January 1, 1900

by Stephen M. Eisdorfer

In theory, a builder should find it comparatively easy to secure municipal development approvals for housing in an inclusionary development, i.e., a development that includes both market priced housing and low and moderate income housing (or a corresponding payment to a municipal affordable housing trust fund). Since the second Mt. Laurel decision, virtually every settlement agreement or judgment that has mandated inclusionary zoning at increased densities has prohibited unilateral repeal of that zoning, barred planning boards from imposing cost-increasing requirements, and mandated speedy processing of development applications. As long ago as 1994, the regulations of the Council on Affordable Housing (COAH) have expressly imposed these obligations on municipalities that have received COAH approval ("substantive certification") for their housing plans. N.J.A.C. 5:93-10.

The Nature of Municipal Resistance

In practice, municipalities that eagerly supported inclusionary development when they were before the courts or COAH sometimes become reluctant - or even actively hostile - when faced with an actual development proposal. Zoning ordinances are suddenly repealed, new ordinances limiting construction on "steep slopes" or restricting tree cutting are adopted, plans for the provision of sanitary sewers are revised, new fees are imposed, or the approval process slows to a glacial pace. The builder suddenly finds him or herself in an extremely difficult situation.

The Available Remedies

In recent years, both the courts and COAH have created procedures and remedies to deal with these newly recalcitrant towns. For example, COAH has adopted regulations which provide for both mediation and adjudication of builder complaints that a town is thwarting inclusionary development provided for in its COAH-approved housing plan. N.J.A.C. 5:93-10.

These COAH procedures are most effective when the town is itself seeking some sort of relief from COAH, such as approval of a subsequent housing plan. In this regard, COAH has adopted regulations that specifically bar a municipality from excluding from any new housing plan the inclusionary housing sites included in prior plans approved by COAH or the courts. N.J.A.C. 5:93-5.13. Thus, in cases involving Randolph Township, Howell Township and Tenafly Borough, COAH has delayed or denied municipal petitions for substantive certification because the town has repealed previously adopted inclusionary zoning ordinances, adopted steep slope ordinances that reduce the effective density permitted on inclusionary housing sites, or refused to extend previously granted approvals for inclusionary developments. To use this remedy effectively it is important to be in contact with COAH. COAH has established a procedure for builders to give notice to COAH when they file municipal development applications for inclusionary developments. N.J.A.C. 5:93-10.4(a). Correctly timing the application to COAH for mediation or an adjudication is often critical.

COAH and the Sewer Issue

Even when the town is not seeking relief from COAH, COAH has the power to revoke previously issued substantive certifications, or to issue affirmative orders requiring towns to implement previously approved housing plans. For example, in a case involving Hillsborough, the municipality had rezoned property for multi-family development that was not then in the town's sewer service area. Having developed subsequent regrets about including the housing development in its COAH-approved housing plan, the town refused to amend its water quality management plan to place the development in a sewer service area. Upon application by the builder, COAH revoked substantive certification and exposed the town to exclusionary zoning suits by builders. The Appellate Division upheld this action as being well within COAH's power. Subsequent developments in that case are analyzed elsewhere in this issue.

Cost-Generative Requirements

In a case involving Roseland, the builder claimed that the town was imposing additional cost-increasing requirements. COAH referred the case to an administrative law judge, who found for the developer and ordered the town to eliminate some of those requirements. COAH adopted much (though not all) of the decision by the administrative law judge. In a similar but more extreme case involving Denville, the town reneged on provisions of its housing plan which provided for transfer of certain property to a housing authority for construction of low income housing. COAH issued an order compelling the town to comply with the terms of its COAH-approved housing plan. The Appellate Division affirmed this decision. Finally, in a recent case involving Parsippany-Troy Hills, COAH has accepted jurisdiction of a dispute between a builder and the town as to the proper amount for the sewer connection fee and indicated its intention to refer it to an administrative law judge for determination.

Overcoming Anti-Development Bias

To prevail in these cases, it is necessary to overcome COAH's intrinsic reluctance to take actions adverse to a municipality. It is often not enough for the builder to demonstrate that he or she is being injured by improper municipal actions. The builder must marshall the facts and the law to present his or her case in a manner that demonstrates both that the town has defied COAH, and that it is acting contrary to public policy.

Judicial Enforcement Mechanisms

The courts have also acted in this area. In a recent decision in Toll Brothers v. West Windsor, the Appellate Division reaffirmed that settlement agreements and consent judgments in exclusionary zoning cases - even those entered 15 years ago - remain in force until modified by the courts. Where a municipality has agreed to rezone a property for inclusionary development at higher residential densities, it is not free to thereafter rezone the property unilaterally, even if it now believes that it does need the development to satisfy its constitutional fair share housing obligation. Builders may enforce these settlement agreements and consent decrees in the courts.

If properly invoked by the builder, these procedures and remedies can sometimes rein in a recalcitrant town, moving a development through the approval stage and to actual construction.

Stephen M. Eisdorfer is also a partner within the Land Use Division of Hill Wallack. A Member of the Board of Directors of the New Jersey State Bar Association's Land Use Section, he concentrates his practice in land use litigation, including Mount Laurel litigation and litigation involving the civil rights statutes.