Court Holds Inclusionary Development Qualifies as "Inherently Beneficial Use" in Use Variance Applications
By: Henry T. Chou, Esq.
On June 16, 2011, the Law Division of the Superior Court issued a decision in Estaugh Commons v. Haddonfield Borough Zoning Board of Adjustment that makes it harder for municipal land use boards to deny use variance applications by developers seeking to build affordable housing. At issue in the lawsuit was whether an inclusionary development proposed by a private developer should have been considered an “inherently beneficial use” by the Zoning Board of Adjustment when evaluating the developer’s use variance application.
The Use Variance Standards
To obtain a use variance, i.e., approval for a use not specifically permitted under the zoning ordinance, an applicant must demonstrate that its proposed project meets both the "positive" and "negative" criteria required by the Municipal Land Use Law. To satisfy the positive criteria, an applicant must show that the site is specially suited for the proposed use. The negative criteria requires the applicant to demonstrate that the proposed use will not pose a substantial detriment to the public good and will not substantially impair the purpose of the master plan and zoning ordinance.
Affordable Housing as an Inherently Beneficial Use
In the past, the courts have held that 100% affordable housing projects (developments that consist entirely of affordable housing units) and affordable housing projects included in a town’s COAH-approved compliance plan are considered "inherently beneficial" uses in the same vein as hospitals and schools, with such status presumptively satisfying the positive criteria without the need to show that the site is specially suited for affordable housing.
Implications of the Haddonfield Case
In the Haddonfield case, the Zoning Board of Adjustment refused to consider the applicant's proposed inclusionary project (a development containing both market-rate units and affordable units) as an inherently beneficial use because it was not a 100% affordable housing project, i.e., only 7 out of the 35 total units were to be affordable units. On that basis, the Board determined that the developer failed to satisfy the positive criteria and denied its use variance application.
The court reversed the denial, holding that the "inherently beneficial" status should also apply to inclusionary projects, especially in municipalities that have unmet affordable housing obligations, such as Haddonfield. It reasoned that affordable housing is no less beneficial to society just because it is provided as a part of an inclusionary development rather than a 100% affordable housing project. Importantly, the court determined that the "inherently beneficial" status should apply even though the Borough had already received third round substantive certification from COAH for a housing plan that did not include the proposed inclusionary project.
In light of its holding, the court remanded the matter back to the Board for further consideration of the use variance application. Since the positive criteria have been established by virtue of the "inherently beneficial" status of the inclusionary development, the only issue left for the Board to determine is whether the applicant has satisfied the negative criteria.
At this juncture, it is not known whether the Board intends to appeal the court's decision. If, however, the court's decision is left unchallenged or upheld on appeal, it will be an important tool for developers who seek use variances to build inclusionary developments.