant municipalities. If so, municipalities will find themselves defending builder remedy type litigation in the form of challenges to variance denials. In such event, residents and public officials alike will wonder why the effort, time and expense was expended to achieve COAH compliance.
There is no suggestion in the case as to any limit of affordable housing at which point variance applications could be denied in any municipality short of satisfaction of the full 115,666 statewide need determined by COAH. While we can only speculate where the case will take us, in the short term it has clearly added greater confusion and uncertainty to an already overly complicated affordable housing compliance mechanism.
A concurring opinion recognized the conflicts inherent in the decision, but observed the Legislature has not made a determination, in either the FHA or MLUL, that a municipality’s affordable housing obligation is limited to its fair share of the regional need. The concurring opinion, essentially, invited the Legislature to act. It is essential that it do so immediately.
Stuart R. Koenig is Chairman of the League’s Legislative Committee on Land Use, Environment and Community Development.
1 Homes of Hope, Inc. v. Eastampton Township Land Use Board, __ N.J. Super. __ 976 A.2d
1128, 2009 WL 2579405 (App. Div. 2009).
2 Southern Burlington County N.A.A.C.P. v. Mount Laurel Tp. (Mt. Laurel II), 92 N.J. at
3 56 N.J. at 428.
4 Duffcon Concrete Products v. Borough of Cresskill, 1 N.J. 509, 513 (1949); Kunzler v.
Hoffman, 48 N.J. 277, 287 (1966).
5 SMR v. Fair Lawn Bd. of Adj., 152 N.J. 309,
6 Cox, New Jersey Zoning and Land Use
Administration, Section 7-4.2 at 186 (2009).
7 Described in Homes of Hope, Inc. v. Mount Holly Township Zoning Board of Adjustment, 236 N.J. Super. 579, 589 (Law Div. 1989).
This article was originally published in New Jersey Municipalities magazine. Vol. 86, No. 8, November 2009