Toll Brothers, Inc. v. West Windsor Township

312 N.J. Super. 540, 712 A.2d 266 (App. Div. 1998)
  • Opinion Date: June 22, 1998

ZONING—A timed growth ordinance was successfully challenged as not being authorized by the Municipal Land Use Law and violating the prohibition against moratoria of greater than six months.

Here, a municipality adopted a “timed growth ordinance.” Its legislative purpose was stated to be to control the rate of growth in the municipality so that the township, county, and state have the opportunity to implement a program of road network improvements until sufficient road capacity has been developed. This was to be done by deferring development until the time when the road improvements are scheduled to be built and phasing-in development during the time scheduled for construction of those improvements. To fulfill that purpose, the ordinance created “basic rights” and “additional rights” within ten districts. A “basic right” was the right to immediately develop a certain percentage of dwelling units permitted within a particular tract under the zoning ordinance. The percentage of dwelling units permitted immediately as a basic right varied from 20% in two of the districts to 50% in one of the districts. “Additional rights” were to be executed over a period of years beginning at some point in the future. In the instant case, the contract buyer of a tract in a particular timed-growth district had “basic rights” equal to 30% of the total number of permitted units and could begin development in accordance with its “additional rights” in the year 2011 at the rate of 6.67% of its additional rights each year. The ordinance gave the developer the option of limiting its development to 60% of the total units permitted under the zoning ordinance and to give up any additional development rights on the tract. In the alternative, the developer could accelerate the exercise of its additional rights by constructing or causing to be constructed all of the road improvements that were necessary to service traffic within and from their district. Lastly, the ordinance permitted acceleration of the exercise of additional rights to the extent that there is road capacity available, but in the instant case, an analysis by the municipality indicated there was no road capacity available as of the year in question.

The developer commenced an action to invalidate the timed growth controls. The lower court, in what the Appellate Division called a “well-reasoned” opinion, granted summary judgment in favor of the developer ruling that state law does not authorize timed-growth controls and that the time-growth controls constitute “a de facto moratorium.” Here, the Appellate Division addressed the moratorium issue.

In its current form, the Municipal Land Use Law prohibits “moratoria on applications for development,” and it prohibits “interim zoning ordinances.” Moreover, to the extent that there is any exception for moratoria or interim zoning ordinances, the state law limits them to a six-month term and requires that they be justified by a “clear imminent danger to the health of the inhabitants of the municipality.” Therefore, in the view of the Appellate Division, the question was whether the municipality’s timed-growth controls constitute a moratorium or interim zoning. The Municipal Land Use law does not define a moratorium. Its ordinary and well understood meaning is a period of permissive or obligatory delay. With that in mind, the Court concluded that the municipality’s timed-growth controls constituted a prohibited moratorium with respect to a developer’s “additional rights.” Suspending exercise of those rights for periods measuring a year in two districts to more than ten years in other districts and then allowing them to be exercised only over a period of time from ten years to approximately fifteen years denies the full enjoyment of the development rights and constituted a moratorium. Another municipality, acting as an intervener, contended that the law only prohibits moratoria on “development applications.” It argued that the municipal ordinance in question did not prohibit such applications and therefore did not violate the state law. The Appellate Division disagreed, and opined that it “offends common sense to believe that a moratorium on applications is prohibited, but a moratorium on full implementation of an approved application is valid.” Reliance on decisions from other jurisdictions which have upheld similar ordinances imposing timed-growth controls was found to be interesting, but not helpful, because those jurisdictions did not have a statutory prohibition equivalent to the Municipal Land Use Law.

Finally, when the Court considered the impact of the developer’s option to build immediately 60% of its development rights, it felt that even though it effected a de facto decrease in density, the mechanism by which it was achieved constituted a permanent moratorium on utilization of 40% of the development rights afforded in the ordinance.