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Rosenshein Associates v. Borough of Palisades Park

304 N.J. Super. 438, 701 A.2d 448 (App. Div. 1997)

ZONING; MOUNT LAUREL—This is a “Mount Laurel II” case, again addressing a municipality’s reluctance to provide for “affordable housing.” Even though the developer that got a court to order the municipality to change its land use ordinances so as to permit the developer to build its project went into bankruptcy, the approvals could not be withdrawn under the municipality’s theory that the insolvency violated the “reasonable opportunity” requirement stated by the New Jersey Supreme Court in its “Mount Laurel II” decision. “Reasonable opportunity” is a standard to be applied to the municipality and not to the developer. To do otherwise would be to turn “Mount Laurel II” on its head.

A residential developer successfully sued the Borough of Palisades Park to rezone certain land in a way that would satisfy the ruling in Southern Burlington County N.A.A.C.P. v. Mount Laurel Township, 92 N.J. 158 (1983) (“Mount Laurel II”). On the developer’s motion for partial summary judgment, the trial court determined that the Borough’s ordinances failed to provide a realistic opportunity for the construction of low and moderate income housing. Later, the Court granted the developer a “Builder’s Remedy” under Mount Laurel II, thereby allowing residential development of the developer’s property, the last vacant land in the Borough. During the course of the litigation, the developer failed to pay (disputed) property taxes and filed for bankruptcy. Then, the Borough relying on Mount Laurel II’s standard that “every municipality’s land use regulations should provide a realistic opportunity for decent housing,” claimed that the developer’s financial condition evidenced that the proposed project was not a “realistic opportunity.”

The Appellate Division said this argument turned the law on its head. It refused to extend the plain language of the Mt. Laurel II decision, stating that an assessment of the “realistic opportunity” for affordable housing is to be made to determine whether the municipality has complied with the constitutional obligations set forth in the Mt. Laurel II decision, and that such an assessment does not include a subjective determination by the Court as to whether it believes that housing will actually be built by a developer. In accordance with Mt. Laurel II, a court must examine and evaluate the property, its suitability for development, the fair share obligation, and zoning and planning ordinances. The Court stated that the critical issue is whether a municipality has in place any zoning or planning scheme designed to include low and moderate income housing, and whether or not such a scheme provides a realistic opportunity for construction of such housing. However, this assessment is not intended to be reciprocal. Therefore, no inquiry into the financial condition of the developer is required. Whether a particular developer will be able to bring the proposed development to fruition may be relevant at some later stage of the development and approval process, but in the context of a Mt. Laurel II analysis, it is irrelevant.


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