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Affordable Housing in New Jersey

By Stephanie Wiegand, Esq. January 25, 2017 Posted in Community Association Law, Landlord/Tenant Law

This past week, the Supreme Court of New Jersey issued a decision that could require the municipalities of New Jersey to reconsider their affordable housing accommodations. In a unanimous 6-0 decision, written by Justice Jaynee LaVecchia, the Court defined how the municipalities in New Jersey are to calculate their respective needs for affordable housing.

Municipalities in New Jersey have been debating their requirements to make affordable housing accommodations for low income residents for over a decade. The Court previously ruled on a series of cases, collectively known as the Mount Laurel cases. The Court stated that municipalities have a constitutional obligation to use their zoning power in a manner that creates low- and moderate-income housing. The Council on Affordable Housing (COAH) was created and became responsible for the creation of three rounds of regulations to govern affordable housing requirements. COAH issued round one of the housing obligations, which governed from 1987 through 1993. COAH issued round two, which governed from 1993 through 1999. COAH attempted twice to issue a third round of regulations, but both times the regulations created violated the New Jersey Constitution.

After 1999, municipalities were unable to determine how to comply with affordable housing requirements due to COAH’s failure to create a third round of regulations. By 2015, COAH had still not issued a third round of regulations. In 2015, the Supreme Court rendered a decision that considered COAH defunct, and called for a judicial forum as “a substitute for [COAH’s] substantive certification process.” In re N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 7, 110 A.3d 31, 35 (2015). Municipalities were required to file for declaratory judgment for the judicial forum to hear their case.

Following the 2015 decision, 300 declaratory judgment actions were commenced throughout the state. The judicial forum considered how to remedy the affordable housing issues created from COAH’s second round of regulations (1999) through the date of the Court’s decision (2015). This time period was referred to as the “gap-period.” The Court, in an interlocutory appeal, considered the arguments brought before the judicial forum by the League of Municipalities, on behalf of New Jersey’s 565 municipalities, and the Fair Share Housing Center, on behalf of lower-income families.

The League of Municipalities argued that municipalities are under no obligation to provide affordable housing based on the gap period from 1999-2015. On the contrary, the Fair Share Housing Center argued that if the Court were to decide for the League of Municipalities, the municipalities would have avoided 60% of their affordable housing obligations since 1999. Moreover, the Fair Share Housing Center argued that a special determination should be made to calculate the affordable housing requirements during the gap period. This would essentially take the place of COAH’s third round of regulations.

The Court took the middle ground between these arguments. The Court reaffirmed that the Mount Laurel cases made it clear that the New Jersey Constitution requires affordable housing to be provided to its citizens. The Court decided that the municipalities should be required to consider the “present need” for affordable housing, which requires municipalities to consider the current overcrowded and deficient housing units. The Court expanded the definition of “present need” to include an analysis of the impact that the gap period has had on affordable housing. For example, if the town was unable to produce affordable housing since 1999, the town must consider that as a part of their “present need” analysis.

This case resolved affordable housing regulation debates that have been ongoing since 1999. However, the Court provided no guidance on the method of implementation of affordable housing accommodations that it now requires of municipalities. This decision leaves numerous unanswered questions and it will depend heavily on the Legislature to issue reform of affordable housing requirements. This decision requires implementation of affordable housing accommodations into township plans that have not otherwise considered them since 1999. It is likely that the open spaces in towns will now be filled with affordable housing units, which will bring an influx of population to municipalities.

This may also impact current Landlords, Condominiums, and Homeowners Associations. Towns that are unable to add affordable housing units within their municipalities may look to current properties to support the need for affordable housing requirements. We will need to watch the Legislature to see how and if it will alter the current affordable housing regulations to comply with the Court’s recent ruling.

The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances.  Each legal matter is unique, and prior results do not guarantee a similar outcome.


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