New Jersey Land Use Law

In another shift from COAH's previous "third round" policies, the new rule amendments assign specific, numerical affordable housing obligations to each of the State's 566 municipalities. When COAH announced the rule amendments earlier this year, it did not make public the actual numbers that would be assigned to each town under those rule amendments. To fill that gap, Hill Wallack LLP calculated the fair share housing obligations for each town for the period 2004 to 2018 under the rule amendments. Click Link for Chart. http://www.hillwallack.com/web-content/pdf/affordable%20housing%20obligation%20chart.pdf. Subsequently, COAH posted its own chart showing municipal fair share housing obligations for the period 2004 to 2018, mirroring the numbers in the chart prepared by Hill Wallack LLP. Click Link for COAH's Chart. http://www.nj.gov/dca/coah/oct08rules/projections.xls.

Under the new rule amendments, sites located in Planning Area 1 are to be zoned at a presumptive minimum density of eight units per acre, with a presumptive maximum lower income unit set-aside of 25% of the total number of units. For lands located within Planning Area 2, the presumptive minimum density is 6 units per acre, with a presumptive maximum set-aside of 25%.

For non-sewered sites within Planning Areas 3, 4 and 5, there is to be a 40% density increase, with a presumptive maximum set-aside of 20%. For Planning Area 3, 4 and 5 lands within sewer service areas, the presumptive minimum density is four units per acre and the presumptive maximum set-aside is 25%. For areas within “urban centers” designated in the State Plan, the presumptive minimum density is 22 units per acre and the presumptive maximum set-aside is 20%. The rule amendments also provide that municipalities and builders can enter into alternative agreements establishing different minimum densities and maximum set-asides.

While presumptive minimum densities are not a new concept, insofar as they reflect COAH’s policies in the previous COAH compliance periods, the new 25% maximum set-asides represent a significant change in policy. Previously, COAH and the courts recognized that a 20% set-aside is the practical maximum and that any higher set-aside would actually discourage construction of inclusionary developments.

The rule amendments also require municipalities to adjust bulk standards and maximum height standards to accommodate higher densities and to permit attached housing, clustering and lot size averaging. Higher presumptive densities and lower set-asides for rental housing are also provided for in the rule amendments.

COAH’s rule amendments allow municipalities to give builders the option of paying a fee “in lieu” of constructing affordable housing, with those fees ranging from $145,000 to $182,000 per affordable unit, depending upon the “COAH Region” within which the lands are located. Municipalities are not obligated to provide this option, and builders are to have the ability to choose whether to build the affordable units or pay the in lieu fees. If the builder pays the in lieu fee, he or she may get a reduced density bonus, but is still entitled to the presumptive minimum density.

As referenced above, the rule amendments also assign new municipal fair share housing obligations based upon COAH’s own projections as to each municipality’s anticipated housing growth and employment growth in the years ahead. Unlike the “growth share” approach promoted by COAH in previous iterations of its “third round” regulations, the rule amendments impose specific numerical housing obligations on each municipality. In this vein, the rule amendments create opportunities for builders who seek to construct affordable housing.

Municipalities that are currently under COAH’s jurisdiction and wish to remain immune from exclusionary zoning lawsuits must file housing plans by December 31, 2008. In practical terms, the December 31 deadline means that builders who wish to acquire rezonings and construct inclusionary developments should approach municipal officials with development proposals immediately in order to maximize the prospect of favorable rezonings.

Despite COAH’s new rule amendments, numerous groups – including municipalities, non-profit housing groups and the development industry – remain convinced that the new COAH rule amendments do not adequately address the constitutional lower income housing issues. To that end, many of these groups, along with individual developers and municipalities, will be filing appeals with the Appellate Division, challenging the rule amendments on various grounds. At this juncture, it is impossible to ascertain whether the rule amendments outlined above will be upheld by the courts, or if another round of revisions is on the horizon. Nonetheless, builders and others affected by the rules should assume at this point that the current rules will govern, and builders should continue to pursue development proposals with municipalities accordingly.

Hill Wallack LLP is one of the largest law firms in Central New Jersey, with offices in Princeton and Atlantic City, New Jersey and Newtown, Pennsylvania. Over the past 30 years, Hill Wallack LLP has earned a reputation for comprehensive problem solving. The firm’s well-known practice groups in Land Use -- Planning, Zoning, Affordable Housing, and Redevelopment -- Environmental Regulation and Litigation, Regulatory and Government Affairs, Workers’ Compensation, Insurance Defense, Real Estate, Community Association Law, Construction and Business Law are complemented by its specialty practices in Gaming Law, Employment, Professional Liability, Government Procurement, and Public Finance.