In the Matter of the Adoption of N.J.A.C. 5:96 and 5:97 by the New Jersey Council on Affordable Housing

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
In re Adoption of N.J.A.C. 5:96 & 5:97 by N.J. Council on Affordable Housing (A-90 to -94-10) (067126)
Argued November 14, 2012 -- Decided September 26, 2013
LaVECCHIA, J., writing for a majority of the Court.
In this appeal, the Court considers the validity of the most recent iteration of regulations applicable to the
third round of municipal affordable housing obligations (Third Round Rules) adopted pursuant to the Fair Housing
Act (FHA), L. 1985, c. 222; see N.J.S.A. 52:27D-302. With those regulations, the Council on Affordable Housing
(COAH) proposed a “growth share” methodology for assessing prospective need in allocating a municipality’s fair
share of the region’s need for affordable housing.
The Court’s Mount Laurel decisions recognized a constitutional obligation that municipalities, in the
exercise of their delegated power to zone, “afford[] a realistic opportunity for the construction of [their] fair share of
the present and prospective regional need for low and moderate income housing.” S. Burlington Cnty. NAACP v.
Twp. of Mount Laurel, 92 N.J. 158 (1983) [hereinafter Mount Laurel II] (citing S. Burlington Cnty. NAACP v.
Twp. of Mount Laurel, 67 N.J. 151 (1975) [hereinafter Mount Laurel I]). Mount Laurel I was followed by years of
political inertia, failing to address the constitutional deprivation affecting the least fortunate in our society. The
Court preferred a legislative solution. However, in the absence of a legislative response, the Court was compelled in
Mount Laurel II to fashion a remedy designed to curb exclusionary zoning practices and to foster development of
affordable housing for low- and moderate-income individuals.
Thereafter, the Legislature enacted the FHA, which codified the core constitutional holding undergirding
the Mount Laurel obligation and included particularized means by which municipalities could satisfy their
obligation, mirroring the judicially crafted remedy. The FHA also created COAH, N.J.S.A. 52:27D-305, and
provided it with rulemaking and adjudicatory powers to execute the provision of affordable housing. In regulations
covering prior time periods (the First Round Rules and Second Round Rules), the methodologies used by COAH
largely followed the remedial approaches established in Mount Laurel II.
In this case, the Court reviews the Appellate Division’s invalidation of the most recent iteration of the
Third Round Rules. In the Third Round Rules, COAH proposed a new approach—a “growth share” methodology—
for assessing prospective need in the allocation of a municipality’s fair share of the region’s need for affordable
housing. In its decision, the Appellate Division expressed doubt about whether any growth share methodology could
be compatible with the Mount Laurel II remedy for determining a municipality’s affordable housing obligation. In
re Adoption of N.J.A.C. 5:96 & 5:97, 416 N.J. Super. 462 (App. Div. 2010). That overarching question looms over
all other issues in this challenge to the Third Round Rules.
HELD: The Third Round Rules are at odds with the FHA, which incorporated the Mount Laurel II remedy.
Although that remedy imposed thirty years ago should not be viewed as a constitutional straightjacket to legislative
innovation of a new remedy responsive to the constitutional obligation, the FHA remains the current framework
controlling COAH’s actions. With respect to the current version of the FHA, the Third Round Rules are ultra vires.
1. Under the revised Third Round Rules, a municipality accrues its affordable housing obligation as a percentage of
growth that actually occurs within its borders. The growth share obligation is based on ratios formulated from
statewide—not regional—data on projected housing need, employment and residential growth. Although COAH
initially calculates a municipality’s projected growth share obligation, the regulations provide that a municipality
only incurs the obligation to the extent growth actually occurs. COAH’s biennial review process ensures that
projected growth share obligations are replaced with obligations that are proportionate to the municipality’s actual
residential and employment growth. (pp. 29-36)
1
2. The Court imposed a judicial remedy in Mount Laurel II because of municipal inertia toward allowing affordable
housing. Prospective regional need was conceived as an ascertainable figure to be calculated before determining
specific municipal obligations. To the extent the growth share approach is not based on region-specific data and is
not structured to establish a firm obligation in respect of prospective affordable housing need, it is inconsistent with
the Mount Laurel II remedy. However, the Court recognizes that its analysis cannot, and does not, end there. In the
three decades since Mount Laurel II, many changed circumstances have influenced the development of housing in
New Jersey. In light of those changes, there may be reasonable bases for considering alternative approaches to
promote the production of affordable housing. The constitutional obligation reaffirmed and refined in Mount Laurel
II is distinct from the judicial remedy embraced by the Court. The Legislature may wish to consider the benefits of
an alternate remedy that accounts for current circumstances. The judicial remedy imposed in Mount Laurel II is not
a straightjacket to legislative innovation for satisfaction of the constitutional obligation. (pp. 36-46)
3. That said, the Third Round Rules’ validity hinges on whether they are consistent with the FHA. The FHA’s
framework is replete with references tying affordable housing obligations to a region, not obligations formed on a
statewide basis, and it requires a specifically allotted number of units for satisfaction of both present and prospective
need based on a housing region. Although Section 307 of the FHA permits COAH to adjust prospective need
methodology based on decisions of other branches of government, that oblique reference does not authorize the
agency to rewrite such core aspects of its enabling legislation, which are premised on an allocation basis for
prospective need within a housing region. The policy adopted by the Legislature cannot be rewritten by COAH to
the degree it has done through the growth share methodology. The FHA tracked the Mount Laurel II allocation
methodology for satisfaction of present and prospective need based on housing region. COAH was not free to
abandon that approach, and the Court is not free to ignore the legislative choice. The growth share methodology is
inconsistent with the FHA and thus COAH’s regulations are ultra vires. The Legislature may determine to authorize
new avenues for addressing regional need and the promotion of affordable housing. (pp. 46-53)
4. The growth share methodology is so intertwined with the new regulatory scheme that it cannot be severed. The
Court’s conclusion requires a new adoption of regulations to govern the third round municipal obligations consistent
with the strictures of the FHA. New rules cannot wait further while time is lost during deliberations on a new
affordable housing approach. A remedy must be put in place to eliminate the limbo in which municipalities, New
Jersey citizens, developers, and affordable housing interest groups have lived for too long. Accordingly, the Court
endorses the Appellate Division’s five-month deadline for reimposing third-round obligations based on the previous
rounds’ method of allocating fair share obligations among municipalities. The Court notes the remedy is the
remedial formula adopted by COAH, consistent with the FHA, and one even COAH agrees can be implemented
quickly. (pp. 53-59)
JUSTICE HOENS, DISSENTING, joined by JUSTICE PATTERSON, agrees that the judicial remedy
created thirty years ago is not the only constitutionally permissible method for providing affordable housing, but
expresses the view that the growth share approach is consistent with both Mount Laurel II and the FHA.
The judgment of the Appellate Division is AFFIRMED AS MODIFIED.
JUSTICE ALBIN and JUDGE RODRÍGUEZ (temporarily assigned) join in JUSTICE
LaVECCHIA’s opinion. JUSTICE HOENS filed a separate, dissenting opinion in which JUSTICE
PATTERSON joins. CHIEF JUSTICE RABNER and JUDGE CUFF (temporarily assigned) did not
participate.
2
SUPREME COURT OF NEW JERSEY
A-90/91/92/93/94 September Term 2010
067126
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 5:96 AND 5:97 BY
THE NEW JERSEY COUNCIL ON
AFFORDABLE HOUSING.
Argued November 14, 2012 – Decided September 26, 2013
On certification to the Superior Court,
Appellate Division whose opinion is reported
at 416 N.J. Super. 462 (2010).
Edward J. Buzak argued the cause for
appellant and cross-respondent New Jersey
State League of Municipalities (The Buzak
Law Group, attorneys).
Jonathan E. Drill argued the cause for
appellants and cross-respondents Clinton
Township, Bedminster Township, Bernards
Township, Bethlehem Township, Town of
Clinton, Greenwich Township, Montgomery
Township, Peapack-Gladstone Borough,
Readington Township, Roseland Borough, Union
Township and Marvin J. Joss (Stickel, Koenig
& Sullivan, attorneys; Stuart R. Koenig, on
the briefs).
Kevin D. Walsh argued the cause for
appellant and cross-respondent Fair Share
Housing Center (Mr. Walsh, attorney; Mr.
Walsh and Adam M. Gordon, on the briefs).
1
Stephen M. Eisdorfer argued the cause for
respondent New Jersey Builders Association
(Hill Wallack, attorneys; Mr. Eisdorfer and
Thomas F. Carroll, III, on the brief).
Geraldine Callahan, Deputy Attorney General,
argued the cause for respondent New Jersey
Council on Affordable Housing and
Commissioner of the Department of Community
Affairs (Jeffrey S. Chiesa, Attorney General
of New Jersey, attorney; Ms. Callahan,
George N. Cohen, and Donald M. Palombi,
Deputy Attorneys General on the briefs).
Jeffrey R. Surenian argued the cause for
respondents and cross-appellants Borough of
Atlantic Highlands and Township of
Middletown (Jeffrey R. Surenian and
Associates, attorneys; Mr. Surenian, Nancy
L. Holm, Michael A. Jedziniak, and Donna A.
McBarron, on the briefs).
Kevin J. Moore argued the cause for
respondent New Jersey Chapter of the
National Association of Industrial and
Office Properties (Sills Cummis & Gross
P.C., attorneys; Mr. Moore and Peter M.
Flannery, on the brief).
Jeffrey L. Kantowitz argued the cause for
respondents Kenneth Martin, Alice Martin and
MTAE, Inc. (Law Office of Abe Rappaport,
attorneys).
Tracy A. Siebold submitted a brief on behalf
of amici curiae The Corporation for
Supportive Housing and Supportive Housing
Association of New Jersey (Ballard Spahr,
attorneys).
2
Kenneth H. Zimmerman and Catherine Weiss
submitted a brief on behalf of amici curiae
New Jersey Future, American Planning
Association, American Planning Association-
New Jersey Chapter, and the Housing &
Community Development Network of New Jersey
(Lowenstein Sandler, attorneys; Mr.
Zimmerman, Ms. Weiss, Michael J. Hahn,
Michael T.G. Long, and Ryan J. Cooper, on
the brief).
Lawrence S. Lustberg submitted a brief on
behalf of amici curiae New Jersey State
Conference of the National Association for
the Advancement of Colored People and Latino
Action Network (Gibbons P.C., attorneys; Mr.
Lustberg and Eileen M. Connor, on the
brief).
Kevin J. Moore submitted a brief on behalf
of amicus curiae The International Council
of Shopping Centers (Sills Cummis & Gross,
attorneys).
Georgette Castner submitted a brief on
behalf of amici curiae Pennsauken Township
and Montclair Township (Montgomery,
McCracken, Walker & Rhoads, attorneys; Ms.
Castner and Myron Orfield, a member of the
Minnesota bar, on the brief).
Ronald K. Chen submitted a brief on behalf
of amicus curiae American Civil Liberties
Union of New Jersey Foundation (Mr. Chen,
attorney; Mr. Chen, Edward L. Barocas,
Jeanne M. Locicero, and Alexander R. Shalom,
of counsel and on the brief).
Martin F. McKernan, Jr. submitted a brief on
behalf of amici curiae Catholic Charities,
3
Diocese of Camden, Inc., Catholic Charities,
Diocese of Metuchen, Catholic Charities,
Diocese of Paterson, and Catholic Charities,
Diocese of Trenton (McKernan McKernan &
Godino, attorneys).
Melville D. Miller, Jr., President, and
Connie M. Pascale submitted a brief on
behalf of amicus curiae Legal Services of
New Jersey (Mr. Miller, attorney).
JUSTICE LaVECCHIA delivered the opinion of the Court.
Our Mount Laurel decisions recognized a constitutional
obligation that municipalities, in the exercise of their
delegated power to zone, “afford[] a realistic opportunity for
the construction of [their] fair share of the present and
prospective regional need for low and moderate income housing.”
S. Burlington Cnty. NAACP v. Twp. of Mount Laurel, 92 N.J. 158,
205 (1983) [hereinafter Mount Laurel II] (citing S. Burlington
Cnty. NAACP v. Twp. of Mount Laurel, 67 N.J. 151, 174, appeal
dismissed and cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L.
Ed. 2d 28 (1975) [hereinafter Mount Laurel I]). Mount Laurel I
was followed by years of political inertia, failing to address
the constitutional deprivation affecting the least fortunate in
our society. We preferred a legislative solution. However, in
the absence of a legislative response to the constitutional
imperative set forth in Mount Laurel I, we were compelled in
Mount Laurel II to fashion a remedy that was necessary to meet
4
the urgency of the problem. It was designed to curb
exclusionary zoning practices and to foster development of
affordable housing for low- and moderate-income individuals. It
also was an extraordinarily detailed remedy.
