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Heritage at Independence, LLC v. The State of New Jersey

A-4645-08T3 (N.J. Super. App. Div. 2010) (Unpublished)

HIGHLANDS ACT; AFFORDABLE HOUSING — The Highlands Act does not foreclose new affordable housing opportunities because it affords the remedy of applying for a waiver to be decided on a case-by-case basis.

A developer sought to develop a 118-unit development consisting of 104 age-restricted units and 14 affordable housing units. The property was located within two municipalities and was considered to be environmentally sensitive lands within the Highlands Preservation Area. The municipal planning board in one of the municipalities declared the developer’s application for site plan approval complete, provided that the developer either obtained approval or an exemption from either or both of the Highlands Council or the New Jersey Department of Environmental Protection (NJDEP) and that it obtained water and sewer service from the neighboring municipality’s utility authority.

Unless exempt, the Highlands Act revoked all sewer and water services to any property within the Highlands Preservation Area if the property did not have a waste water collection system installed by August 10, 2004. It also prohibited the extension of water services to any new developments within the Highlands Area, unless exempt. The developer’s property did not have a water or sewer collection system installed by the deadline, and thus was not. However, the developer did not apply to the NJDEP for either a Highlands Permit or a permit waiver. Instead, the developer sued. It alleged that the Highlands Act was unconstitutional because the legislature did not plan for any affordable housing within the Highlands Preservation Area prior to the promulgation of the Highlands Act. It also argued that the Highlands Act was unconstitutional as applied. The lower court granted the State’s motion for summary judgment, finding none of the prior regional land use regulations required the preparation of an affordable housing element before being implemented. The lower court also rejected the developer’s argument that the Highlands Act, as applied, was unconstitutional because the developer did not apply for a permit or a permit waiver first. The developer appealed, but the Appellate Division affirmed.

In doing so, the Court found that the Highlands Act provided municipalities with an opportunity to meet their affordable housing obligations while preserving environmentally sensitive areas. Contrary to the developer’s claim, the Highlands Act did not represent the legislature’s intention to sacrifice affordable housing interests in order to preserve environmentally sensitive areas. Instead, the legislature intended to have the Highlands Act work in tandem with affordable housing and other regulatory schemes in the area. The Court also found that, contrary to the developer’s assertion that the Highlands Act had foreclosed new affordable housing opportunities, the Highlands Act afforded the remedy of applying for a hardship waiver which would be decided on case-by-case basis. However, the Court noted that this particular developer chose not to apply for the waiver and instead decided to challenge the constitutionality of the statute.

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