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Toll Brothers, Inc. v. Township of West Windsor

303 N.J. Super. 518, 697 A.2d 201 (Law Div. 1996)

MUNICIPALITIES; ZONING; DEVELOPERS; MOUNT LAUREL—New Jersey law requires municipalities to open their doors to families of all income levels. When a municipality uses administrative and other devices to thwart that requirement, a court can order the municipality to revise its zoning and to grant specific remedies to a builder seeking to develop new and affordable units.

In 1973, the Supreme Court of New Jersey recognized the constitutional principle requiring municipalities to open their doors to families of all income levels, thereby barring exclusionary zoning practices. To implement this mandate, a procedure was established for each municipality to identify the number of housing units which represent its “fair share” of low and moderate housing. Inclusionary zoning is one way of meeting the fair-share obligation. An inclusionary zoning site is a residential housing development in which a substantial percentage of the housing units are provided for a “reasonable income range of low and moderate income households.” A municipality’s zoning policies must also create a “realistic opportunity” for construction of new housing. In 1985, West Windsor township’s fair share of low and moderate income housing was determined to be 592 dwelling units. From 1982 to 1992, the number of houses in West Windsor increased from 2,907 to 6,115, but only 139 were constitutionally mandated affordable units, as most new residents generally purchased high priced houses. A large housing developer and owner of a 293-acre tract of land in West Windsor brought an action against the township alleging it engaged in a pattern of exclusionary zoning in violation of the New Jersey Constitution and the New Jersey Fair Housing Act. The developer argued that this was done in a number of ways, including environmental constraints, public sewer policies, public resistance, processing delays, expensive building requirements and restrictive zoning requirements on those units within the inclusionary sites. The developer further contended West Windsor’s market plan failed to create a realistic opportunity for inclusionary development and sought a site-specific builder’s remedy of rezoning its property to permit the construction of between 625 and 650 conventional single-family houses and 110 to 115 low and moderate income housing units.

The Court was called upon to review the continuing constitutionality of a plan originally approved by the Court in 1986, but which has yet to produce an adequate number of affordable housing units. The Court determined that there is a legitimate question about whether West Windsor’s compliance plan created a realistic opportunity for inclusionary development, and placed the burden on West Windsor to prove why certain sites have not been developed for affordable housing. The Court’s analysis was guided by case law holding that municipal compliance with the fair share housing obligation is measured by the actual success in providing affordable housing, and that a municipality’s good intentions or adoption of plans that fail to create a realistic likelihood of production of affordable housing does not satisfy the constitutional requirements. At the very least, municipalities must remove all municipally created barriers to development of affordable housing, such as zoning restrictions, and unnecessary costs should be avoided so that units can be built and marketed profitably. The Court stated that a strong factor was the development of West Windsor’s housing market since 1982. Despite tremendous growth, only 4% of the units constructed met the constitutional requirements. They found that West Windsor’s construction ordinances require developers to “front-end” the costs of development and that this discourages development, and that many of the sites zoned for inclusionary housing are subject to so many requirements as to minimize their consideration as realistic opportunities for inclusionary development. As a result of these and other factors, West Windsor’s inclusionary housing plan does not create a realistic opportunity for development of fair share affordable housing, and thus is not in compliance with the Supreme Court mandate. The Court also stated market demand is a factor that must also be considered when ruling on the constitutionality of relevant municipal ordinances. The Court concluded that West Windsor’s ordinances restrict the opportunity to develop inclusionary sites by failing to adequately reflect the actual and anticipated market demand for various types of housing. The solution is to have flexible ordinances that will provide opportunities for builders to respond to market demand by being able to construct affordable housing most likely to create demand. Where a municipality’s zoning plan fails, the Court must order the town to revise it, and may grant a builder’s remedy. Accordingly, the Court found in favor of the developer.


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