Thereafter, the Legislature enacted the Fair Housing Act
(FHA), L. 1985, c. 222. See N.J.S.A. 52:27D-302; Hills Dev. Co.
v. Twp. of Bernards, 103 N.J. 1, 19 (1986). The FHA codified
the core constitutional holding undergirding the Mount Laurel
obligation, see In re Petition for Substantive Certification
Filed by Twp. of Warren, 132 N.J. 1, 12 (1993) (citing to Mount
Laurel obligation found in N.J.S.A. 52:27D-302(a), (d), (e),
-311(a), -314(a), (b)), and included particularized means by
which municipalities could satisfy their obligation, mirroring
the judicially crafted remedy. Further, the FHA created the
Council on Affordable Housing (COAH), N.J.S.A. 52:27D-305, and
provided it with rulemaking and adjudicatory powers to execute
the provision of affordable housing. Hills, supra, 103 N.J. at
19-20.
In this matter, we review the Appellate Division’s
invalidation of the most recent iteration of COAH regulations
applicable to the third round of municipal affordable housing
obligations (Third Round Rules). In the Third Round Rules, COAH
proposed a new approach -- a “growth share” methodology -- for
5
assessing prospective need in the allocation of a municipality’s
fair share of the region’s need for affordable housing. In
invalidating the Third Round Rules, the Appellate Division
expressed doubt about whether any growth share methodology
adopted by COAH could be compatible with the Mount Laurel II
remedy that “appears to militate against the use of” a growth
share approach for determining a municipality’s affordable
housing obligation. In re Adoption of N.J.A.C. 5:96 & 5:97, 416
N.J. Super. 462, 485 (App. Div. 2010). That overarching
question looms over all other issues in this challenge to the
Third Round Rules.
Having had three decades of experience with the current
affordable housing remedy, we cannot say that there may not be
other remedies that may be successful at producing significant
numbers of low- and moderate-income housing -- remedies that are
consistent with statewide planning principles, present space
availability, and economic conditions. New Jersey in 2013,
quite simply, is not the same New Jersey that it was in 1983.
Changed circumstances may merit reassessing how to approach the
provision of affordable housing in this state. Assumptions used
in devising a remedy in 1983 do not necessarily have the same
validity today. That assessment, however, is best made by the
policymakers of the Legislature who can evaluate the social
6
science and public policy data presented to this Court. Indeed,
at oral argument, the many parties to this litigation were
questioned as to whether their arguments were better suited for
legislative hearings on the subject.
That said, our response to the overarching question
previously identified is that the constitutional obligation and
the judicial remedy ordered by this Court in Mount Laurel II,
and in place today through the FHA, are distinct and severable.
The exceptional circumstances leading this Court to create a
judicial remedy thirty years ago, which required a specific
approach to the identification and fulfillment of present and
prospective need for affordable housing in accordance with
housing regions in our state, should not foreclose efforts to
assess whether alternative approaches are better suited to
modern planning, development, and economic conditions in the
Garden State. The policymaking branches may arrive at another
approach to fulfill the constitutional obligation to promote
ample affordable housing to address the needs of the people of
this state and, at the same time, deter exclusionary zoning
practices. We hold that our remedy, imposed thirty years ago,
should not now be viewed as a constitutional straightjacket to
legislative innovation.
7
However, unless the Legislature amends the FHA, which
tracks the judicial remedy in its operative provisions, the
present regulations premised on a growth share methodology
cannot be sustained. The changes in the Third Round Rules are
beyond the purview of the rulemaking authority delegated to COAH
because they conflict with the FHA, rendering the regulations
ultra vires.
Moreover, due to COAH’s failure to enact lawful regulations
to govern municipalities’ ongoing obligations to create
affordable housing under the FHA, we have no choice but to
endorse the remedy imposed by the Appellate Division in order to
fill the void created by COAH. COAH shall adopt regulations, as
directed by the Appellate Division, without delay. As modified
by this opinion, we thus affirm the Appellate Division’s
judgment with respect to the invalidity of the Third Round Rules
under the FHA as expressed in the Honorable Stephen Skillman’s
comprehensive opinion.
I.
The following summary of the Mount Laurel doctrine outlines
the key points in its development through a series of cases, the
FHA’s enactment, and prior regulations.
A.
8
In Mount Laurel I, supra, this Court held that a developing
municipality could not utilize its zoning power to eliminate the
realistic possibility of construction of affordable low- and
moderate-income housing without acting in a manner contrary to
the state’s general welfare. 67 N.J. at 174. We explained that
zoning decisions involve the exercise of police powers and have
a “substantial external impact” on neighboring areas. Id. at
177. Thus, we reasoned that the adoption of zoning ordinances
having an exclusionary effect required, under our State
Constitution, a developing municipality to consider and serve
the interests of citizens beyond its borders. Id. at 174-75,
177. Consequently, Mount Laurel I prohibited the discriminatory
use of zoning powers and mandated that developing municipalities
like Mount Laurel affirmatively act to make housing available to
their fair share of the region’s present and prospective need
for low- and moderate-income housing. Id. at 187-88.
Despite the constitutional “general welfare” pronouncement
in Mount Laurel I, the holding’s impact was stunted by the
absence of critical definitions, such as a “municipality’s fair
share” and the “present and prospective regional need.” See,
e.g., Oakwood at Madison, Inc. v. Twp. of Madison, 72 N.J. 481,
499 (1977) (declining to define ambiguous term “fair share”).
Its impact also was limited by its restriction to developing
9
municipalities, rather than all communities. See, e.g., Pascack
Ass’n v. Mayor & Council of Washington, 74 N.J. 470, 483-84
(1977) (finding Mount Laurel doctrine only applied to developing
municipalities when considering challenge to zoning ordinance in
“fully developed, predominantly single-family residential
community”). Moreover, municipalities continued to resist
applying zoning ordinances in non-exclusionary manners and
failed to provide for the creation of affordable housing.
In response, our 1983 decision in Mount Laurel II, supra,
strengthened the Mount Laurel doctrine. 92 N.J. at 205. Having
already been recognized in Mount Laurel I as constitutionally
required to serve human values essential to individuals beyond
just those persons living within the geographic borders of a
municipality, Mount Laurel II reaffirmed that a municipality’s
zoning power could not be utilized in contravention of the
general welfare of the state and restated the legal and moral
bases for its conclusion. Id. at 208-10. The holding
emphasized that helping people secure a decent home is more than
just an ideal. Ibid. It is a fundamental constitutional, and
moral, general welfare obligation. Ibid. Municipalities
satisfy “that constitutional obligation by affirmatively
affording a realistic opportunity for the construction of
[their] fair share of the present and prospective regional need
10
for low and moderate income housing. This is the core of the
Mount Laurel doctrine.” Id. at 205 (internal citation omitted).
Thus, when exercising their power to zone, municipalities
across the state -- not just developing municipalities –- are
required to account for the housing needs of individuals
residing outside of their municipalities “but within the region
that contributes to the housing demand” in their municipalities.
Id. at 208. “That is the constitutional rationale for the Mount
Laurel doctrine. The doctrine is a corollary of the
constitutional obligation to zone only in furtherance of the
general welfare.” Id. at 209.
Municipalities’ intransigence in creating affordable
housing at the time Mount Laurel II was presented to the Court
triggered the imposition of the judicial remedy that then was
fashioned. Id. at 199-201. The Court in Mount Laurel II
explained that its remedy “provide[d] a method of satisfying
that obligation when the zoning in question affects housing.”
Id. at 209. We stated that we would no longer tolerate a
“numberless approach” as a remedy and that the “fair share”
standard must be quantitative, not qualitative, in order to
satisfy the constitutional obligation. Id. at 222. We
proceeded to detail -- because of the absence of any legislative
solution -- assumptions to be used, and those avoided, in
11
crafting a permissible formula for determining a municipality’s
“fair share,” id. at 256-57, and a standard for evaluating a
“realistic opportunity,” id. at 260-61.
Extending the doctrine’s reach to all municipalities, id.
at 258-59, Mount Laurel II added teeth to the doctrine by
adopting a judicial remedy. We created a special litigation
track for exclusionary zoning cases, id. at 292-93, enumerated
certain affirmative measures that would define the tools at a
municipality’s disposal, id. at 260-67, and sanctioned a
“builder’s remedy,” which permits builder-plaintiffs to sue for
the opportunity to construct housing at higher densities than a
municipality otherwise would allow, id. at 279-81. Despite this
Court’s specific enforcement enhancements to the doctrine, we
repeated a preference for legislative solutions in the
affordable housing arena. Id. at 352. In 1985, the New Jersey
Legislature heeded that call by enacting the FHA. L. 1985, c.
222; see N.J.S.A. 52:27D-302.
B.
The FHA created COAH and vested it with primary
responsibility for assigning and determining municipal
affordable housing obligations. N.J.S.A. 52:27D-305. The FHA
charged COAH “with, among other things, determining State
housing regions, estimating the State and regional present and
12
prospective need for low and moderate income housing, and
adopting criteria and guidelines for a [m]unicipal determination
of its present and prospective fair share of [the region’s]
housing need.” Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J.
502, 544 (2002) (internal citations and quotation marks
omitted); Hills, supra, 103 N.J. at 19-20. The FHA also
contained a safe haven for municipalities that bear their fair
share of their region’s low- and moderate-income housing need:
they can seek substantive certification from COAH, N.J.S.A.
52:27D-313, which, if granted, insulates that municipality from
exclusionary zoning litigation for ten years (six years as
originally passed), N.J.S.A. 52:27D-313(a). The FHA transferred
all pending and future Mount Laurel litigation to COAH for
resolution in the first instance through the agency’s
administrative processes. Hills, supra, 103 N.J. at 20.
This Court upheld the FHA against a constitutional
challenge, determining the statute was a valid method of
creating a realistic opportunity to satisfy the state’s
affordable housing need. Id. at 25, 41-42; see also id. at 43(reviewing Court’s requests to Legislature to act when
explaining, in part, reasoning for strong deference to
Legislature).
C.
13
COAH adopted rules delineating the affordable housing
obligations of municipalities for the periods of 1987 to 1993 –-
the First Round Rules –- and 1993 to 1999 –- the Second Round
Rules. See N.J.A.C. 5:92-1.1 to -18.20, Appendices A to F;
N.J.A.C. 5:93-1.1 to -15.1, Appendices A to H. COAH
subsequently readopted the Second Round Rules and established
May 2004 as the new expiration date for that period of
obligations.
In general, the First and Second Round Rules utilized a
methodology for calculating affordable housing obligations that
was consistent with the mechanisms developed by trial courts
prior to the FHA’s enactment. In re N.J.A.C. 5:96, supra, 416
N.J. Super. at 473; see, e.g., AMG Realty Co. v. Twp. of Warren,
207 N.J. Super. 388 (Law Div. 1984) (developing methodologies
for determining affordable housing obligations). The First
Round Rules specified methods for determining present need,
including indigenous need and reallocated present need, and
prospective need. See N.J.A.C. 5:92, Appendix A. Present need
was defined as “the total number of deficient housing units
occupied by low or moderate income households as of July 1,
1987.” N.J.A.C. 5:92-1.3. To establish present need, COAH used
several factors, including “overcrowding, age of unit, and lack
of plumbing, kitchen or heating facilities as indicators of
14
dilapidated housing.” In re Adoption of N.J.A.C. 5:94 & 5:95,
390 N.J. Super. 1, 23 (App. Div.), certif. denied, 192 N.J. 71,
71-72 (2007). “[E]xcess present need in urban aid
municipalities was reallocated to all municipalities within the
regional growth area.” Ibid.; see N.J.A.C. 5:92, Appendix A
(designating regional growth areas).
In contrast, prospective need was “a projection of low and
moderate housing needs based on development and growth . . .
reasonably likely to occur in a region or a municipality.”
N.J.A.C. 5:92-1.3. COAH used statistical analysis to project
the number of “low- and moderate-income households” that would
form between 1987 and 1993. N.J.A.C. 5:92, Appendix A at 92-49.
In determining prospective need, COAH considered municipalities’
“approvals of development applications, real property transfers
and economic projections prepared by the State Planning
Commission.” N.J.A.C. 5:92-1.3.
The First Round Rules determined a municipality’s allocated
need “based on employment within the municipality, projected
employment within the municipality, the percentage of the
municipality in a growth area, and the municipality’s wealth,”
which was similar to the calculations developed in AMG Realty,
supra, 207 N.J. Super. at 398-410. In re N.J.A.C. 5:94, supra,
390 N.J. Super. at 23-24 (citing N.J.A.C. 5:92, Appendix A at
15
92-49 to -50). Unlike AMG Realty, however, COAH’s methodology
considered “secondary sources of housing supply and demand in
calculating both statewide and regional need.” In re N.J.A.C.
