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Livingston Builders, Inc. v. Township of Livingston

309 N.J. Super. 370, 707 A.2d 186 (App. Div. 1998)

ZONING; MOUNT LAUREL—In reaching a Mount Laurel settlement, it is up to the municipality, not the court, to determine what is necessary and reasonable to motivate a developer. If otherwise lawful, a municipality may rezone land to facilitate such a settlement.

The New Jersey Supreme Court has upheld part of the Fair Housing Act and stated that municipalities have a constitutional obligation to provide, through land use regulations, a realistic opportunity for a fair share of its region’s present and future needs for housing for low and moderate income families. Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 92 N.J. 158, 456 A.2d 390 (1983). In this case, a real estate developer reached a Mount Laurel settlement with the municipality by agreeing to develop 125 assisted-living units for senior citizens, 19 of which were set aside for low and moderate income occupants, on a portion of its 10 acre tract. The settlement was contingent on the municipality re-zoning the 10 acre tract to permit the developer to build an office building on the remainder of the land. A local civic association objected to the settlement because of the contemplated re-zoning and office development. After a hearing to determine the fairness of the settlement, the Law Division found that development of the office building would be inconsistent with the principles of Mount Laurel. On appeal, the developer argued that re-zoning for mixed use was consistent with Mount Laurel, and that the Law Division’s holding intruded “into the realm of municipal planning discretion.” The developer also appealed the lower court’s holding that the settlement was illegal “contract zoning,” which refers to a municipality’s attempt to contract with a property owner to authorize the owner to use its property in contravention of a zoning ordinance, and without compliance with the statutory procedures for obtaining a zoning variance or without amendment of the master plan and zoning ordinance.

Upon review, the Appellate Division held that a trial judge must approve a settlement of Mount Laurel litigation if a fairness hearing demonstrates that the settlement satisfies all of the criteria established to insure that a municipality complies with its constitutional requirement to protect the interests of lower income people. The Court stated that how a municipality satisfies its obligations and how it zones or rezones property within its boundaries is not a Mount Laurel issue. Appropriate zoning is a decision strictly left to a municipality’s governing board and planning board, subject only to the Municipal Land Use Law. Accordingly, the Appellate Division found it improper for the Law Division to veto part of the municipality’s proposed settlement on the grounds that the 10 acre tract could support more housing units than planned if the developer chose to do so. In its view, it is up to a municipality, not a court, to determine what is necessary and reasonable to motivate a developer. It also found no illegal contract zoning, because the proposed settlement was included in the master plan and was contingent on the adoption and survival of all necessary ordinances. The Appellate Division reversed the Law Division’s holding and tentatively approved the settlement, withholding final approval until all necessary ordinances have been validly adopted and upheld, and all other conditions precedent to approval of the settlement have been satisfied.


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