COAH Fails To Meet Court-Ordered Adoption Deadline in New Jersey

October 2014Articles In the Zone

On October 20, 2014, the Council on Affordable Housing (COAH) met to adopt the third iteration of the Third Round Rules. This iteration was in response to the New Jersey Supreme Court’s Order on March 14, 2014, which mandated that COAH adopt Third Round Rules on or before October 22, 20141 for publication in the November 17, 2014, New Jersey Register. The order arose out of motions filed by Fair Share Housing and related parties addressing the delay in COAH’s rulemaking in response to the Supreme Court’s invalidation of the second iteration of the Third Round Rules in In re Adoption ofN.J.A.C. 5:96 and 5:97 215 N.J. 578 (2013).

COAH had “successfully” met the prior deadlines established by the court’s March 14 order in proposing its new iteration of Third Round Rules. However, more than 3,000 comments were received from municipal, affordable housing and residential developers, criticizing the rules for their obvious flaws. In accordance with the court’s order, COAH held a public hearing on July 2, 2014, to receive comment on the rule proposal. Public comments stressed the flaws permeating these rules.

At its meeting on October 20, 2014, COAH considered the rules for adoption. Initially, members of the council moved to table adopting the rules for 60 days, coupling this motion with a request for additional time for the Supreme Court to address the time limitation set forth in the March 14, 2014, order. This motion failed by a 3-3 vote. The motion was then made to adopt the rules as presented to the council, and that motion similarly failed by the same 3-3 vote.

The importance of this action is clear. The Supreme Court’s March 14, 2014, order expressly provided that the council adopt the proposed rules before October 22, 2014, and transmit those rules to the Office of Administrative Law (OAL) for publication in the New Jersey Register for the November 17, 2014, edition. By failing to adopt the rules, COAH is simply not able to meet the October 22, 2014, deadline under the Sunshine Law. Certainly, it is possible that the council may take emergency action to transmit rules for publication in the OAL, although any emergency rule adoption would be of questionable legal authority.

In the event that the council does not take a corrective action that allows the rules to be published by November 17, 2014, the Supreme Court specifically permitted motions in aid of the litigant’s right to lift the protections provided to municipalities in accordance with the Fair Housing Act N.J.S.A. 52:27D-313 and thereby allow the commencement of builders’ remedy challenges against specific municipalities.

COAH’s failure to adopt the rules as presented at its October 20, 2014, meeting is likely to result in a substantial flood of lawsuits both by builder/landowners seeking to enhance density through the builder’s remedy, and municipalities flocking to the protection of the courts by filing declaratory judgment actions pursuant to N.J.S.A. 52:27D-317. In either case, the result will be the same: a flood of lawsuits in the judicial system seeking to address the municipal affordable housing obligation as a direct result of COAH failing to take action by the Supreme Court’s deadline.

Developers and landowners should seriously consider whether builders remedy litigation would afford the opportunity to enhance density and enable development of projects on property that is suitable for such higher density development. In the alternative, municipalities are left with no recourse but to seek declaratory judgment protection by voluntarily submitting themselves to judicial oversight.

Regardless of which party is before the courts, the problem remains: what are the rules that will govern the evaluation of municipal compliance with the Mt. Laurel Affordable Housing Obligation? The Supreme Court’s straightforward answer in In re Adoption of N.J.S.A. 5:96 and 5:97, 215 N.J. 578 (2103) would likely result in a strict application of the previously adopted rules under N.J.A.C. 5:92 and 5:93, which established a relatively straightforward and readily comprehensible methodology by which to calculate municipal affordable housing need and a series of well-tested options by which municipalities may address that need. Regardless of the outcome, this issue has reached a constitutional crisis. How the Supreme Court addresses this crisis will determine much as to the future of affordable housing in the State of New Jersey.

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1 See Order here: http://origin.library.constantcontact.com/download/get/file/1102308224571-43/140314+Supreme+Court+Order+Granting+Mtn+Time+to+Extend.pdf