5:94, supra, 390 N.J. Super. at 24. COAH’s First Round Rules
also identified market forces that have the effect of reducing
overall housing need. Ibid. (citing N.J.A.C. 5:92, Appendix A
at 92-52 to -54 (addressing filtering, residential conversions,
and spontaneous rehabilitation)).1
The Second Round Rules maintained the methodologies adopted
in the First Round Rules. N.J.A.C. 5:93, Appendix A. COAH also
adopted regulations that granted credits and adjustments to
municipalities to reduce their fair share figures. See N.J.A.C.
5:93-2.15, -3.2 (credits for affordable housing constructed
between 1980 and 1986); N.J.A.C. 5:93-3.6 (credits for
substantial compliance); N.J.A.C. 5:93-5.15 (credits for rental
housing); N.J.A.C. 5:93-4.2, -4.3 (adjustments for
municipalities lacking sufficient vacant land or access to water
1
Filtering occurs when “newer, more desirable housing options
bec[o]me available in the housing market, [prompting] middle-
and upper-income households [to] move out of the existing
housing, making it available . . . for a lower-income
household.” Ibid. “‘Residential conversion’ occurs when
additional dwelling units [are] created from already existing
structures.” Ibid. “‘Spontaneous rehabilitation’ occurs when
dilapidated housing, affordable to low- and moderate-income
households, [is] rehabilitated by the private market without the
assistance of any government program.” Ibid.
16
and sewerage). Additionally, the Second Round Rules permitted
municipalities “to satisfy up to twenty-five percent of their
fair share through age-restricted affordable housing.” In re
N.J.A.C. 5:94, supra, 390 N.J. Super. at 25 (citing N.J.A.C.
5:93-5.14).
Various legal challenges to COAH’s First and Second Round
Rules failed. See, e.g., Twp. of Bernards v. Dep’t of Cmty.
Affairs, 233 N.J. Super. 1, 12-22 (App. Div.), certif. denied,
118 N.J. 194 (1989) (rejecting numerous challenges to First
Round Rules, including allegation that COAH acted arbitrarily in
considering municipality’s wealth as allocation factor); Van
Dalen v. Washington Twp., 120 N.J. 234, 246-47 (1990) (upholding
COAH’s reliance on planning designations in State Development
Guide Plan); In re Petition for Substantive Certification Filed
by Twp. of Warren, 247 N.J. Super. 146, 179-83 (App. Div. 1991)
(rejecting challenge that First and Second Round Rules violated
Mount Laurel doctrine because they did not require housing for
most impoverished citizens), rev’d in part on other grounds, 132
N.J. 1 (1993) (invalidating occupancy preference regulation
allowing municipalities to set aside fifty percent of fair share
housing for low- and moderate-income persons who lived or worked
in town).
17
In sum, until adoption of the Third Round Rules, the
methodologies used by COAH largely followed the remedial
approaches established in Mount Laurel II and AMG Realty. For
two decades following Mount Laurel II, the process of allocating
municipal affordable housing obligations proceeded in steps.
COAH first would calculate the need for affordable housing in
each of the state’s regions and then would allocate to each
municipality its fair share of the present and prospective
regional need. A municipality’s fair share obligation was fixed
as a specific number of affordable housing units. Each
municipality was assigned a proportionate fair share of the
region’s need for housing based on its economic projections and
its capacity to accommodate affordable housing. A municipality
that failed to create a realistic opportunity for satisfying its
assigned fair share would leave itself vulnerable to a builder’s
remedy challenge, wherein a builder-plaintiff could bring suit
to override a municipality’s zoning autonomy and construct
affordable housing.
D.
The Third Round Rules initially were promulgated in
December 2004.2 The rule proposal published in the New Jersey
2
The Second Round Rules were due to expire in 1999. COAH did
not adopt Third Round Rules until 2004, a delay characterized by
18
Register explained that a municipality’s fair share for the
period from 1987 through January 1, 2014, would be calculated
using three criteria:
(1) a municipality’s “rehabilitation share”
based on the condition of housing revealed
in the data gathered for the 2000 Census,
previously known as a municipality’s
indigenous need; (2) a municipality’s
unsatisfied prior round obligation (1987
through 1999), satisfaction of which will be
governed by the second round rules; and (3)
a municipality’s “growth share” based on
housing need generated by statewide job
growth and residential growth from 1999
through 2014.
[In re N.J.A.C. 5:94, supra, 390 N.J. Super.
at 27.]
See also 36 N.J.R. 5748, 5750 (Dec. 20, 2004). The third
criterion was a substantial methodological departure from that
used in the prior rounds. The growth share approach –- that is,
tying a municipality’s affordable housing obligation to its own
actual rate of growth –- became the new and central criterion
for determining a municipality’s future fair share obligation.
Before exploring the nature of this approach, we detail the
procedural steps that preceded this Court’s consideration of the
the Appellate Division as “dramatic,” “inexplicable,” and
frustrating the public policies embodied by the Mount Laurel
line of cases. In re Six Month Extension of N.J.A.C. 5:91 et
seq., 372 N.J. Super. 61, 95-96 (App. Div. 2004), certif.
denied, 182 N.J. 630 (2005).
19
current challenge to COAH’s adoption of a growth share
methodological approach.
E.
In a challenge to the initial iteration of the Third Round
Rules, the Appellate Division, in a decision authored by the
Honorable Mary Catherine Cuff, sustained some but rejected many
of the specific challenges to the regulations. In re N.J.A.C.
5:94, supra, 390 N.J. Super. at 1. As summarized by the
appellate panel that considered the present appeal:
Judge Cuff’s opinion rejected
appellants’ arguments that the
“rehabilitation share” of a municipality’s
affordable housing obligation, sometimes
also referred to as present need, should
include “cost burdened” low- and moderate-
income households that reside in standard
housing and households that lack permanent
housing or live in overcrowded housing; that
COAH’s methodology for identifying
substandard housing was “arbitrary and
unreasonable”; that the third round rules
improperly eliminated the part of the first
and second round methodologies that required
reallocation of excess present need in poor
urban municipalities to other municipalities
in the region; that the use of regional
contribution agreements to satisfy part of a
municipality’s affordable housing
obligations violates the Mount Laurel
doctrine and federal and state statutory
provisions; that the allowance of bonus
credits towards satisfaction of a
municipality’s affordable housing
obligations unconstitutionally dilutes those
obligations; and that the rule relating to
vacant land adjustments violates the Mount
Laurel doctrine and the FHA.
20
However, Judge Cuff’s opinion
invalidated the parts of the original third
round rules that reduced statewide and
regional affordable housing need based on
“filtering”; adopted a growth share approach
for determining a municipality’s fair share
of prospective needs for affordable housing
and excluded job growth resulting from
rehabilitation and redevelopment in
determining job growth; compelled developers
to construct affordable housing without any
compensating benefits; authorized a
municipality to give a developer the option
of payment of a fee in lieu of constructing
affordable housing, but provided no
standards for setting those fees; and
authorized a municipality to restrict up to
50% of newly constructed affordable housing
to households with residents aged fifty-five
or over.
[In re N.J.A.C. 5:96, supra, 416 N.J. Super.
at 475-76 (citations omitted).]
Because the Appellate Division invalidated a substantial
number of the nascent Third Round Rules, the matter was remanded
to COAH for the adoption of revised Third Round Rules. In re
N.J.A.C. 5:94, supra, 390 N.J. Super. at 86-88. COAH was twice
granted extensions from its original six-month deadline and,
finally, proposed revised Third Round Rules in January 2008,
adopting those revised rules on June 2, 2008, without
significant alteration. After a number of notices of appeal
were filed, COAH proposed and subsequently adopted, on October
20, 2008, a number of amendments to the revised Third Round
Rules. See N.J.A.C. 5:96-1.1 to -20.4; N.J.A.C. 5:97-1.1 to -
21
10.5, Appendices A to F. The instant appeals followed from the
adopted Third Round Rules.
F.
1.
In the judgment under review, the Appellate Division
invalidated a substantial portion of the new regulations,
including the growth share methodology used by COAH, and
ultimately remanded for the promulgation of a new set of rules
within five months. In re N.J.A.C. 5:96, supra, 416 N.J. Super.
at 511-12. Although several of the parties have raised new
arguments before this Court, the Appellate Division’s holdings
concerning the various regulations in the Third Round Rules
comprise the bulk of the issues on appeal.
The panel initially addressed the validity of the newly
adopted growth share model, particularly as a component of
computing a municipality’s affordable housing obligation. See
N.J.A.C. 5:97-2.2, -2.4, -2.5. Under the new model, a
municipality’s obligation is the sum of (1) the rehabilitation
share, (2) the prior round obligation, and (3) the growth share.
Ibid. The panel concluded that the growth share component is
inconsistent with the Mount Laurel doctrine and expressed doubts
as to whether any growth share model could survive scrutiny
because a municipality’s obligation should not hinge on its
22
choice of whether or not to grow. In re N.J.A.C. 5:96, supra,
416 N.J. Super. at 483-85. For this reason, the panel struck
down as inconsistent with Mount Laurel II the growth share
methodology in the Third Round Rules. Id. at 485.
The panel next invalidated several other important
provisions in the Third Round Rules. First, the panel struck
down the regulations concerning the preparation of fair share
plans. Id. at 487-88; see N.J.A.C. 5:97-3.2(a)(4)(iv). Several
parties argued that the fair share plans were overly vague, but
the panel, while finding some merit to the vagueness argument,
ultimately invalidated the regulation because it was wholly
dependent on the growth share methodology. In re N.J.A.C. 5:96,
supra, 416 N.J. Super. at 487-88.
Second, the panel struck down the presumptive incentives
embodied in the regulations. Id. at 488-93; see N.J.A.C. 5:97-
6.4. Taking issue with the presumptive minimum densities and
maximum set-aside percentages, the panel concluded that the
incentives were insufficient to create a “realistic opportunity”
for the development of affordable housing. In re N.J.A.C. 5:96,
supra, 416 N.J. Super. at 493. The panel viewed the minimum
densities as too low and the maximum set-asides as too high to
properly incentivize developers. Id. at 491-93.
23
Third, the panel invalidated the provisions concerning
rental bonus credits, N.J.A.C. 5:97-3.5, and compliance credits,
N.J.A.C. 5:97-3.17. In re N.J.A.C. 5:96, supra, 416 N.J. Super.
at 493-95, 497-98. The panel took issue with COAH providing
credits to municipalities for rental units yet to be constructed
more than one decade after the prior round. Id. at 494-95.
And, the panel concluded that compliance credits neither
furthered public policy nor assisted municipalities in
fulfilling their constitutional obligations. Id. at 497-98.
On the other hand, the Appellate Division upheld several of
the regulations against party challenges. The panel concluded
that it was not constitutionally prohibited to do away with
reallocated present need. Id. at 500-02. Instead, the panel
reasoned that COAH possessed the authority to focus on a
municipality’s own obligation, see N.J.A.C. 5:97-2.4, rather
than reallocating excess present need away from those areas
overburdened with substandard housing. In re N.J.A.C. 5:96,
supra, 416 N.J. Super. at 501-02. The panel similarly dismissed
a challenge that municipalities were being forced to make direct
expenditures to satisfy their affordable housing obligations in
contravention of N.J.S.A. 52:27D-302(h), -311(d). In re
N.J.A.C. 5:96, supra, 416 N.J. Super. at 502-05. The panel
concluded that incidental impacts on municipal finances do not
24
constitute mandated expenditures and, in any event,
municipalities could petition COAH for an adjustment of their
obligations. Id. at 504-05. Finally, the panel upheld COAH’s
decision to use the prior round obligations without updating the
obligations based on actual household growth. Id. at 498-500;
see N.J.A.C. 5:97, Appendix C at 97-71.
2.
As its remedy, the panel directed COAH to use methodologies
consistent with the first two rounds. In re N.J.A.C. 5:96,
supra, 416 N.J. Super. at 511. COAH applied for a stay from the
Appellate Division, which was denied.
On December 23, 2010, COAH sought leave to apply for a stay
from this Court, arguing that it should not be required to
expend substantial resources formulating new rules that this
Court’s review might render a nullity. While that decision was
pending, Fair Share Housing Center (FSHC) moved for the
enforcement of litigant’s rights against COAH, arguing that the
agency was failing to comply with the Appellate Division’s
remand instructions. FSHC noted that COAH had cancelled a
number of its board meetings and taken no action to comply with
the Appellate Division’s remand instructions. On January 13,
2011, the Appellate Division ordered COAH to comply immediately
with its prior decision and to submit biweekly reports to enable
25
the court to monitor COAH’s continuing compliance. The
following day, this Court granted COAH’s application for a stay
of the Appellate Division opinion. Reconsideration of that
decision was denied. Our Court thereafter granted the instant
petitions and cross-petitions for certification. 205 N.J. 317(2011).
II.
A.
Because growth share is the backbone of the regulatory
scheme adopted by COAH, the regulations’ validity rises or falls
on whether the growth share approach adopted in the revised
Third Round Rules is permissible. That core issue permeates the
arguments of the parties, and the amici, in this appeal.
