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In Re Fair Lawn Borough

406 N.J. Super. 433, 968 A.2d 180 (App. Div. 2009)

COAH — When a municipality does not satisfy its previously unmet need for affordable housing, COAH does not need to remove, from the municipality’s plan, a viable property that had been included in the municipality’s affordable housing plan and need not conduct a substantive review of a municipality’s subsequent housing plan application under such circumstances.

A municipality received approvals from the New Jersey Council on Affordable Housing (COAH) for its second-round affordable housing plan. The approved second-round plan included the construction of affordable housing. However, in order for the developer to be able to construct affordable housing on the site, the municipality needed to adopt an overlay zoning ordinance. COAH ordered the municipality to adopt an overlay zoning ordinance. The municipality failed to do so.

About nine years later, the municipality adopted an overlay zoning ordinance, but the developer challenged the ordinance, claiming that the ordinance did not provide for sufficient density to satisfy the municipality’s affordable housing obligations. The developer sought a builder’s remedy that would have allowed it to commence development of its site. The lower court found that the overlay ordinance was invalid, but transferred the matter to COAH. In the interim, the municipality filed its third-round affordable housing plan. The plan did not include an overlay zoning plan to replace the invalid one. The municipality also advised COAH of its intent to file an amended third-round plan that did not include the developer’s property, but included other properties. COAH concluded that, in light of the municipality’s history of noncompliance with its second round plan obligations, the purposes of the Fair Housing Act were best served by dismissing the municipality’s third round application.

The municipality appealed, arguing that COAH failed to conduct a substantive review of the municipality’s third round affordable housing plan application, and that it should have been permitted to submit an amended third round plan to meet its affordable housing obligations without including the developer’s property. To the municipality’s disappointment, the Appellate Division affirmed. The Court found that when a municipality does not satisfy its previously unmet need for affordable housing, COAH does not need to remove, from the municipality’s plan, a viable property that had been included in the municipality’s affordable housing plan for more than a decade. The Court found substantial credible evidence of the municipality’s persistent noncompliance with its affordable housing obligations over a long period of time. Further, there was no requirement for COAH to consider an amended third round plan allowing the removal of the developer’s property without evidence that the site was no longer appropriate for inclusion in the affordable housing plan. The Court noted that the municipality’s reasons for removing the site, presumably its environmental concerns, had never previously been raised. In addition, the property was in the process of being remediated, following which it could be developed. The Court found that COAH is not obligated to sanction a “shell game” where a municipality repeatedly substitutes properties for use in its affordable housing plan obligations.


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