New Jersey Land Use Law

On September 22, 2008, COAH adopted its amended “third round” regulations. These regulations establish new numerical fair share obligations.

The fair share numbers are considerable, and many municipalities will be looking to the private sector for assistance in meeting their obligations, especially now that “regional contribution agreements” have been banned by A-500 (P.L. 2008, c.46).

The new regulations establish presumptive minimum densities for inclusionary projects. COAH’s regulations specifically authorize towns and builders to negotiate their own terms for increased densities and other incentives for the construction of affordable housing. COAH has facilitated this process slightly by sending a letter to all mayors on October 30, 2008, advising them of the agency’s intention to amend the regulations to provide that, if a town increases the permissible housing densities for an inclusionary project, the additional market rate housing units to be constructed utilizing such a density bonus will not generate an additional housing obligation under COAH’s growth share formula.

COAH’s Petition/Objections Processes

A town that files with COAH enters an administrative process of uncertain duration. Builders interested in re-zonings can participate during that process.

The town may either file a housing plan and petition for COAH to approve that plan — in COAH-speak, to grant “substantive certification” to the plan — or it may simply file the plan without petitioning. COAH has 45 days to determine whether the filing is complete. If the filing is deemed incomplete, the town has another 45 days to correct any deficiencies. If it fails to correct the deficiencies, the town should be dismissed from COAH’s jurisdiction and become vulnerable to exclusionary zoning litigation.
If the town has merely filed a plan, it must petition for COAH review of the plan within two years. The period of any substantive certification ends ten years after the date of the initial filing, however, regardless of when the town petitions for COAH review.

Once a town’s petition is deemed complete, the town must give public notice of its filing. That notice opens a 45-day period for property owners, builders, and other interested persons to file written objections to the petition, with those objections to point out deficiencies in the fair share plan and identify sites proposed for favorable re-zonings. The new regulations establish detailed requirements for a proper objection. If an objection does not satisfy the requirements, COAH may deem the objection incomplete. If so, objectors will have 14 days to correct any deficiencies.

The filing of an objection is a critical step. By filing an objection, the property owner or builder assures itself the right to be involved in all subsequent stages of the agency proceeding. A property owner or builder who fails to file an objection at this point may or may not be able to intervene in the process later on.

The Mediation Process

Where objections are filed, the town and the objectors are obligated to participate in mediation over the objections. This is the next real opportunity for a property owner or builder to induce the town to include a proposed project in the town’s housing plan. In principle, mediation is to begin 45 days after the end of the objection period. The new regulations, however, create opportunities for delay at this point. First, mediation does not begin until COAH staff has prepared a “pre-mediation report” analyzing the housing plan and the objections. The regulations acknowledge that the agency staff may not be able to accomplish this for all the pending petitions within the 45 days between the close of the objection period and the commencement of mediation. The rules therefore permit COAH to postpone mediation indefinitely until it has prepared its pre-mediation report. Even after the agency staff has completed the pre-mediation report, mediation will not necessarily begin. The report may conclude that the plan is deficient or that the agency needs additional information to evaluate it. It may require the town to provide additional information, to supplement its plan, or even to completely revise it and re-petition. There appears to be no limit to the number of times this cycle may be repeated. All the while, mediation would be postponed.

Once it starts, mediation is to be completed within 90 days, although this deadline can be extended indefinitely. Again, however, the end result of the mediation process may be a favorable rezoning for objecting builders, since all towns will have to bring their plans into compliance with the new regulations and satisfy their fair share obligations.

Different Rules for Highlands Towns

On October 30, 2008, COAH modified the above timetable for the 88 towns in the Highlands Region. For towns in the Highlands Region that filed a Notice of Intent to conform their zoning to the Highlands Regional Master Plan, the deadline for filing with COAH is extended to December 8, 2009. This extension may not affect towns in the Highlands Region that have not previously filed with COAH. Towns that have not previously filed with COAH, whether they are in the Highlands Region or not, are free to file housing plans or petitions with COAH on whatever timetable they choose. Once they file, the agency process described above governs. Those towns remain vulnerable to exclusionary zoning litigation unless and until they file with COAH.

Conclusion

The unspoken reality is that COAH is short of experienced staff. Based upon past performance, it is doubtful that it will be able routinely to review housing plans and conduct mediations in accordance with the nominal timetables in its regulations. Only a strenuously aggressive strategy by particular objectors will keep a town moving forward through this process at any reasonable pace. As noted above, towns that have not filed “third round” plans with COAH (and those that previously filed such plans but miss the deadlines described above for the filing of revised plans) are vulnerable to builder’s remedy suits.