COAH, in its petition seeking reversal of the Appellate
Division judgment, urges this Court to look favorably on
allowing a new growth share methodology. In addition to its
defense of the adequacy of its rulemaking record, COAH argues
that the specificity of Mount Laurel II should not preclude a
growth share methodology, which is an innovative and valid
administrative response to current conditions in the state,
notably the dearth of vacant, developable land. That scarcity
makes a growth share approach particularly appealing as the
methodology promotes redevelopment rather than continued sprawl.
26
The New Jersey State League of Municipalities (League)
contends that binding COAH to the use of a nearly thirty-year-
old methodology is a mistake in light of changed circumstances.
Although the League finds deficiencies in the formulas utilized
by COAH, it nonetheless advocates for a growth share approach as
“a viable and appropriate method [for] municipalities to satisfy
their constitutional obligation.”
Also before the Court is a petition for certification filed
by Clinton Township and ten other municipalities (collectively
the Eleven Municipalities).3 The Eleven Municipalities argue
that this Court either should create a simplified growth share
model as the sole means of allocating and satisfying affordable
housing obligations or, alternatively, affirm that growth share
is a permissible methodology and send the matter back to COAH.
The Eleven Municipalities assert that the current system of
implementing Mount Laurel obligations is unsustainable and urge
this Court to consider simply assigning prospective need and
obligation at ten percent of a municipality’s future residential
growth with certain safety valves. Insofar as the Mount Laurel
3
The parties are: Clinton Township; Bedminster Township;
Bernards Township; Township of Bethlehem; Town of Clinton;
Greenwich Township; Montgomery Township; Borough of Peapack and
Gladstone; Readington Township; Borough of Roseland; Union
Township, Hunterdon County; and Marvin J. Joss, a New Jersey
resident.
27
II decision militates against its ten-percent proposal, the
Eleven Municipalities would have this Court reassess that
decision. Finally, the Eleven Municipalities find flaws in the
formulas and data used by COAH in implementing the Third Round
Rules.
Middletown Township argues that this Court should overturn
or reassess Mount Laurel II. Additionally, Middletown argues
that COAH should provide a safety valve to help overburdened
municipalities comply with their large affordable housing
obligations.
FSHC petitions this Court to alter the remedy –- a remand
to COAH -- entered by the Appellate Division. At the core of
its argument, FSHC maintains that any growth share approach is
inconsistent with the Mount Laurel constitutional obligation as
implemented by this Court and in the FHA. FSHC urges the Court
to “appoint a special master, require bi-monthly reporting by
COAH, require the special master to calculate the need numbers
according to the Appellate Division’s requirements if COAH does
not act, and accelerate any appeals from the regulations that
are adopted.” FSHC asks this Court to make clear that if COAH
is unable to adopt valid regulations by some date certain, the
Court should reassume exclusive responsibility for administering
and enforcing the Mount Laurel doctrine.
28
Finally, several briefs in opposition to certification were
filed, which supported the Appellate Division’s rejection of
COAH’s new growth share approach. The New Jersey Builders
Association, the New Jersey Chapter of the National Association
of Industrial and Office Properties, MTAE, Inc., and Kenneth and
Alice Martin each contend that the Appellate Division opinion is
a direct application of existing precedent and is consistent
with this Court’s statements in Mount Laurel II. Further,
numerous amici4 ask this Court to affirm the Appellate Division’s
decision and to impose the same remedy: a remand to COAH with
direction to use a methodology similar to that used in the prior
rounds.
With that lineup of positions, we turn to examine the key
concept of growth share.
B.
4
The following amici curiae participated in this appeal: The
Corporation for Supportive Housing and Supportive Housing
Association of New Jersey; New Jersey Future, American Planning
Association, American Planning Association-New Jersey Chapter,
and the Housing & Community Development Network of New Jersey;
New Jersey State Conference of the National Association for the
Advancement of Colored People and Latino Action Network; The
International Council of Shopping Centers; Pennsauken Township
and Township of Montclair; American Civil Liberties Union of New
Jersey Foundation; Catholic Charities, Diocese of Camden, Inc.,
Catholic Charities, Diocese of Metuchen, Catholic Charities,
Diocese of Paterson, and Catholic Charities, Diocese of Trenton;
Legal Services of New Jersey.
29
In 1997, the concept of “growth share” was advocated5 as an
alternative approach to the methodologies used in the First and
Second Round Rules. See generally John M. Payne, Remedies for
Affordable Housing: From Fair Share to Growth Share, Land Use L.
& Zoning Dig., June 1997, at 3, 3. Under a growth share
methodology, a municipality’s constitutional obligation “would
be a simple . . . allocat[ion of] a share of whatever growth
actually occurs to low- and moderate-income housing.” Id. at 6
(emphasis in original). According to Professor Payne, growth
share needed to capture both residential and nonresidential
growth,6 as well as new development and redevelopment. Ibid.
Municipalities would meet their obligations by “requir[ing] an
inclusionary Mount Laurel component in any large-scale
developments as they are approved” and by collecting development
fees from smaller developments that would be used to subsidize
affordable housing elsewhere. Id. at 7 (citing Holmdel
Builder’s Ass’n v. Twp. of Holmdel, 121 N.J. 550, 576, 585
(1990) (authorizing development fees, explaining that they are
5
The late Professor John Payne of Rutgers School of Law –
Newark, who advocated for the affordable housing remedies
imposed by the Court in Mount Laurel II, advanced the concept of
growth share.
6
In a hypothetical, Professor Payne suggested that twenty-five
percent of market-rate growth should be allocated to affordable
housing. Id. at 7 & n.3. That is a 4:1 ratio, the same as that
selected by COAH in its revised Third Round Rules.
30
“functional[ly] equivalent [to] mandatory set-aside schemes
authorized by Mount Laurel II and the FHA”)). Subsidies and
regulation of the private market also would supplement those
approaches. Id. at 8.
Professor Payne reasoned:
By tracking growth, rather than trying to
predict it through an impossibly inaccurate
formula, growth share solves many of the
problems of the present fair share formula.
By definition, it measures the capacity of
the private sector to meet part of the need
for low- and moderate-income housing,
because it is an objective measure of what
economic activity actually takes place.
Moreover, by allocating fair share
obligations after presumptively sound
planning decisions have been made by
responsible public officials, Mount Laurel
compliance would proceed in a much healthier
political environment.
[Id. at 7.]
Thus, as proposed, a growth share approach was envisioned as a
straightforward allocation method where a municipality would
accrue affordable housing obligations as a percentage of the
residential and nonresidential growth that occurred within its
borders. See id. at 6-7.
When COAH adopted its first iteration of the Third Round
Rules in 2004, see generally N.J.A.C. 5:94 to 5:95, the agency
included the growth share approach as the sole method for
calculating a municipality’s prospective affordable housing
31
obligation. See N.J.A.C. 5:94-2.4, -2.5. That set of
regulations, however, also continued to hold a municipality
responsible for its rehabilitation share and its prior round
obligations. N.J.A.C. 5:94-1.2.
According to the regulations adopted by COAH, a
municipality would accrue an obligation to construct one unit of
affordable housing for every eight market-rate units constructed
and one unit of affordable housing for every twenty-five jobs
created. N.J.A.C. 5:94-2.4. Job growth was calculated by
applying a conversion factor to the gross square footage of
nonresidential development constructed. N.J.A.C. 5:94, Appendix
E at 94-86. The 8:1 and 25:1 growth share ratios were selected
by COAH so that affordable housing construction would match
adjusted projected need.7 Ibid.
After the Appellate Division required COAH to adopt new
regulations,8 the agency revised the Third Round Rules. Under
7
Adjusted projected need was calculated by adjusting the total
projected need based on various secondary sources, including
demolitions, filtering, residential conversion, and publicly
assisted housing creation. N.J.A.C. 5:94, Appendix A at 94-46.
8
When those rules were initially challenged, Judge Cuff found
that COAH had not shown that sufficient vacant developable land
existed in each region such that the growth share ratios would
generate sufficient housing to meet the regional need. In re
N.J.A.C. 5:94, supra, 390 N.J. Super. at 52-54. In addition,
the panel observed that COAH’s growth share approach placed no
check on municipalities to prevent them from adopting zoning
32
the Third Round Rules, municipalities accrue growth share
obligations at the rate of one unit of affordable housing for
every four new residential units and one unit of affordable
housing for every sixteen newly created jobs. N.J.A.C. 5:97-
2.2(d), -2.4; N.J.A.C. 5:97, Appendix D. Those ratios were
formulated by estimating the state’s projected overall
affordable housing need, estimating the projected employment and
residential growth in the state, and then calculating how many
units of affordable housing per each projected new job and
housing unit would be necessary to meet the state’s affordable
housing need. See N.J.A.C. 5:97, Appendix A at 97-48.5 to -
48.6. As counsel for COAH confirmed at oral argument before
this Court, the calculation of affordable housing need did not
include region-specific data. Thus, the ratios used in the
growth share methodology have homogenized the state’s need for
affordable housing and have failed to reflect the specific needs
for low- and moderate-incoming housing in different regions of
our state.
regulations that would retard growth. Id. at 55-56. The panel
remanded the case to COAH to adopt new rules within six months.
Id. at 88. The agency ultimately issued the revised Third Round
Rules in June 2008.
33
Specifically, COAH projected a total need of 131,297 units,9
a figure which was reduced by 15,631 units to account for
secondary sources of supply, including filtering, residential
conversion, and demolitions. Id. at 97-48.5, -51 to -53. Thus,
COAH calculated an adjusted projected statewide need for
affordable housing of 115,666 units. Id. at 97-51, -53. COAH
utilized data showing housing unit growth would be 314,06910 and
job growth would be 791,465 for the relevant time period. Id.
at 97-48.5, -55. After assigning fifty-seven percent of the
projected affordable housing need to projected housing unit
growth, and forty-three percent of the projected affordable
housing need to projected employment growth, COAH determined
that the ratios of one affordable housing unit for four market-
9
Total need for low- and moderate-income affordable housing was
ascertained by determining the additional need for low- and
moderate-income households in 2018 as compared to 1999.
N.J.A.C. 5:97, Appendix A at 97-48.5 to -51. That figure was
primarily based on the estimate of additional housing units that
would exist in 2018 -- 377,190 -- and the assumption that the
number of low- and moderate-income households would remain
constant at 37.7 percent. Id. at 97-45 to -49. However, those
figures were adjusted to compensate for vacant housing units,
persons with low incomes who had substantial assets and had paid
off their mortgages, and persons living in group quarters. Id.
at 97-49 to -51.
10
This figure adds together the projected number of additional
housing units (for 2018 as compared to 2004) and the projected
number of replacement units, and then subtracts from that total
the units necessary to deliver prior round obligations to avoid
double counting. N.J.A.C. 5:97, Appendix A at 97-48.5, -54 to
-55.
34
rate housing units produced and one affordable housing unit for
every sixteen jobs created would produce the necessary
affordable housing. Id. at 97-48.5, -55.
With those ratios, COAH calculated each municipality’s
projected growth share obligation by predicting household and
employment growth for each municipality based on the “historical
trends for each municipality and the extent to which each
municipality approaches its physical growth capacity.” N.J.A.C.
5:97-2.2(d); see also N.J.A.C. 5:97, Appendix F (displaying
household and employment projections).
Although COAH initially calculates a municipality’s
projected growth share obligation, as the Appellate Division
decision by Judge Skillman rightly notes, a municipality only
incurs growth share obligations to the extent that growth
actually occurs.11 See N.J.A.C. 5:97-2.2(e) (“Affordable housing
shall be provided in direct proportion to the growth share
obligation generated by the actual growth.”); N.J.A.C. 5:97,
11
Despite regulatory statements suggesting the contrary, see
N.J.A.C. 5:97-2.2(e) (stating that if actual growth is less than
projected growth, municipalities must still “continue to provide
a realistic opportunity for affordable housing to plan for the
projected growth share through inclusionary zoning or any of the
mechanisms permitted by N.J.A.C. 5:97-6”); N.J.A.C. 5:97-2.5(e)
(using nearly identical language), COAH confirmed at oral
argument that the regulations intended to hold municipalities
responsible for creating affordable housing units consistent
with only their actual growth.
35
Appendix A at 97-56 (“In sum, municipalities incur obligations
to provide affordable housing only when and to the extent growth
occurs. Each municipality’s current round affordable housing
obligation is based on actual growth . . . .”(emphasis in
original)). COAH’s biennial review process ensures that
projected growth share obligations are replaced with obligations
that are “in proportion to the actual residential growth and
employment growth in the municipality.” N.J.A.C. 5:96-10.1(a);
see also 40 N.J.R. 5965(a), 5994 (Oct. 20, 2008) (“The
projection of growth share is to be used as a planning tool to
establish reasonable targets. . . . The actual obligation will
be determined based upon what actually occurs and adjustments
will be made during biennial plan reviews.”). Thus, even if a
municipality were allocated a large projected growth share
obligation, if growth fell below that rate, its actual growth
share obligation would be reduced to reflect that slowed
residential and job growth.12 That result is facially
inconsistent with the FHA’s command to COAH to develop criteria
establishing municipal determinations of present and prospective
fair share of housing that results in firm, fair share
12
By contrast, a municipality that grew more than projected
would incur an obligation for more affordable housing than
originally projected based on its substantial growth.
