New Jersey Land Use and Environmental Law

By: Henry T. Chou, Esq.

In response to numerous public inquiries, the New Jersey Council on Affordable Housing ("COAH") posted a letter on its website on December 17, 2008, clarifying the scope of the scarce resource restraints it previously imposed upon on municipalities in the Highlands Region.

On November 12, 2008, COAH issued a Resolution imposing scarce resource restraints in Highlands towns within COAH's jurisdiction as to "any and all municipal actions associated with development approvals, water allocation and wastewater allcation..." While it was clear that the scarce resource restraints against "municipal actions" applied to new applications for development approval, it unclear to many what the restraints meant to other projects that were farther along in the development process. For example, many towns could not understand what the restraints meant for developments that had obtained all local and state approvals but had not commenced construction or to projects that were partially constructed. Out of caution, many Highlands municipalities halted development of many projects that COAH did not truly intend to be affected by the restraints.

COAH's letter of December 17, 2008 provided a comprehensive list of 36 categories of "exemptions" to the restraints, thus clarifying that the scarce resource restraints were not meant to apply to such situations. Any property owner or developer with questions concerning the exemption categories may apply to COAH for further clarification.

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By Michael J. Lipari, Esq.

In a case styled Price v. Strategic Capital Partners, LLC, et al., approved for publication on December 16, 2008, the Appellate Division upheld a trial court determination that a zoning ordinance violates the Municipal Land Use Law if it prohibits a zoning board from hearing an application for use variance. The Court also stated that a density variance allowing a project with three-times the permitted density was closer to a change in zoning than it was to a variance.

Defendant Strategic Capital Partners had applied to the Union City Zoning Board for a density variance to construct an eighteen-story high-rise residential building consisting of ninety units. Strategic’s property was located in the Multi-Family Residential Zone (R-MF) and the Steep Slope Overlay Zone (SSOD). The Zoning Ordinance restricts the project to a maximum density of thirty units, but allows high-rise structures. The Zoning Ordinance also contains a provision that states: “Notwithstanding the foregoing, the Planning Board or Board of Adjustment shall not have jurisdiction to grant density greater than that permitted [in the SSOD zone].

After Strategic was granted its density variance pursuant to N.J.S.A. 40:55-70(d)(5) of the Municipal Land Use Law, an objector to the project, Larry Price, filed suit challenging the Zoning Board’s authority to grant a variance, and alleged that the substantial increase in density amounted to a rezoning, which must be granted only by the City and not the Zoning Board. The Appellate Division upheld the trial courts determination that the provision of the Zoning Ordinance which prohibited the Zoning Board from hearing a density variance was invalid. The MLUL specifically grants a municipal zoning board the authority to issue a variance to permit an increase in the permitted density in a specific zone. The powers of a municipal land use board stem directly from the MLUL, which the Court reiterated “may not in anyway be circumscribed, altered or extended by the municipal governing body.”

Although the Court determined that the Zoning Board acted within its authority when granting the variance, it remanded the matter back to the Zoning Board for additional findings of fact. The Court took specific issue with the Zoning Board’s approval of the project’s density that was three times that which is permitted in the zone. The opinion pointed out that a zoning board is not permitted to correct deficiencies in a zone plan by issuing variances because such actions would “be tantamount to an usurpation of the legislative power” to amend and revise zone plans. The Appellate Division drew a line in the sand by stating that “[i]n our view, a variance that permits the construction of a building with treble the permitted density … has strayed into the forbidden area, absent a compelling explanation to the contrary.”

This is the first time that a court has drawn such a line as to when an variance to allow an increase in density goes so far as to constitute a rezoning of property. The Court emphasized that prior cases have upheld variances that have permitted “a minimal increase in density,” but that a variance allowing a project with treble density hardly meets that standard.

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By Michael J. Lipari, Esq.

The New Jersey Supreme Court upheld an Appellate Division decision that dismissed a challenge to the Highlands Water Protection and Planning Act, N.J.S.A. 13-20-1 et seq. The result of this decision, which is the first challenge to the Highlands Act to be heard by the Supreme Court, further stymies any chance of judicial invalidation of the Act. The opinion itself does not provide any additional reasons, but merely relies upon the August 10, 2007 opinion issued by the Appellate Division.

The Highlands Act took effect in 2004 and overrides local land use regulation for 88 municipalities in parts of Bergen, Hunterdon, Morris, Passaic, Somerset, Sussex and Warren Counties. This land-preservation act has curbed development in most of northern New Jersey. Landowners under the jurisdiction of the Highlands Council have seen a significant diminishment in property values as they can no longer develop their property with any meaningful or economically viable project.

In a case styled OFP, LLC v. State of New Jersey, the plaintiff was the owner of an undeveloped 93-acre tract of land in Washington Township. Plaintiff had received preliminary subdivision approval for 26 residential lots prior to the introduction of the Highlands Act to the Legislature. The only remaining permit that plaintiff needed was finally obtained after the introduction to the Legislature, but before it was enacted into law in August 2004. The language of the Highlands Act required all permits to be obtained prior to the introduction of the Act. As a result, plaintiff’s property became subject to the jurisdiction of the Highlands Act which would not allow plaintiff the density it desired. Plaintiff filed suit challenging the constitutionality of the Act. Plaintiff alleged that the Act constituted a taking of its property without just compensation because plaintiff could no longer develop its property with the 26 desired residential lots.

