Article

Court Reverses Planning Board’s Denial of Application to Convert Age-Restricted Development

By Henry T. Chou, Esq.

In the recent case of Heritage at Towne Lake, LLC v. Planning Board of the Borough of Sayreville, a court reversed a planning board’s denial of a developer’s application to convert an age-restricted (55+) residential development to a non-age restricted development open to persons of all ages. The court found that the denial was unlawful under the 2009 law that allows for conversions due to the lack of demand for age-restricted housing. The decision is significant because it makes clear that planning boards have very little discretion to deny such applications when the developer satisfies the criteria of the 2009 law.

The “Conversion” Law

On July 2, 2009, Governor Corzine signed legislation that allows builders to apply to planning boards to convert age-restricted developments to non-age restricted developments. Under that “conversion” law, builders that have not sold any units or taken deposits for sales may apply to planning boards to convert approvals obtained prior to July 2, 2009. Such builders must agree to set aside 20% of the units as affordable housing, conform to the Residential Site Improvement Standards (RSIS) and building codes, demonstrate that the water supply and sanitary sewer systems are adequate to serve the converted development, and show that there are sufficient parking facilities for the converted development. Provided a builder meets those requirements, a planning board must approve the conversion application unless it determines that the conversion would cause “substantial detriment to the public good and substantially impair the intent of the zoning ordinance and master plan.”

Sayreville Planning Board’s Denial of a Conforming Conversion Application

In the Heritage at Towne Lake case, the builder submitted a fully conforming application to convert 184 age-restricted multifamily units to non age-restricted units, with 20% of the units set aside for affordable housing. The builder provided uncontroverted professional testimony that the conversion would not involve any changes to the building footprints, water and sewer capacity, and parking and traffic requirements. The only proposed change was removing the previously proposed bocce courts, leaving two thousand square feet of passive recreational space, i.e., a grass field. No other physical changes to the layout of the development were proposed.

Nevertheless, the Planning Board denied the application, claiming that converting the development would cause substantial detriment to the public good and would substantially impair the intent and purpose of the zoning ordinance and master plan because: (1) the Borough’s master plan envisioned that age-restricted housing would be built on the property and the developer failed to present proofs to demonstrate that a conditional use variance was warranted; (2) the Borough continued to have a need for age-restricted housing; (3) the developer had not satisfied all the conditions of its previous final subdivision approval; and (4) the developer’s conversion plans failed to provide sufficient recreational facilities for children.

The Court’s Reversal of the Planning Board’s Denial

The developer filed suit contesting the Planning Board’s denial, and the Superior Court of New Jersey, Law Division, ruled that the Planning Board had no discretion to deny the developer’s application because it had met all of the criteria of the conversion statute, and that there was no evidence that the converted development would cause a substantial detriment to the public good or substantially impair the intent and purpose of the zoning ordinance and master plan.

In reversing the Planning Board’s determination that the conversion would violate the zoning ordinance and master plan and create a nonconforming use, the court ruled that the conversion law specifically defines non age-restricted housing as a “permitted use,” and prevents planning boards from determining otherwise. Because non age-restricted housing is a permitted use under the law, the Planning Board could not require the developer to present proofs typically required for use variances or conditional use variances. Citing the developer’s uncontroverted professional testimony that there was no demand for age-restricted housing in the region, the court rejected the Borough’s contention that there was still a demand for such housing. It also dismissed the Planning Board’s argument that the developer had not complied with all of the conditions of its previous final approval, holding that the conversion law contains no such requirement, and that anyone with a preliminary approval could apply for a conversion regardless of the status of compliance with conditions of a prior approval.

The court further concluded that the Board raised only one reasonable objection, which concerned the applicant’s proposed replacement of a bocce court with a large grass field as a recreational area. Thus, it ordered the Planning Board to adopt a resolution approving the conversion application, with a condition that the conversion plans be revised to show a tot lot for children.

Conclusion

The Heritage at Towne Lake opinion respects the legislative intent underlying the conversion statute, and interprets the law in a manner that gives planning boards very little leeway to deny conversion applications if the developer has complied with all the criteria of the statute. Although the case may be appealed, the trial court’s rulings in the matter are quite persuasive. The conversion law was a significant achievement for the development community, and it is encouraging that a court has applied it strictly and forcefully. Additional conversion applications are now before boards, and more can be expected.

Henry T. Chou is a partner of Hill Wallack LLP. He concentrates his practice in the land development application and permitting process and in the litigation of land use matters. He has represented developers, public entities, property owners and non-profit organizations in a wide variety of environmental, redevelopment and construction matters involving residential, commercial, industrial and public projects.