36
allocations, see N.J.S.A. 52:27D-307, against which the
municipality’s housing element may be designed, N.J.S.A. 52:27D-
310, and reviewed for substantive certification purposes,
N.J.S.A. 52:27D-313, -314. It is also at odds with the remedy
adopted in Mount Laurel II, which imposed definitive
quantitative obligations to be fulfilled within fixed periods.
C.
1.
With respect to the Mount Laurel II remedy, we felt obliged
in view of the municipal inertia toward allowing affordable
housing, through exclusionary zoning practices, to compel the
building of units in anticipation of projected regional need as
well as present need. Mount Laurel II, supra, 92 N.J. at 243-
44. We conceived of the prospective regional need for
affordable housing as an ascertainable figure to be calculated
prior to determining specific municipal obligations. Id. at
248. The growth share approach in COAH’s Third Round Rules is
not premised on region-specific housing data evidencing the
region’s need. See supra at ___ (slip op. at 31-34). Nor is
growth share as presently adopted structured to establish a firm
obligation in respect of prospective affordable housing need.
See supra at ___ (slip op. at 34-36). In those respects, the
methodology is inconsistent with the remedy that we crafted in
37
Mount Laurel II, but our analysis cannot, and does not, end
there.
2.
As argued in this matter, the present approach has been
criticized as having produced a labyrinth of administrative
processes, which has led to stagnation in defining municipal
obligations, as having failed to reduce litigation, and as
having promoted turmoil instead of certainty in planning.
Further, parties contend that it has led to unwarranted
hostility toward inclusionary zoning.
More than thirty years have passed since this Court
outlined a framework through which municipalities could satisfy
their obligation to provide a fair share of the regional
prospective need for affordable housing in Mount Laurel II. We
now have decades of data on the creation of affordable housing
in New Jersey. The present approach has had demonstrable
success at producing affordable housing. Although estimates
vary depending on the source, approximately 36,000 to 60,000 new
low- and moderate-income units have been developed between 1985
and 2010. Compare David N. Kinsey, Smart Growth, Housing Needs,
and the Future of the Mount Laurel Doctrine, in Mount Laurel II
at 25: The Unfinished Agenda of Fair Share Housing 57 (Timothy
N. Castano & Dale Sattin eds., 2008) [hereinafter The Unfinished
38
Agenda] (relying on COAH records), with N.J. Housing Opportunity
Task Force, Findings & Recommendations 2 (2010) [hereinafter
Taskforce Findings & Recommendations]. Additionally,
approximately 15,000 substandard units have been refurbished,
and $210 million has been generated “from suburban sources to
apply to urban housing.” Preface, The Unfinished Agenda, supra,
at 1.
We also have data on general trends in population size and
the production of housing units. The statewide population and
number of housing units have steadily increased from the 1980s.
According to the United States Census Bureau’s 2010 Census, the
New Jersey population increased from 7.37 million to 8.79
million over the last thirty years -- a nineteen percent
increase from 1980 to 2010. See U.S. Census Bureau, New Jersey:
2010, Population and Housing Unit Counts at Table 4 (Aug. 2012),
available at http://www.census.gov/prod/cen2010/cph-2-32.pdf.
And, the number of housing units increased from 2.77 million to
3.55 million -- a twenty-eight percent increase in the same time
period. See ibid. These data reveal that housing has been
developed at a quicker pace than population growth in New
Jersey.
Moreover, experts in the field have analyzed housing
development trends in urban and rural areas. In 1992, the State
39
Planning Commission introduced the State Development and
Redevelopment Plan (State Plan), which “prescribed patterns of
development and conservation . . . with precise mapping.” See
Kinsey, Smart Growth, in The Unfinished Agenda, supra, at 48.
The State Plan categorized different types of planning areas:
“metropolitan, suburban, fringe, rural, and environmentally
sensitive planning areas, [each] with different delineation
criteria and policies.” Ibid. Despite the different planning
categories and the implementation of affordable housing
regulations, “about 40 percent of new growth [between 1995 and
2002] took place in the State Plan’s rural and environmentally
sensitive planning areas, rather than being channeled into
growth areas and centers.” Id. at 49.13
Transportation patterns also have changed significantly
since the 1980s. In 1980, the average daily commute was
approximately twenty minutes, while today the average commute
has grown to thirty-two minutes, indicating New Jerseyans’
13
Since this Court’s Mount Laurel I decision, the Legislature
has enacted a variety of environmental statutes, including the
Pinelands Protection Act, N.J.S.A. 13:18A-1 to -58, the Right to
Farm Act, N.J.S.A. 4:1C-1 to -10.4, the Freshwater Wetlands
Protection Act, N.J.S.A. 13:9B-1 to –30, the Garden State
Preservation Trust Act, N.J.S.A. 13:8C-1 to -42, and the
Highlands Water Protection and Planning Act, N.J.S.A. 13:20-1 to
-35. See Taskforce Findings & Recommendations, supra, at 5.
These statutes, taken collectively, invariably have influenced
new home development.
40
willingness to travel farther from home for work. See Taskforce
Findings & Recommendations, supra, at 3. Finally, a number of
significant road projects have been completed since the 1970s:
Interstate 280, Interstate 195, and Interstate 287. Id. at 5.
Moreover, external economic factors have influenced the
development of housing in New Jersey. The economic collapse of
2008 has had a significant impact on home prices, with home
prices in New Jersey falling by “10 to 20 percent, sometimes
even 25” percent in 2009. Antoinette Martin, A Market Going
Downhill Fast, N.Y. Times, Feb. 22, 2009, at NJ1.
When we issued our decision in Mount Laurel II, we could
not have predicted the precise economic and social changes of
the last three decades.
3.
Knowing now the changes wrought over the past three
decades, we are compelled to acknowledge that there may well be
other effective remedies that would promote inclusionary zoning
at the local level, consistent with business and residential
objectives, as well as statewide sound-planning objectives,
which take into account industrial development, transportation
and infrastructure availability, and environmental
considerations. Certainly, the methodology of the prior rounds
is a proven method of creating a substantial amount of
41
affordable housing, and growth share is an untested approach
that assumes municipalities will not utilize their discretion to
undercut the production of affordable housing. That is not to
say that another approach could not do as well or better. We do
not know. A growth share approach, for example, might prove to
be successful in addressing prospective need, and it might bring
greater transparency to the process and engender a more
favorable climate for the creation of affordable housing. Those
positives are not to be undervalued.
Although the judicial remedy of Mount Laurel II, as adopted
in the FHA, addressed the circumstances of the times, it is not
necessarily the only remedy possible for achieving satisfaction
of a municipality’s constitutional obligations for prospective
need. We do not view our pronouncement -- that the remedy set
forth by this Court and embraced in the FHA was constitutionally
acceptable -- as enshrining that particular approach as the be-
all-and-end-all of remedies for the future. See, e.g., Mount
Laurel II, supra, 92 N.J. at 352 (explaining that when
legislative action is taken, “we have always preferred
legislative to judicial action in this field”). Despite the
decisional focus at that time on assessing a definite allotment
of prospective regional need that must be produced within a
specific time, we did not know then how that would practically
42
unfold. Having lived with the present methodology for decades
now, the record suggests that there might be reasonable bases
for considering alternative approaches to promote the production
of affordable housing consistent with present statewide-planning
and other principles previously identified.
And, just as words matter, numbers matter too. Applying a
growth share approach, for example, might have produced over the
past thirty years roughly the same number of affordable housing
units that the present allocation method has produced.14
Although a growth share approach might not have produced units
in the same regions or municipalities where they occurred, we
14
Although the exact numbers are in some dispute, a recent COAH
document, based on a compilation of the information provided by
municipalities, states that 60,242 new affordable housing units
have been created, and 14,854 affordable housing units have been
rehabilitated statewide. COAH, Proposed and Completed
Affordable Units 11 (Mar. 1, 2011), available at
http://www.state.nj.us/dca/services/lps/hss/transinfo/reports/un
its.pdf. The numbers are not staggering and might well have
come into being based on the sheer amount of development that
this state experienced during the same period of time.
Additionally, tens of thousands affordable new and rehabilitated
units have been planned, but not yet constructed. See ibid. On
the other hand, there is evidence from other jurisdictions that
growth-share-type approaches have proven successful at creating
affordable housing. See N.J.A.C. 5:97, Appendix F at 97-223 to
-228. We recognize, however, that none of those programs are
directly comparable; most are mandatory residential set-aside
requirements that have less ambitious affordable housing ratios
and a narrower scope than COAH’s growth share rules. See ibid.43
cannot say that it is anathema to consider some form of such an
approach adjusted for present-day building realities.
To be sure, deterring exclusionary municipal zoning
practices and concomitantly encouraging development of
affordable housing in housing regions where it is needed were
the goals of the obligation recognized under the General Welfare
Clause of the New Jersey Constitution. See Mount Laurel II,
supra, 92 N.J. at 352 (concluding that constitutional obligation
requires municipalities “to provide a realistic opportunity for
housing” for low- and moderate-income persons in our state).
How to respond to the constitutional obligation imposed on
municipalities in the exercise of their delegated power to zone
is a separate question, and one that might be adequately
addressed in different ways tailored to today’s circumstances.
See supra at ___ (slip op. at 8-12). We therefore recognize,
and hold, that the constitutional obligation identified in Mount
Laurel I and refined and made applicable to all municipalities
in Mount Laurel II is distinct from the judicial remedy that
this Court embraced.
Development merely for development’s sake is not the
constitutional goal. Mount Laurel II, supra, 92 N.J. at 238(“The Constitution of the State of New Jersey does not require
bad planning. It does not require suburban spread. It does not
44
require rural municipalities to encourage large scale housing
developments.”); id. at 211 (“But if sound planning of an area
allows the rich and middle class to live there, it must also
realistically and practically allow the poor. And if the area
will accommodate factories, it must also find space for workers.
The specific location of such housing will of course continue to
depend on sound municipal land use planning.”). Nor are all
aspects to the remedy fashioned in Mount Laurel II indispensable
components of a remedy for the future. One can envision
alternative approaches that, perhaps, might relegate a builder’s
remedy to a more reserved status among available solutions to
encouragement of construction of affordable housing, reducing
the political turmoil that has plagued voluntary compliance with
the constitutional goal of advancing the delivery of affordable
housing. See Payne, supra, Land Use L. & Zoning Dig., June
1997, at 6.
Other aspects to the judicial remedy might benefit from re-
examination. For example, our remedy’s utilization of a pre-
fixed allocation of municipal obligations based on forecasted
projected growth has been criticized for the crudeness inherent
whenever one presumes to anticipate development cycles. Id. at
6-7. We do not pretend to know what form or forms of
alternative remedies might be devised that would suitably
45
further the constitutional goal of addressing the prospective
need for affordable housing. But, that should not prevent
policymakers from considering the benefits of an alternate
remedy that accounts for current economic conditions, the
building that has occurred already in this state, the present-
day space availability and redevelopment options, and the wisdom
of requiring building in all municipalities of the state within
fixed periods. Those are questions for policymakers -- should
our Legislature choose to address the topic.
Certainly, tools must remain in place to deal with those
municipalities that would affirmatively choose not to grow –-
either commercially or residentially –- in order to avoid having
any inclusionary zoning obligation. Mandated requirements for
the production of definite numbers of affordable housing units
may prove to be the only way to address those municipalities
that heretofore have avoided their affordable housing
obligations.15 But, the record before this Court did not include
15
Indeed, under a “pure” growth share approach as originally
espoused by Professor Payne, the methodology appears to entirely
forgive municipalities their prior round obligations, thus
rewarding those municipalities that have managed to evade the
COAH process through delay or other bad faith tactics. See
Payne, supra, Land Use L. & Zoning Dig., June 1997, at 6-9.
Furthermore, it would permit a municipality to remain wholly
exclusionary by choosing not to grow. Id. at 9.
A pure growth share approach has its flaws, which some have
suggested potentially could be of constitutional dimension. See
46
evidence or data that such municipal action would take place,
and we are wont to agree with those that assert that
circumstances of such utter recalcitrance are not common at
present. Nor do we believe that we should presume the worst and
deal with that worst-case scenario as if all municipalities
would act similarly. To be sure, our courts will enforce the
constitutional obligation if evidence is presented to us of
municipalities zoning in exclusion of the general welfare of the
citizens of our state. See N.J. Const. art. I, ¶ 1.
