NJ Supreme Court Says Towns Must Catch Up On Affordable Housing
Towns will have to account for a 16-year period when New Jersey didn’t have valid housing rules in place when determining how much affordable housing needs to be built.
The state Supreme Court unanimously ruled Wednesday that the present-day housing needs should include what accumulated during the so-called “gap period,” from 1999 to 2015, when the Council on Affordable Housing failed to come up with rules that satisfied the courts.
The ruling could result in the construction of tens of thousands of homes across the state.
“The Mount Laurel constitutional affordable housing obligation did not go away” in those 16 years, the court said in its ruling. “Municipal responsibility for a fair share of the affordable housing need of low- and moderate-income households formed during that period was not suspended.”
Though technically the Supreme Court modified but upheld a ruling in favor of towns that wanted to begin tallying the obligation in 2015 without looking back, the Fair Share Housing Center, which brought the case, called the ruling an important victory.
“The court ruled that municipalities are responsible for meeting the housing needs which accumulated over a 16-year period — including the Great Recession and a wave of casino foreclosures and the devastation caused by Superstorm Sandy,” said Fair Share spokesman Anthony Campisi. “All things that hurt New Jersey working families really hard, and now the court has ruled that towns have to provide assistance and housing for the families affected.”
The court expanded the Mount Laurel doctrine, though not as expansively as housing advocates and developers sought, said Michael Cerra, assistant executive director for the New Jersey State League of Municipalities, who called it “a middle of the road type decision.”
“It appears the court is attempting to forge a middle ground here that complies in its view with its doctrine. However, they’ve left in its place what will probably be a very complicated, nuanced process to determine what this portion that must be folded into present need will be going forward,” Cerra said.
Cerra said the ruling “will probably create further confusion” in the lower courts and urged the Legislature to get involved – as did the Supreme Court in its decision, incidentally.
“Maybe this decision and the uncertainty for really all the parties that it brings might be the final straw that will create legislative action,” Cerra said.
Campisi said Fair Share doesn’t want the Legislature to get involved, saying the group “can’t imagine a situation” where Gov. Chris Christie would sign a bill expanding access to affordable housing.
“We think that the process that the Supreme Court set up in 2015, which is what we’re operating under, has actually achieved tremendous progress so far and is about to achieve even more progress,” Campisi said. “We think that this ruling is actually pretty clear and that the way to finally resolve all of this is to let the legal process continue like it’s been.”
The court didn’t create a new "category of need" to tally up the pent-up demand, as the trial court concluded, but it said the way that "present need" is calculated needs to be adjusted to cover the gap period. The housing requirement also covers "prospective need," a forecast covering the next 10 years.
The court said the "present need" term “is malleable” and can be adjusted “in order for the constitutional obligation to be fulfilled, not skirted.”
The court said that’s necessary because COAH failed to complete its mission “for a period of time affecting almost a generation of New Jersey citizens.”
“There is no fair reading of this Court’s prior decisions that supports disregarding the constitutional obligation to address pent-up affordable housing need for low- and moderate-income households that formed during the years in which COAH was unable to promulgate valid third-round rules,” it said.
The court specified that the calculations must ensure that the ‘present need’ total doesn’t include people who have died during the gap period, whose incomes are no longer low enough to qualify or whose households are already counted through the established ways of surveying housing units.
Cerra said the exact number of units that will result isn’t known. It will almost certainly be tens of thousands.
“It sets up some goalposts to follow, but the actual determination of it will be returned to lower courts for that determination, which means each party is going to have experts running numbers and formulas, and it’s going to become another battle of the experts,” Cerra said.
“Towns know they’re going to be spending more money – more money on planners, more money on these experts and attorneys, with the outcome uncertain and the final determination date unknown,” Cerra said.
Campisi said Fair Share has estimated a need of 200,000 housing units statewide, covering the period from 1999 to 2026. It has reached settlements with more than 90 municipalities, obliging them to provide for over 30,000 homes.
“Both sides made compromises. So we’ve come down from our numbers a little bit in exchange for getting shovels in the ground quickly, in exchange for identifying particular sites where they’re already market interest for development, so that we can get development done quickly and get homes on the market quickly. And then also in exchange for a real focus on families that need help the most, and that’s specifically very low-income families, renters and people with disabilities,” Campisi said.
“We’re hopeful that dozens of more towns in the next couple months will reach settlements with us” after the court ruling, Campisi said. “Not every town is going to settle, but now judges across the state have a very clear set of guidelines to follow to get those cases adjudicated quickly. So one way or the other, I’m hopeful that we’re going to see a lot of movement over the next couple months in addition to what we’ve already seen.”
The last valid rules expired in 1999. Two sets of so-called “third round” rules were found invalid. Ultimately the Supreme Court declared COAH defunct in 2015 and returned control over affordable housing requirements to court oversight, until new rules were in place or the law changed.
Chief Justice Stuart Rabner abstained from the case. No reason was given, but Rabner would have worked at times on affordable housing issues as then-Gov. Jon Corzine’s chief counsel and attorney general, in 2006 and 2007.
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