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Landmark at Radburn, L.L.C. v. Borough of Fair Lawn

BER-L-8226-07 (N.J. Super. Law Div. 2009) (Unpublished)

COAH — Even though the affordable housing world may be “in a state of uncertainty,” if a municipality fails to adopt local legislation that is needed to fulfill all of its then-known obligations, the municipality is non-compliant with the law.

The Council on Affordable Housing (COAH) computed a municipality’s “fair share” affordable housing obligation. Accordingly, COAH required that the municipality to adopt overlay zoning for various undevelopable lots to allow affordable housing opportunities if the status of these properties changed in the future. Nearly nine years after the COAH certification, the municipality finally adopted an overlay zoning ordinance to address its unmet need of affordable housing units. This ordinance was challenged and the Law Division declared the zoning efforts invalid. The municipality did not attempt to remedy the defects in the ordinance and did not implement a new ordinance. Instead, the municipality advised COAH that it would satisfy its fair housing obligations by taking “other action.” The municipality then petitioned the COAH for substantive certification that it had met its fair housing obligations. The COAH dismissed the petition finding that the municipality failed to comply with its obligation to provide overlay zoning. During these proceedings, a developer protested the municipality’s actions, claiming that the municipality was practicing exclusionary zoning. The municipality also challenged the COAH’s dismissal of its petition by filing an appeal with the Appellate Division.

The Law Division held that if the municipality was successful in reversing the COAH’s dismissal in the Appellate Division, the Law Division would not have jurisdiction to handle this dispute. Pending such a determination by the Appellate Division, the Law Division held it had jurisdiction to rule on the propriety of the municipality’s zoning activities. It held that the motivation and state of mind of the municipality’s governmental actors were not relevant considerations in determining if it had satisfied its fair housing obligations. Noting that the affordable housing world was “in a state of uncertainty” at the time the municipality was considering zoning action because the Appellate Division had invalidated certain COAH regulations, the Court opined that the municipality could not be faulted for failing to appreciate exactly the contours of its fair share obligation. Nevertheless, it held that, while the numbers and methodology were in flux, the underlying obligations did not vanish. Even discounting the growth share (which increased materially after the COAH amended its fair housing calculations), the Court ruled that since the municipality failed to adopt local legislation that would be needed to fulfill all of its then-known obligations (as of the date that the COAH dismissed the municipality’s petition), the municipality was non-compliant with the law.

While the municipality claimed that credits derived from the construction of affordable units satisfied its fair share obligation, the Court found that the municipality’s obligation also required the enactment of two zoning amendments which never took place. The Court held it was obligated to measure compliance by executed actions, not by unfulfilled promises of future performance. Otherwise, it believed that municipalities could pull the rug out from underneath a developer by merely offering up proposals, rather than done deeds. Thus, it ruled the municipality’s future plans to rezone certain sites within its boundaries were not sufficient to satisfy the fair housing laws. It also ruled that since municipalities unilaterally control the scope of their own land use regulations, it was not too much to ask that they actually adopt, by ordinance, all the components of the regulatory scheme that they claim provide realistic opportunities for affordable housing. Accordingly, the Court declared the municipality’s land use regulations invalid and appointed a Special Master until the Appellate Division decided the pending appeal regarding COAH’s dismissal of the municipality’s petition. The Special Master was to assist the municipality in reaching a compliant plan to provide realistic opportunities for affordable housing and to focus on the builder’s remedy proposal and engage in mediation efforts between the parties. Consequently, the Court held that the municipality was exposed to a site-specific builder’s remedy because it failed to comply with the statute and enact appropriate ordinances.

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