Update on COAH and Recent Affordable Housing Decisions

Appellate Court’s Order Mandating COAH Action

            In October 2013, the New Jersey Supreme Court upheld the invalidation of COAH’s Third Round Rules , as set forth in In re Adoption of N.J.A.C. 5:96 &5:97 by Council on Affordable Housing, and upheld the Appellate Court’s remedy which requires that COAH implement revised Third Round Rules within five months  (see our original article here). 

             Five months have come and passed and COAH has done little, if anything, to implement revised Third Round Rules.  In response to Fair Share Housing Center motion in aid of litigant’s rights for such failures, the Appellate Division did little to hide their disdain for COAH’s inaction.  The Court’s March 7, 2014 Order sets forth a specific schedule COAH needs to adhere to for compliance with the Court’s 2013 decision:

             March 16-        Meet as a body to direct the agency to prepare revised Third Round Rules

            March 21-        Have copies of the proposed rules available to the public

            March 26-        Adopt the revised Third Round Rules

            May 14-           Review and consider all public comments and proposed revisions and adopt Third Round Rule

           In the meantime COAH will be required to submit biweekly reports to all those involved in the litigation as to their progress with the adoption of the revised rules.  In addition, any municipality seeking substantive certification during this time must also serve their pleadings with Fair Share Housing Center and other local organizations located within 10 miles which are dedicated to provide low-income and moderate-income housing in the region.

             Finally, and most importantly, the Court’s order unequivocally states that if the COAH Board fails to adhere to this schedule, they do so at their own, personal peril. If the schedule is not met, each Board member will need to appear before the Court “to show cause why he or she shall not be declared in contempt of this court’s authority subject to monetary sanctions, civil detention, and such other sanctions the court may deem suitable to induce compliance with this order.

           Advanced at Branchburg II, LLC v. Township of Branchburg Board of Adjustment

           This November 1, 2013 decision of the  Appellate Division Decision pertains to Affordable Housing being classified as an inherently beneficial use in the context of a use variance application.  The Applicant owns a 31.79 acre property in the municipality’s I-2 Industrial Zone.  The Applicant filed a use variance application to construct a multi-family development consisting of 292 units.  59 of the units, or 20% would be affordable housing and integrated with the market-rate units.  The Applicant’s position was that the inclusion of the affordable housing rendered the entire project inherently beneficial which, therefore, satisfied the use variance’s positive criteria.  The Board found that a 20% set aside was not inherently beneficial and denied the application. 

            The Applicant upheld the denial by relying heavily on two cases.  The first was Homes of Hope, Inc. v. East Hampton Township Land Use Planning Board, 409 N.J. Super. 330 (App. Div. 2009).  In that case, the applicant was proposing to build an eight unit development in which all of the units would be affordable housing.  The court in that case found that the affordable housing units were inherently beneficial.  In the case at hand, the Court sided with the municipality in finding that the addition of affordable housing units to a proposed development in which most of the proposed units are market-rate does not make the entire project inherently beneficial.

             The second case that the Applicant relied on is Medical Center of Princeton v. Township of Princeton Zoning Board of Adjustment, 343 N.J. Super., 177 (App. Div. 2001).  In that case, the Board denied an applicant proposing an addition to an acute care hospital with some “back office” functions in a residential zone.  The court remanded the application to the Board and stated that the Board must determine whether these “back offices” can be subsumed within the scope of the inherently beneficial use.  The analysis which must be made is as follows: 1) identify the proposed use and delineate its function; 2) establish how the proposed use is integrated into the core function of the inherently beneficial use; and 3) establish why the specific location of the proposed use is necessary to advance the purpose of the inherently beneficial use. 

           In the case at hand, the Applicant argued that the market-rate units were integral to the inherently beneficial use because the affordable housing units were not financial feasible without them.  The court did not find this persuasive because in Medical the inherently beneficial use (the hospital) was the predominant use.  Here, the predominant use is the 233 market-rate units, not the affordable units. 

             In its decision the Court found that there is “no basis under our current statutory or decisional law to hold that the inclusion of affordable housing as a relatively small component of a much larger residential development transforms the entire project into an inherently beneficial se for purposes of obtaining a (d)(1) variance under circumstances such as those existing here”.   

             This decision could have major ramifications in the development of inclusionary projects given that the set aside in this case is aligned with the requirements previously required by COAH.  This case will certainly be before the Supreme Court in the near future.

             Please feel free to contact our office directly if you have any questions concerning either of the matters discussed above.

             – By Andrew S. Kohut, Esq.

Andrew S. Kohut is an Associate Attorney who works actively in the Land Use and Real Estate areas.

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