Suppose a developer owns a 276-unit garden apartment complex in a General Business Zone, where garden apartments are a permitted conditional use, and the developer seeks approval for an additional 55 apartments in an adjoining 6.93-acre tract. And suppose that an ordinance eliminating garden apartments as a permitted use in the zone is introduced, scheduled for public hearing and enacted during a month-and-a-half period, with specific notice to the developer 18 days before enactment. And finally, suppose that the developer submits its 55-unit application one day before the prohibitory zoning ordinance is enacted. On these facts, are the 55 units treated as a permitted use or a prohibited use?
Prior to May 5, 2011, the decisions of the municipal board, the Law Division, the Appellate Division and the Supreme Court would be bound by the prohibition of garden apartments in the General Business Zone so long as the prohibitory ordinance became effective prior to any such decision. Under this common law “Time of Decision Rule,” zoning amendments were binding as to any decision that had not yet been rendered.
But effective May 5, 2011, legislation changed the rule. Except in health and public safety circumstances, “those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application. . . .” N.J.S.A. 40:55D-10.5. No matter when a decision is handed down, ordinances “adopted subsequent to the date of submission of an application for development[,] shall not be applicable to that application for development.” Id. The new “Time of Application Rule” now controls.
As a result, municipalities can no longer play games, changing the ground rules for development even on the eve of appellate argument. But what about developers? Suppose business reasons suggest that they wait with their application until the last minute before the zoning changes? Suppose not just one developer but many submit applications for development a day or two before the use applied for is prohibited by a pending ordinance? Does N.J.S.A. 40:55D-10.5 put the shoe on the other foot? Where communities have studied a complex situation, and created a good, perhaps subtle solution, can they be deprived of the power to change what happens on the ground?
There is no definitive answer yet, but the Supreme Court recently showed good sense in tightening the “Time of Application Rule.” In Dunbar Homes, Inc. v. Zoning Board of Adjustment of Franklin Township (June 20, 2018), a unanimous decision written by Justice Solomon, the Court held that the Rule’s trigger—the “application for development”—required submission of “the application form and all accompanying documents required by ordinance. . . .” N.J.S.A. 40:55D-3. The court’s reason was simple: the statute contains a definitional section and the definition of “application for development” contains the quoted language.
In Dunbar, the day-before-enactment case outlined above, the municipal zoning officer found the developer’s application to be deficient. For example, the application lacked topography and contour elevation data, disclosure of solid waste facilities methods and placement, drainage calculations and a site plan showing domestic water demand and the amount of effluent. The developer did not dispute the deficiencies. As a result, the developer was not allowed to benefit from the Time of Application Rule. The changed zoning—the prohibition of garden apartments in the General Business Zone—applied and the developer could not proceed.
In our view, the Supreme Court in Dunbar has carefully threaded the needle, implementing the legislative decision to prevent municipalities from impeding development, while making it difficult for developers to utilize last-minute tactics that thwart well-conceived community plans.