On December 10, 2008, the Supreme Court of New Jersey upheld the Appellate Division decision, finding that the plaintiff did not exhaust all of the available administrative remedies prior to filing suit. A determination of whether a governmental regulation results in the taking of property requires that the agency provide reasonable procedures to decide and explain any alleged breach of its regulations. The Highlands Council allows an aggrieved party to file for a hardship waiver, which would then be determined on a case-by-case basis. The Court found that this provision was sufficient to prevent a regulatory taking and that the Agency had to first make a determination on the application for a waiver before the Court could properly determine whether any taking took place.

The Supreme Court further upheld the Appellate Division holding that no due process violation occurred and that the retroactive application of the Highlands Act was valid and furthered a lawful purpose under the rational basis test. The purpose of the Act is to reduce development sprawl that threatens the region’s significant natural resources and large portion of the state’s drinking water supply.

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By Henry T. Chou, Esq.

Wtih the closing of Fort Monmouth approaching in just over two years, the Fort Monmouth Economic Revitalization Planning Authority (FMERPA) moved promptly to adopt its "Fort Monmouth Revitalization Plan" on September 3, 2008. The Plan, which provides proposals for the reuse of the base, calls for various types of development, including market-rate and affordable housing.

Given that the New Jersey Fair Housing Act was amended this past summer to require agencies that have planning and zoning authority over large areas of land to oversee and implement compliance with constitutional affordable housing obligations in those areas, FMERPA is poised to enter into a Memorandum of Understanding (MOU) with the New Jersey Council on Affordable Housing (COAH) concerning any affordable housing that may be built as part of the redevelopment of the "Fort Monmouth Reuse and Redevelopment Area."

The MOU provides that COAH and FMERPA will establish a cooperate planning process and include the several municipalities on which Fort Monmouth is situated an opportunity to participate in the process. While not setting any specific deadlines, the MOU obligates FMERPA to identify sites and opportunities for inclusionary housing (developments that contain a minimum 20% of affordable housing) within the Fort Monmouth Reuse and Redevelopment Area.

COAH and FMERPA have agreed to implement a unique methodology for calculating the affordable housing obligation on the former base, one that would only generate obligations when sufficent new jobs have been created to replace the jobs lost to the base closing, as well as crediting job loss only against job gain that occurs within the Fort Monmouth Reuse and Redevelopment Area.

Because FMERPA has a 20-year "implementation horizon" for its revitalization plan, is anticipated that the formulation of an affordable housing plan for the Fort Monmouth Reuse and Redevelopment Area will be a fluid process not tied to the standard COAH timeframes that apply to municipalities. Development of affordable housing could either occur quickly or slowly depending on the motivation of the parties involved.

The proposed MOU will be the subject of COAH's next public hearing on December 10, 2008.

Posted by Henry T. Chou, Esq. at 05:54 PM | Permalink | Comments (0) | TrackBacks (0)

By: Henry T. Chou, Esq.

On November 12, 2008, the New Jersey Council on Affordable Housing (COAH) issued a Resolution imposing scarce resource restraints, indefinitely barring development in Highlands towns that are within COAH’s jurisdiction, with the exception of single-family or duplex homes on existing lots, residential housing that includes a 20 percent set-aside for affordable housing, or projects that are exempt or have obtained a waiver under the Highlands Act. COAH’s stated purpose for the moratorium was to “preserve scarce land, water and sewer resources” that might be needed for the future development of affordable housing in the Highlands.

Additionally, the Resolution extended the deadline for Highlands towns to file new affordable housing plans from December 31, 2008 to December 8, 2009. COAH’s rationale for granting the extension of nearly one year was that Highlands towns that wished to remain in the COAH process needed more time to prepare their plans because the Highlands Council and COAH had not yet formulated “adjusted,” i.e., lower affordable housing numbers for those towns. Within this framework, it is anticipated that the scarce resource restraints will remain in place for at least one year.

COAH’s Resolution came on the heels of an October 29, 2008 Memorandum of Understanding (MOU) between New Jersey Highlands Council (Highlands Council) concerning the future development of affordable housing in the Highlands. The MOU announced that COAH and the Highlands Council intended to work together to reduce the affordable housing obligations of towns that are within the Highlands Preservation Area, as well as towns in the Highlands Planning Area that wish to voluntarily conform to the development restrictions of the Highlands Regional Master Plan (Highlands Plan).

The MOU was the direct result of an Executive Order (#114), recently issued by Governor Corzine, which gave the Highlands Council the purported authority to review COAH’s calculation of affordable housing obligations of towns located in the Highlands, and to adjust them downwards as necessary to ensure consistency with the Highlands Plan. Extraordinarily, the Executive Order also gave the New Jersey Department of Environmental Protection (NJDEP) the purported authority to withhold or deny NJDEP permits for development in the Highlands that is inconsistent with the restrictions of the Highlands Plan, even if those regions are located within the Highlands Planning Area, where compliance with the Highlands Plan is supposed to be voluntary.

The recent measures taken by the State have completely halted development in the Highlands. Numerous property owners and developers have filed legal challenges challenging the State’s actions concerning the Highlands. It remains to be seen whether the courts will strike down the onerous restrictions, but the development community is optimistic about the merits of their claims.

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