In sum, the judicial remedy that was fashioned based on a
record created thirty years ago should not be viewed as the only
one that presently can secure satisfaction of the constitutional
obligation to curb exclusionary zoning and promote the
development of affordable housing in the housing regions of this
state. Assuming that ordered development will continue to be
used as a tool in the delivery of affordable housing, the
Legislature should determine how best to utilize that means in
John M. Payne, The Unfinished Business of Mount Laurel II, in
The Unfinished Agenda, supra, at 5-19. In contrast, the revised
Third Round Rules are a hybrid approach, based on actual growth,
with both residential and nonresidential components. The rules
constitute a hybrid methodology because they continue to hold
municipalities responsible for their rehabilitation share and
for prior round obligations.
47
the promotion of affordable housing suited for the needs of
housing regions.
D.
In light of our clarification that the judicial remedy
imposed in Mount Laurel II is not a straightjacket to
legislative innovation for satisfaction of the constitutional
obligation, the Third Round Rules’ validity hinges on whether
they are consistent with the FHA.
The FHA sets forth the framework of a remedy that precludes
COAH from taking the liberty to fashion a new growth share
methodology that 1) allows for the devising of residential and
commercial affordable housing ratios for projected need that are
not tied to a regional need for affordable housing, and 2)
leaves open-ended how or whether projected need for a housing
region will be fulfilled. The FHA is replete with references
tying affordable housing obligations to a region, not
obligations formed on a statewide basis. And, it requires a
specifically allotted number of units for satisfaction of both
present and prospective need based on a housing region.
The FHA defines “prospective need” as “based on development
and growth which is reasonably likely to occur in a region or a
municipality.” N.J.S.A. 52:27D-304(j) (emphasis added). A
“housing region” is specifically defined as “a geographic area
48
of not less than two nor more than four contiguous, whole
counties which exhibit significant social, economic and income
similarities.” N.J.S.A. 52:27D-304(b). It is not a statewide,
geographic area.
The Legislature also declared that “low income housing”
must be provided to those households meeting the low-income
standard “within the housing region.” N.J.S.A. 52:27D-304(c).
Although COAH has broad power under N.J.S.A. 52:27D-307, its
duties must be consistent with the FHA’s working premise that
affordable housing obligations for present and prospective need
for low- and moderate-income housing be determined at regional
levels. See N.J.S.A. 52:27D-307(a) (requiring COAH to
“[d]etermine housing regions”), (b) (requiring COAH to
“[e]stimate the present and prospective need” at both “State and
regional levels”), and (c) (authorizing COAH to establish
criteria and guidelines for municipalities tethered to regional
housing need).
Furthermore, even when COAH is placing an aggregate limit
on a municipality’s allocation of units, a distinct allocation
nevertheless is to be made based on the housing “region’s
present and prospective need.” N.J.S.A. 52:27D-307(e). A
municipality’s provision of its fair share, as presented in its
housing element, may involve a variety of techniques, but there
49
must be demonstrated a realistic opportunity for providing
affordable housing within the municipality. N.J.S.A. 52:27D-
311(a). The housing element is reviewed under that same
standard, see N.J.S.A. 52:27D-313, and the municipality’s
achievement of substantive certification can only come from
having a fair share plan “not inconsistent with achievement of
the low and moderate income housing needs of the region,”
N.J.S.A. 52:27D-314(a).
Although Section 307 of the FHA permits COAH to adjust
prospective need methodology and resulting estimations based on,
among other things, decisions of other branches of government,
we disagree that Section 307’s oblique reference authorizes
COAH, as an executive branch agency, to rewrite such core
aspects of its enabling legislation, which are premised on an
allocation basis for prospective need within a housing region.
That argument is misguided. It defies the express language of
Section 307, which requires the State Planning Commission to
continue to provide updated information on “economic growth,
development and decline projections for each housing region.”
N.J.S.A. 52:27D-307; see N.J. Dep’t Envtl. Prot. v. Huber, 213
N.J. 338, 365 (2013) (explaining that “we must examine th[e
statute’s plain] language sensibly, in the context of the
overall scheme in which the Legislature intended the provision
50
to operate” (citation omitted)). Such an unprecedented, open-
ended delegation of authority to an administrative agency is an
illogical application of Section 307’s language.
This Court has recognized that, while COAH enjoys a breadth
of discretion when selecting methodologies to implement the FHA,
the agency may not dilute its duty to adopt regulatory methods
that are consistent with statutory goals. See Warren, supra,
132 N.J. at 27 (citing Van Dalen, supra, 120 N.J. at 246). COAH
must not, “under the guise of interpretation,” enact regulations
that are “plainly at odds with” the FHA. In re Freshwater
Wetlands Prot. Act Rules, 180 N.J. 478, 489-91 (2004) (internal
quotation marks and citation omitted) (invalidating Department
of Environmental Protection regulations concerning construction
near wetlands transition areas as inconsistent with enabling
statute and ultra vires); see also, e.g., Kingsley v. Hawthorne
Fabrics, Inc., 41 N.J. 521, 529-30 (1964) (invalidating Division
of Taxation regulation defining “immediate family” as
inconsistent with enabling statute, noting that “if the
regulation attempts to add to the statute something which is not
there, it can furnish no sustenance to the statute”); In re
Centex Homes, LLC, 411 N.J. Super. 244, 252, 267-68 (App. Div.
2009) (invalidating Board of Public Utilities regulations
governing service extensions, noting that “when regulations are
51
promulgated without explicit legislative authority and implicate
‘important policy questions,’ they are better off decided by the
Legislature” (quoting Borough of Avalon v. N.J. Dep’t of Envtl.
Prot., 403 N.J. Super. 590, 607 (App. Div. 2008), certif.
denied, 199 N.J. 133 (2009), and citing Burlington Cnty.
Evergreen Park Mental Hosp. v. Cooper, 56 N.J. 579, 598-99
(1970)). The policy adopted by the Legislature in the FHA
cannot be ignored or rewritten by COAH to the degree that COAH
has done through its wholly new growth share methodology in the
Third Round Rules.
The FHA set a course that tracked the Mount Laurel II
allocation methodology for satisfaction of present and
prospective need based on housing region. COAH was not free to
abandon that approach. Nor are we free to ignore the
legislative choice.16 The FHA embodies the remedial approach
16
To the extent that the dissent maintains that the Third Round
Rules’ failure to address regional need is permissible under the
FHA, such an interpretation runs afoul of the FHA’s express
references to regional housing need as the linchpin for
calculating municipal obligations. The FHA, which the dissent
agrees codified the Mount Laurel decisions, is replete with
examples of how sound planning principles must be employed
contingent on a municipality satisfying its fair share of a
region’s need for low- and moderate-income housing. See supra
at ___ (slip op. at 48-49). Indeed, the legislative findings
highlight the FHA’s regional approach as the Legislature’s
choice. See N.J.S.A. 52:27D-302(e) (permitting municipalities
to “adopt appropriate phasing schedules for meeting their fair
share, so long as the municipalities permit a timely achievement
52
applicable in this state at this time. See Warren, supra, 132
N.J. at 28 (explaining that where regulation is contrary to
legislative policies underlying agency’s implementing statute or
where regulation “does not comport with [the statute’s] central
purpose,” it will be invalidated); Toll Bros., supra, 173 N.J.
at 572-73) (explaining that although it is preferred to
harmonize judicial action with COAH’s regulatory determinations,
“that deference was not intended to ‘dilute COAH’s duty to adopt
regulatory methods that are consistent with the statutory
goals’” (quoting Warren, supra, 132 N.J. at 27-28)).
To sum up, the Legislature has to enact an alternative
remedy -- such as some version of the one proposed by COAH in
the Third Round Rules -- in order for that remedy to be
statutorily permissible. The FHA’s language is an impediment to
COAH’s unilateral decision to devise a wholly new approach to
determining fair share. COAH may implement the FHA’s scheme,
not come up with a wholly new one. See ibid. The FHA does not
authorize COAH to rewrite its substantive provisions. That
power was not conferred through the FHA’s inclusion of
provisions containing vague references about COAH’s general
authority to implement the FHA.
of an appropriate fair share of the regional need for low and
moderate income housing”).
53
The Legislature may determine to authorize new avenues for
addressing regional need and the promotion of affordable
housing. And, it may do so in ways that we do not attempt to
circumscribe in this opinion because we do not know the breadth
of considerations that may be brought forth through
informational legislative hearings on the subject.
Nevertheless, it is the Legislature that must devise the
parameters to such an approach. It must craft new legislation
if that is the course it wishes to take. Our courts can and
should exercise caution and defer to such solutions when
appropriately drafted by the Legislature. See N.J. Ass’n on
Correction v. Lan, 80 N.J. 199, 220 (1979) (acknowledging
importance of deference to legislative enactments addressing
general welfare (citation omitted)); Roe v. Kervick, 42 N.J.
191, 230 (1964) (recognizing value of deference when reasonable
minds could differ and issue to be remedied “involves a concept
which varies with the needs of the times”).
Although the Legislature may consider enacting an
alternative form of remedy for the promotion of affordable
housing in the housing regions of this state, see Hills, supra,103 N.J. at 65 (“No one should assume that our exercise of
comity today signals a weakening of our resolve to enforce the
constitutional rights of New Jersey’s lower income citizens.
54
The constitutional obligation has not changed; the judiciary’s
ultimate duty to enforce it has not changed; our determination
to perform that duty has not changed.”), enforcement of the
constitutional obligation is still a matter that may be brought
to the courts.
III.
A.
With the declaration that the growth share methodology is
inconsistent with the FHA and thus COAH’s regulations ultra
vires, we briefly address the other numerous challenges to the
Third Round Rules in this consolidated appeal. The challenges
share a common theme of expressing various views on the growth
share methodology on which municipal obligations would be based
in the third round. In our view, the Third Round Rules are
inextricably linked to the new growth share methodology that is
incompatible with current FHA requirements. The growth share
pillar to the Third Round Rules’ allocation of municipal
obligations is not severable, notwithstanding the severability
clause contained in the regulations at N.J.A.C. 5:97-1.3. See
Affiliated Distillers Brands Corp. v. Sills, 60 N.J. 342, 345
(1972) (“Severability is a question of legislative intent. That
intent must be determined on the basis of whether the
objectionable feature of the statute can be excised without
55
substantial impairment of the principal object of the
statute.”).
For example, the procedural rules, in subchapters (2) and
(3) of N.J.A.C. 5:96, which describe the filing requirements for
a municipality’s housing element and Fair Share Plan, and the
subsequent, substantive certification that a municipality can
seek from COAH, have inherent in them satisfaction of prior
round, rehabilitation share, and growth share obligations. They
cannot stand as adopted. Similarly, the enforcement provisions
of subchapter (10) of N.J.A.C. 5:96, as well as the monitoring
provisions of subchapter (11), become impractical because those
agency powers are tied to evaluation and satisfaction of
affordable obligations, including those obtained via growth
share. See N.J.A.C. 5:96-10.4(a).
Equally, the substantive regulations codified in N.J.A.C.
5:97 are tied to municipalities’ housing element plans. See
N.J.A.C. 5:97-2.0 to -2.5. Subchapter 3 also is replete with
explanations of how, among other things, a fair share plan,
N.J.A.C. 5:97-3.2, a rental housing requirement, N.J.A.C. 5:97-
3.4, rental bonuses, N.J.A.C. 5:97-3.5, -3.6, and -3.7, and
other bonuses operate in conjunction with growth share, see,
e.g., N.J.A.C. 5:97-3.20 (discussing cap on bonus credits as
percentage of projected growth share obligation). Subsection 5
56
has similar difficulty surviving. See N.J.A.C. 5:97-5.6
(allowing municipality to petition for adjustment of projections
underlying growth share), -5.7 (addressing potential growth
share opportunities and is intertwined with -5.6), and -5.8
(setting 1000 unit cap on growth share).
Thus, the growth share methodology’s intertwinement with
the entire regulatory program is inseparable from the new
regulatory scheme fashioned by COAH for municipal third-round
obligations and how they may be satisfied because it is so
pervasively woven into the entire regulatory program that it
cannot be surgically removed. See Wash. Nat’l Ins. Co. v. Bd.
of Review of N.J. Unemployment Comp. Comm’n, 1 N.J. 545, 556
(1949) (“[T]here must be such manifest independence of the parts
as to clearly indicate a legislative intention that the
constitutional insufficiency of the one part would not render
the remainder inoperative.”). It requires that the regulations
be invalidated and new regulations for the third round be
adopted. Because we hold today that a growth share approach is
incompatible with the FHA, we need not delve further into the
differences among the challengers’ arguments about growth share
as presented in their petitions.
