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Penn Farm Group v. The Township of Pohatcong

A-3804-97T1 (N.J. Super. App. Div. 2000) (Unpublished)

MOUNT LAUREL—It is for a municipality, not a court, to decide what inducements are necessary and reasonable to motivate a property owner to build Mount Laurel housing that would satisfy a municipality’s constitutional obligations.

Two residential developers filed an action against a municipality seeking to have property rezoned for a large scale residential development containing some units affordable to low and moderate income families. In settlement of the actions, the municipality agreed to rezone the property belonging to each of the developers. “Thereafter, a court-appointed master recommended approval of the settlement, concluding that both sites were suitable for the proposed developments and that the proposed construction of lower income housing on the sites would bring the [municipality] into compliance with its Mount Laurel obligation.” A compliance hearing was begun, but during the pendency of the hearing, there was a change in the methodology for determining a municipality’s Mount Laurel obligation. This resulted in substantial reduction in the municipality’s obligation. As a result of this reduction, the municipality entered into a new agreement solely with one developer to satisfy that obligation. The Court then issued a comprehensive oral opinion following the compliance hearing, approving the settlement agreement between the municipality and that single developer. The other developer appealed, arguing that the lower court erred in approving the compliance plan because the proposed development did not conform to the State Development and Redevelopment Plan. It also argued that the plan for development of the other developer’s site would result in construction of an excessive number of market units. The Court decided not to dismiss the appeal on procedural grounds. Instead, it addressed the merits of the disappointed developer’s arguments. “The purpose of a Mount Laurel compliance hearing is ‘to ensure that the settlement adequately protects the interests of the lower-income persons on whose behalf the suit was brought.’” The Court was satisfied that the approved plan provided that realistic opportunity. The municipality’s planner had concluded that the approved site was appropriate for Mount Laurel housing. Further, the Court was impressed that the developer’s planner “testified that he had met with the representatives of the State Planning Commission, and they viewed the site as an appropriate ‘center.’” Moreover, the Committee on Affordable Housing approved the municipality’s judgment of compliance, thereby confirming that the municipality’s compliance plan conformed with their rules and regulations. The Court also rejected the disappointed developer’s argument that the judgment of compliance should be reversed because the approved development plan was larger than would be required to satisfy the municipality’s Mount Laurel obligation. “So long as a municipality’s fair-share plan creates a realistic opportunity for the construction of the lower income housing required to satisfy its Mount Laurel obligation and is consistent with sound zoning principles, it must be approved by the Court.” According to the Court, “[i]t is for the municipality, not the court, to decide ‘what inducements are necessary and reasonable to motivate a property owner to build the housing that would satisfy the municipality’s constitutional obligation.’”

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