As such, local municipalities have not always had a cohesive or uniformly-applied set of standards for housing owners or agents to follow. In the case referenced in the article, the Fair Share Housing Center, an Advocacy center for affordable housing, argued that although this legislation was not sufficiently enforced, it set up standards that should nevertheless be adhered to. The Supreme Court of New Jersey rejected that view and held that local municipalities are responsible for current/future affordable housing needs. Local municipalities cannot be expected to look retrospectively at regulations. Thus, local municipalities may only be required to look at current and future legislation. The Fair Share Housing Center is undecided about whether they will appeal.
This leaves community associations with affordable housing in an uncertain position about whether the units in their communities will be forced to keep affordable unit after the time has expired in order for municipalities to sustain its affordable housing requirements. Typically, an association’s governing documents provide for the number of affordable units contained within the community and the restrictions in place for them. Furthermore, typically the municipality in which the association is located will adopt an ordinance or resolution regarding the number of affordable units and reiterate the restrictions that shall remain in place on them. Such provisions usually provide for the automatic termination of the affordable housing controls upon either (a) the foreclosure by the first mortgage holder, or (b) expiration of the control period (usually 30 years). The deed to each affordable unit also contains the restrictions in place for the unit, including the termination provision.
Nevertheless, some governing documents, unit deeds, and/or ordinances allow for the municipality to renew the affordable housing control term for an additional period of time if adopted and recorded prior to the expiration of the current control term.
However, as noted above, there is recent case law in which the court ruled that municipalities are not obligated to calculate and zone for affordable housing needs that went unmet during this “gap” period, but must consider them in their current and future housing calculations. However, it appears that this refers to a municipality’s responsibility to build or provide additional affordable housing to comply with the requirements established during this “gap” period when there was no clear enforcement. It is unclear that a court would rule that the recent renewal of affordable controls would be unenforceable, especially if a specific municipality has an agency that oversees its affordable units.
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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