Concerning some parties’ argument before this Court that
subchapter 6 (zoning for inclusionary developments), does not
57
appear tied to a growth share approach, we conclude that such an
argument sounds in policy. As such, it is better advanced to
the policymakers: either to the Legislature, which may choose
to take up the question of whether to allow a new growth share
methodology, or to the agency that must adopt new regulations to
fill the void created by invalidation of the current Third Round
Rules. Rule adoption is not the role of this Court.17
With respect to the remainder of the Appellate Division’s
pronouncements on the invalidity of the Third Round Rules under
the FHA, we substantially affirm its judgment with the notable
exception of its invalidation of the provision addressing
compliance bonus credits in N.J.A.C. 5:97-3.17. As to that
provision, we express no opinion as to whether the agency’s
choice was so wide of the mark as to its assessment of what is
necessary to promote compliance. Because the rules require that
they be redone, in toto, we reserve judgment on what COAH may
choose to do in its revamped rules and will review those
judgments on the record then presented if the agency’s choice is
17
Some parties advanced policy arguments before this Court as to
how new regulatory provisions should provide for a safety valve
for inclusionary municipalities (advanced by Middletown Township
for the first time before this Court), and seeking endorsement
of a different version of growth share (advanced by the Eleven
Municipalities for the first time before this Court). Those
arguments are best advanced in the legislative arena.
58
challenged. For now, we express no opinion on the Appellate
Division’s assessment of that issue.
Our conclusion requires a new adoption of regulations to
govern the third round municipal obligations consistent with the
strictures of the FHA.
B.
Rules to govern the third round cannot wait further while
time is lost during legislative deliberations on a new
affordable housing approach. A remedy must be put in place to
eliminate the limbo in which municipalities, New Jersey
citizens, developers, and affordable housing interest groups
have lived for too long. Accordingly, we endorse the Appellate
Division’s quick deadline for reimposing third-round obligations
based on the previous rounds’ method of allocating fair share
obligations among municipalities.18 To the extent that this
18
A note on the dissent. The dissent mischaracterizes the
remedy imposed today to fill the void created by rejection of
the current Third Round Rules, which we hold are ultra vires
under the FHA. The remedy is not “drastic” or “an overhaul.”
See post at __, __ (slip op. at 13, 19). In fact, the remedy is
the remedial formula adopted by COAH, consistent with the FHA,
and one even COAH agrees can be implemented quickly. See post
at __ (slip op. at 19).
To reiterate, the FHA remains the current framework under
which COAH must operate. The Legislature may review and amend
the FHA if it so desires. Further, to the extent that the
dissent forecasts a gloomy reaction to potential legislative
change, post at __ (slip op. at 18), this Court is not in the
business of such speculation.
59
record reveals that most interested parties do not wish for that
method to last for long, the remedy we impose today will
incentivize prompt legislative attention to this subject.
IV.
In conclusion, the Third Round Rules cannot stand. They
are plainly at odds with the FHA, which incorporated the Mount
Laurel II remedy. Although our decision today signals that our
remedy imposed thirty years ago should not be viewed as a
constitutional straightjacket to legislative innovation of a new
remedy responsive to the constitutional obligation, the FHA
remains the current framework controlling COAH’s actions. With
respect to the current version of the FHA, the Third Round Rules
are ultra vires. We endorse the remedy imposed by the Appellate
Division.
As modified by this opinion, the judgment of the Appellate
Division is affirmed.
JUSTICE ALBIN and JUDGE RODRIGUEZ (temporarily assigned)
join in JUSTICE LaVecchia’S opinion. JUSTICE HOENS filed a
separate, dissenting opinion, in which JUSTICE PATTERSON joins.
CHIEF JUSTICE RABNER and JUDGE CUFF (temporarily assigned) did
not participate.
60
SUPREME COURT OF NEW JERSEY
A-90/91/92/93/94 September Term 2010
067126
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 5:96 AND 5:97 BY
THE NEW JERSEY COUNCIL ON
AFFORDABLE HOUSING.
JUSTICE HOENS, dissenting.
There is much in the opinion issued by my colleagues in the
majority with which I agree. In particular, I agree with the
majority that the remedy created by this Court as a way to
address exclusionary zoning policies that it found to be
unconstitutional, see S. Burlington Cnty. NAACP v. Twp. of Mount
Laurel (Mount Laurel II), 92 N.J. 158, 204-05 (1983) (citing S.
Burlington Cnty. NAACP v. Twp. of Mount Laurel (Mount Laurel I),
67 N.J. 151, 174, appeal dismissed and cert. denied, 423 U.S.
808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975)), and that the
Legislature essentially embodied in the Fair Housing Act (FHA),
N.J.S.A. 52:27D-301 to -329.4, is not the only constitutionally
permissible method for achieving the goal of providing
affordable housing.
1
Like the majority, I agree that the past three decades of
experience do not mean that there can be no other way to
“produc[e] significant numbers of low- and moderate-income
housing” nor does that experience suggest that there are no
other potential ways to do so “consistent with statewide
planning principles, present space availability, and economic
conditions.” Ante at ___ (slip op. at 6). Moreover, like my
colleagues in the majority, I agree that the remedy that this
Court created and “imposed thirty years ago should not be viewed
as a constitutional straightjacket to legislative innovation[.]”
Ante at ___ (slip op. at 58).
Indeed, I applaud the majority for its willingness not only
to recognize that there may be other ways to meet the mandate of
Mount Laurel II, but for actively and forcefully encouraging the
Legislature to explore new and innovative methods of “curb[ing]
exclusionary zoning and promot[ing] the development of
affordable housing[.]” Ante at ___ (slip op. at 46).
I write in dissent, however, because, notwithstanding those
broad and sweeping pronouncements, the majority’s analysis of
the approach taken by COAH in the Third Round Rules, and
therefore the majority’s holding, is flawed. As a result, the
Court needlessly demands, as its remedy, rigid adherence to the
very policies of the past that the majority simultaneously
2
denounces as a “straightjacket[.]” Ante at ___ (slip op. at
58).
In the end, although my colleagues in the majority invite
the Legislature to chart a new path, their conclusion that the
Third Round Rules adopted by COAH are inconsistent with the
dictates of the FHA, and their further directive that strict
adherence to the methodology of the earlier rounds is the only
permissible remedy, leave the Legislature with no guidance
concerning what alternate statutory approach might comply with
the majority’s interpretation of the Constitution. That lack of
guidance, perhaps unintentionally, will greatly diminish the
likelihood that the Legislature will attempt a future change of
course.
Were that my only disagreement with the majority, it would
not have prompted this dissent. On the contrary, were it true
that the Third Round Rules fall so far short of adherence to the
FHA that they cannot stand, I would gladly join my colleagues.
But they do not. Instead, as I see it, the Growth Share
approach utilized in the Third Round Rules is consistent with
both the constitutional mandates of Mount Laurel II and with the
dictates of the FHA.
Moreover, if, as the majority concludes, the Third Round
Rules lack a sufficient focus on regional needs to meet the
3
majority’s interpretation of what the FHA requires, it would be
far wiser, and more in keeping with our traditional manner of
addressing challenges to administrative agency actions, for this
Court to direct COAH to make that minor adjustment rather than
to toss aside years of effort and force COAH to don the old
straightjacket and rewrite the regulations to mirror those the
Court approved in earlier rounds.
I base my disagreement, and therefore my dissent, on what I
believe to be two flaws in the majority’s analytical approach,
which, taken together, have led the majority to impose upon COAH
a remedy that is both unnecessary and inappropriate.
I.
First, the statutory construction on which the opinion is
based is flawed because the majority has read its view of what
the FHA should say into the language that the Legislature chose.
That is, instead of considering the language that the
Legislature used when declaring its purpose and instead of
interpreting the operative sections of the statute in context,
the majority has focused narrowly on references to regional
approaches. More to the point, in maintaining that narrow
focus, the majority has divorced those references from
immediately surrounding words that permit a municipal, rather
4
than regional, approach and has ignored the broad statutory
language that tethers COAH’s role to sound planning principles.
The majority’s error is not in its explanation of the
history of Mount Laurel I and Mount Laurel II, all of which is
fully, faithfully, and carefully recounted. Nor does the error
lie in the majority’s recitation of the essential facts that led
this Court to mandate a solution, borne of frustration at the
failure of the other branches of government to achieve a way to
end unconstitutional exclusionary zoning practices. Nor is it
controversial to observe that the Legislature enacted the FHA at
the direction of, and to be consistent with, this Court’s
requirements in Mount Laurel II.
The FHA, however, bespeaks a more dynamic approach than the
one that the majority sees when reading the statute solely
through its Mount Laurel II lens. Indeed, only by reading the
FHA with the language of the Court in Mount Laurel II in mind,
can the majority conclude that there is no room in that statute
for the regulatory approach that COAH has adopted in the Third
Round Rules. Using standard tools of statutory construction,
however, yields a different result.
When called upon to interpret the Legislature’s intent, few
tools are as helpful as the Legislature’s own expression
thereof. The FHA, as an example, includes just such language in
5
the Legislature’s statement of its findings, which my colleagues
have overlooked, but which is of enormous assistance in the task
assigned. Principal among the findings included by the
Legislature in the FHA is the expression of that body’s
understanding of the meaning of Mount Laurel I and Mount Laurel
II. The Legislature declared:
The New Jersey Supreme Court, through its
rulings in [Mount Laurel I] and [Mount
Laurel II], has determined that every
municipality in a growth area has a
constitutional obligation to provide through
its land use regulations a realistic
opportunity for a fair share of its region’s
present and prospective needs for housing
for low and moderate income families.
[N.J.S.A. 52:27D-302(a) (emphasis added).]
That expression is entirely faithful to the historical context
in which the dispute over low and moderate income housing arose.
The Mount Laurel litigation had its roots in a geographic area
of the state in which growth in both housing and population was
taking place, but where that growth was being artificially
burdened by an exclusionary zoning scheme. See Mount Laurel I,
supra, 67 N.J. at 161-64. It was not the growth or lack of
growth that created the constitutional crisis; it was the manner
in which the municipality attempted to divert low and moderate
income families away from wealthier areas in the municipality
when growing. See id. at 169-70.
6
That is not to say that the Legislature made no reference
to regional concerns in the FHA, indeed it did, see N.J.S.A.
52:27D-302(e) (referring to regional need in terms of way in
which low and moderate housing may be maximized), as had this
Court in the Mount Laurel II opinion, see Mount Laurel II,
supra, 92 N.J. at 213, 237-38 (recognizing that “zoning in
accordance with regional considerations is not only permissible,
it is mandated”).
But the expressed focus of the Legislature was on growth
areas, as a result of which the FHA leaves open the route that
COAH, in adopting a Growth Share approach, utilized in the Third
Round Rules. If, as I understand it, the Legislature intended
to embrace the concept that growth, to the extent that it is
occurring, may not be exclusionary, then the Growth Share model
adopted by COAH in the Third Round Rules advances that goal and
is entirely consistent with the FHA.
My colleagues in the majority, however, read into the FHA
their own view of how growth should be channeled, finding a
requirement that regional considerations predominate to the
exclusion of municipal concerns. There are two shortcomings
with that approach.
For one thing, in addition to being inconsistent with the
context of the Mount Laurel litigation and the expression of the
Legislature in its findings, see N.J.S.A. 52:27D-302(a), it is
7
not faithful to the statutory text. Notably, in the majority’s
quotation from the FHA that is intended to prove the point that
the statute is largely based on regional concerns, the opinion
underscores the words that tend to support that conclusion while
ignoring the words “or a municipality” that follow. Ante at ___
(slip op. at 47) (reciting definition of “prospective need” and
quoting N.J.S.A. 52:27D-304(j) with partial emphasis).
For another thing, that approach, and the conclusion that
only the regulations from the prior rounds that this Court has
previously approved will suffice, creates a never-ending cycle
of forced growth everywhere. It does that by requiring COAH to
project what regional needs will be and then by demanding that
COAH force municipalities to comply with those projections in an
endless, self-fulfilling prophesy of sprawl.
Unlike my colleagues, I see different principles at work in
the statute that the Legislature enacted. The FHA is
fundamentally based on concepts that professional planners have
long embraced, requiring that COAH consider them in its
evaluation of housing obligations.
The reliance on sound planning principles so permeates the
FHA that only a few examples are needed to prove the point. The
Legislature included references to the need to revitalize our
urban areas through “construction, conversion and rehabilitation
8
of housing in our urban centers[, which] should be encouraged.”
N.J.S.A. 52:27D-302(g). It included those concepts when it
directed COAH to adopt criteria and guidelines:
Municipal adjustment of the present and
prospective fair share based upon available
vacant and developable land, infrastructure
considerations or environmental or historic
preservation factors and adjustments shall
be made whenever:
(a) The preservation of historically or
important architecture and sites and their
environs or environmentally sensitive lands
may be jeopardized,
(b) The established pattern of
development in the community would be
drastically altered,
(c) Adequate land for recreational,
conservation or agricultural and farmland
preservation purposes would not be provided,
(d) Adequate open space would not be
provided,
(e) The pattern of development is
contrary to the planning designations in the
State Development and Redevelopment Plan . .
. ,
(f) Vacant and developable land is not
available in the municipality, and
(g) Adequate public facilities and
infrastructure capacities are not available,
or would result in costs prohibitive to the
public if provided.
9
[N.J.S.A. 52:27D-307(c)(2).]
Each of those concerns is directly derived from sound
planning principles; each makes clear that the Legislature’s
intent was not simply to comply with this Court’s view of how
low and moderate income housing would best be created in
accordance with the Constitution. Instead, the Legislature was
trying to ensure that there would be careful recognition of the
need to embrace sound planning principles generally.
Nor was COAH directed to perform its duties in some purely
mathematically driven manner. Instead, the Legislature directed
COAH as follows:
In carrying out [its] duties,
including, but not limited to, present and
prospective need estimations the council
shall give appropriate weight to pertinent
research studies, government reports,
decisions of other branches of government,
implementation of the State Development and
Redevelopment Plan . . . and public comment.
To assist the council, the State Planning
Commission established under that act shall
provide the council annually with economic
growth, development and decline projections
for each housing region for the next ten
years.
[N.J.S.A. 52:27D-307(e).]
10
The reference to the State Plan is particularly significant
because that document divides the state into regions with an eye
toward sound planning, in which growth and development are
encouraged in areas where infrastructure already exists and
discouraged in regions of our state that are environmentally
sensitive or in which development would require addition of new
infrastructure. The State Plan, moreover, seeks to revitalize
cities and urban areas rather than to channel new development in
ways that simply create sprawl.
Significantly, as the majority recognizes, see ante at ___
(slip op. at 29-30), the Growth Share concept was not created by
COAH out of whole cloth, but was instead a model developed by
one of the state’s preeminent planning experts, see John M.
Payne, Remedies for Affordable Housing: From Fair Share to
Growth Share, Land Use L. & Zoning Dig., June 1997, at 3, 3.
More to the point, it was the creation of a planner who was an
advocate for affordable housing, see ante at ___ (slip op. at 29
& n.5), and was specifically designed to remedy a series of
methodological shortcomings evident to him in the regulations
COAH promulgated in the first two rounds, see Payne, supra, Land
Use L. & Zoning Dig., June 1997, at 3-6. Growth Share, which
was his solution, was designed to be a way to ensure that there
would be an adequate supply of low and moderate income housing
11
without abandoning sound planning concepts and without
continuing the escalating pattern of sprawl that inevitably
followed from the First and Second Round COAH regulations. Id.
at 6.
Significantly, in adopting the Growth Share model for use
in the Third Round Rules, COAH did not utilize a “pure” Growth
Share approach, see ante at ___ (slip op. at 45 n. 15 (citing
Payne, supra, Land Use L. & Zoning Dig., June 1997, at 6-9)),
because it did not erase the obligations that had been imposed
on municipalities in earlier rounds but that had never been
satisfied. Instead, those prior, unmet, obligations were
retained in the Third Round Rules adopted by COAH. As a result,
this Growth Share model, that my colleagues in the majority now
reject as being incompatible with the FHA, remained faithful to
the statute by honoring the residual effects of prior round
obligations on municipalities that this Court had previously
deemed constitutional.
The several references in the FHA to regional concerns on
which the majority relies are not inconsistent with a Growth
Share model. On the contrary, seen in light of the expressed
Legislative findings, see N.J.S.A. 52:27D-302, the theory is
aligned with the statutory focus on areas in which growth is
occurring. The references to regional concerns, at most, would
12
require only that the calculation of a municipality’s fair share
be made not only on a state-wide basis, as the Third Round Rules
require, but would include a regional component as well.
Therefore, if the majority is correct that the FHA is
essentially driven by regional considerations, then it is only
in that minute regard that they can conclude that the version of
a Growth Share approach embodied in the Third Round Rules is
inconsistent with the statute. That is, the Third Round uses a
formula that requires growth anywhere in the state to carry with
it the same requirement, statistically, for low and moderate
income housing, rather than recognizing that different regions
of the state, particularly if one considers the regions
identified by the State Plan, should lead to different
requirements for low and moderate income housing.
The majority concludes that the lack of a regional
calculation is so inconsistent with the FHA that the Third Round
Rules are ultra vires; they conclude that the inconsistency is
so significant that there is no possible remedy but to reject
these regulations in their entirety in favor of starting over
and creating new ones that mirror the prior two rounds. Even if
the majority’s analysis of the purported flaw in the Third Round
Rules is correct, there is nothing in that relatively minor
deviation that demands so drastic a remedy.
13
II.
That observation, that the remedy imposed by my colleagues
is unnecessary, leads to the second basis for my dissent. In
short, by demanding that COAH adopt regulations that continue on
the path followed over the past thirty years, the majority has
impermissibly interfered with the authority that the Legislature
vested in that administrative agency and has failed to give COAH
the deference that we routinely afford the final decisions of
every other administrative agency.
Our case law is replete with examples of our recognition
that, where a determination has been made by an administrative
agency, our scope of review is both narrow and deferential. See
Brady v. Bd. of Review, 152 N.J. 197, 210-11 (1997); see also
Lourdes Med. Ctr. v. Bd. of Review, 197 N.J. 339, 360 (2009).
We have long recognized that when the Legislature has delegated
power to an agency, “[t]he grant of authority . . . should be
liberally construed to enable the agency to accomplish the
Legislature’s goals.” Van Dalen v. Washington Twp., 120 N.J.
234, 245 (1990). When an agency acts in accordance with its
delegated power, its actions are “accorded a strong presumption
of validity and reasonableness.” Id. at 244-45.
In creating COAH, the Legislature granted it authority to
carry out the statutory directives, including the directive that
14
COAH promulgate regulations in furtherance of the goals
expressed in the FHA. N.J.S.A. 52:27D-307.5; see Hills Dev. Co.
v. Twp. of Bernards, 103 N.J. 1, 60-61 (1986). More to the
point, as we have held, COAH’s regulations are entitled to an
especially deferential standard of review because of that
agency’s unique mandate in implementing the FHA and its role in
achieving compliance with the Mount Laurel doctrine. See In re
Twp. of Warren, 132 N.J. 1, 27 (1993) (observing that “principle
of judicial deference to agency action is particularly well-
suited to our review of administrative regulations adopted by
COAH to implement the [FHA]”); Hills Dev. Co., supra, 103 N.J.
at 45-46.
As we have directed in this precise context, “the
judiciary, assuming the statutory plan functions reasonably
effectively, will be responsive to the actions of the Council
and conform its decisions in this field to the Council’s various
determinations.” Hills Dev. Co., supra, 103 N.J. at 37; see id.
at 24 (noting that because legislative and administrative action
is preferable to judicial action relating to affordable housing,
Legislature is entitled to “particularly strong deference”).
To be sure, we have recognized that, if a regulation that
has been promulgated is contrary to the legislative policies
that underlie the administrative agency’s enabling statute, or
15
when a regulation “does not comport with [the statute’s] central
purpose,” it cannot stand. Twp. of Warren, supra, 132 N.J. at
28 (invalidating municipal occupancy preferences as inconsistent
with aims of FHA). We likewise have expressed our preference
for harmonizing judicial action with COAH’s regulatory
determinations, although recognizing that the effort to
harmonize cannot be used to justify the “dilu[tion of] COAH’s
duty to adopt regulatory methods that are consistent with the
statutory goals.” Ibid.; see Toll Bros., Inc. v. Twp. of W.
Windsor, 173 N.J. 502, 572-73 (2002).
Deference to an administrative agency, including COAH, does
not extend to arguments that its regulations violate our
Constitution. See Abbott v. Burke, 100 N.J. 269, 298-99 (1985)
(“[A]lthough an agency may base its decision on constitutional
considerations, such legal determinations do not receive even a
presumption of correctness on appellate review.”). On the
contrary, as we have held, “constitutional concerns or the
dictates of legislative intent have at times compelled us to
decline adoption of doctrines or statutory interpretations that
have been favored by [an agency.]” In re Hunterdon Cnty. Bd. of
Chosen Freeholders, 116 N.J. 322, 328 (1989).
That being so, unless this Court can conclude with
assurance that the action of the agency was ultra vires, or that
16
its regulation is plainly unconstitutional, we ordinarily stay
our hand. See Lourdes, supra, 197 N.J. at 361. Even when we
conclude that regulations fall short, in recognition of the
expertise that the agency has in the matter, the more
appropriate course, and the one traditionally used in regard to
COAH, is to remand to the agency to exercise its discretion as
to how to proceed. See, e.g., In re Adoption of N.J.A.C. 5:94 &
5.95, 390 N.J. Super. 1, 87 (App. Div.), certif. denied, 192
N.J. 71 (2007); In re Six Month Extension of N.J.A.C. 5:9-1 et
seq., 372 N.J. Super. 61, 104-05 (App. Div. 2004), certif.
denied, 182 N.J. 630 (2005).
Applying these precedents to the matter now before the
Court, to the extent that the majority believes that the
shortcoming in the Third Round regulations is the lack of a
formula with a regional component, the appropriate remedy would
be a remand to COAH to make what should be a relatively routine
correction. By eschewing that traditional approach and by
directing that COAH essentially craft an entirely different
regulatory scheme, albeit one based on the methodology embodied
in the prior rounds of regulations, the majority has ignored our
tradition of deference to agency expertise and has overstepped
its authority.
17
Moreover, in doing so, the majority has failed to recognize
the relatively wide scope of authority that the Legislature,
through enacting the FHA, has reposed in COAH. Far from being a
carefully circumscribed or limited grant of authority, the
statute affords much discretion to COAH. See, e.g., N.J.S.A.
52:27D-307 (identifying duties and authority granted to COAH).
The majority, however, has ignored that legislative
determination and instead has concluded that it is the
Legislature that must act, apparently through an amendment to
the FHA, if there is to be any departure from the regulatory
scheme this Court permitted in the first two rounds. See, e.g.,
ante at ___ (slip op. at 51) (“To sum up, the Legislature has to
enact an alternative remedy –- such as some version of the one
proposed by COAH in the Third Round Rules –- in order for that
remedy to be statutorily permissible.”).
In taking that stand, the majority has announced that only
the Legislature can alter the approach as to how an adequate
supply of low and moderate income housing will be achieved. In
the process, the majority has removed all discretion from COAH,
replacing the scheme that the Legislature enacted with a
directive that prevents COAH from innovation of any kind and
that serves only to perpetuate the policies that have not truly
achieved the goal of ensuring that an adequate supply of
18
affordable housing will be made available for people of all
income levels in our state.
As I understand our role, we owe COAH the same deference
accorded any other agency when we evaluate its decision or the
exercise of its rulemaking authority. Offering no guidance and
instead substituting its view of the only statutorily
permissible approach, the majority greatly diminishes the
likelihood that either COAH or the Legislature will take the
initiative for change that the majority intends to encourage.
The effect of the demand that the agency adhere to the policies
of the past instead will serve as a disincentive to true
innovation by the Legislature because, in the absence of
guidance from this Court about what approach, other than the one
dictated by this Court three decades ago, will be found to be
constitutional, that body more likely will continue on the
previously approved course.
To the extent that the extensive study and analysis
undertaken by COAH in devising the Growth Share approach
embodied in the Third Round Rules may be flawed, it is only
because the majority remains wedded to the methodologies imposed
in the past. To the extent that the majority, in substituting
its view of what the FHA demands for the language that the
Legislature used, reads the statute to exclude the creative and
19
innovative approach that Growth Share represents, it risks
subjecting us to an endless cycle of repeating that which has
not worked in the past. To the extent that the majority
concludes that the Third Round Rules fall short, the
appropriate, and indeed the preferable, remedy would be to
identify that shortcoming and permit it to be addressed by the
agency that the Legislature created, not to mandate that the
agency undertake what is essentially an overhaul of regulations
so that they utilize a formula of the majority’s choosing.
Because in my view the Third Round Rules are not
inconsistent with the statutory mandates derived from this
Court’s decisions in Mount Laurel I and Mount Laurel II, I would
reverse the Appellate Division’s direction that we return to the
approach used in the First and Second Round.
III.
The majority’s recognition that the dictates of Mount
Laurel I and Mount Laurel II are not the only constitutionally
permissible methods for achieving the provision of adequate low
and moderate income housing is a conclusion with which I agree.
To the extent, however, that the majority concludes that the
Third Round Rules adopted by COAH are so flawed that they must
be replaced with the approach utilized in the past, I
respectfully dissent.
20
JUSTICE PATTERSON joins in this opinion.
21
SUPREME COURT OF NEW JERSEY
NO. A-90/91/92/93/94 SEPTEMBER TERM 2010
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 5:96 AND 5:97 BY
THE NEW JERSEY COUNCIL ON
AFFORDABLE HOUSING.
DECIDED September 26, 2013
Justice LaVecchia PRESIDING
OPINION BY Justice LaVecchia
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY Justice Hoens
AFFIRM AS
CHECKLIST REVERSE
MODIFIED
CHIEF JUSTICE RABNER ----------------------- ---------------------
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE HOENS X
JUSTICE PATTERSON X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) ------------------------ ----------------------
TOTALS 3 2
1