The state Supreme Court is again tackling the twin problems of providing affordable housing in New Jersey towns and preventing municipal zoning that attempts to exclude it.
For nearly five hours on Wednesday, the court heard arguments over whether the Council on Affordable Housing should adopt proposed regulations that use “growth-share methodology” to set municipalities’ fair-housing obligations based on projected rates of housing or job growth.
The New Jersey State League of Municipalities, joined by several local governments and COAH, urged the court to allow use of growth-share to satisfy the Mount Laurel doctrine, which require municipalities to allow for construction of affordable housing units based on local and regional needs.
Conversely, the Fair Share Housing Center, joined by builders and developers, asked the court to uphold the Appellate Division’s rejection of the method, which they say allows municipalities to exclude affordable housing by manipulating the need for it.
Edward Buzak, representing the League of Municipalities, told the court it was time to move on from Mount Laurel, saying municipal governments now recognize their obligations.
“This is a very different landscape from 1975 and 1983,” said Buzak, who runs a firm in Montville. “Maybe it’s time to take another look at the issue.”
Justice Jaynee LaVecchia, who presided in the absence of Chief Justice Stuart Rabner, asked Buzak how growth-share would stack up against a system that has produced “demonstrable results” in the form of actual affordable housing.
“The beauty is that you get results automatically,” replied Buzak. He said growth-share requires that if hypothetical projections for a particular town show there will be a need for five houses, one of those will have to be priced for low- or moderate-income buyers. Or, if there is a projection that 16 jobs will be created for a particular town, there must be one unit of affordable housing.
Justice Anne Patterson said the proposed rules are voluntary for municipalities.
Buzak said that if a municipality chose to project no future growth, a developer could invoke the “builder’s remedy” — seeking permission from a court to build housing that a town’s zoning law prohibits.
Justice Barry Albin asked if there were projections of how many affordable housing units might be created in the coming years.
Under the current system, there are about 2,000 created per year, Buzak said. Under growth-share, that could increase to 4,000 units per year, “but if there is no growth, the need is not created.”
Jonathan Drill, representing a group of 10 suburban northern New Jersey towns, asked the court to adopt growth-share but he suggested towns be required to set aside 10 percent of all future housing for low- and moderate-income buyers.
“A flat 10 percent, mandatory across the board,” said Drill, of Cedar Grove’s Stickel, Koenig & Sullivan.
Albin asked how regional needs would be met, as is required now under the Mount Laurel rulings and the Fair Housing Act of 1985.
Drill said the focus should be on a single municipality’s affordable housing needs as well as regional needs. The Fair Housing Act is a “snapshot in time” that no longer applies, he observed.
Opposing growth-share was Kevin Walsh, the counsel and associate director of the Fair Share Housing Center, an advocacy group for affordable housing.
He said that approximately 60,000 affordable housing units have been built since the Mount Laurel rulings and that there is no reason to turn away now.
“We’ve created 60,000 homes in municipalities that otherwise would not have allowed them,” Walsh said. “We should be proud of that.”
Under the proposed methodology, there would no longer be affordable housing quotas. “You’d have people sitting there waiting for growth to occur,” Walsh said. “That’s a completely impractical way to develop housing in New Jersey.”
Albin asked whether, realistically, that could happen.
Walsh said a municipality could decide to have no growth, and thus would have no affordable-housing obligation.
“Our position is that growth-share gives municipalities too much discretion,” he said. “The reason we have 60,000 homes is because we checked those tendencies” to adopt exclusionary zoning ordinances. “Don’t dismiss a record of success.”
Stephen Eisdorfer, representing the New Jersey Builders Association, also urged rejection of growth-share.
“Projected growth is just a set of targets controlled entirely by zoning,” said Eisdorfer, of Hill Wallack in Princeton. “You cannot choose not to grow in order to exclude the poor.”
Deputy Attorney General Geraldine Callahan, representing COAH, joined with the League and local governments in asking the court to allow the council to use growth-share.
She said the Mount Laurel rulings did not mandate one single method for determining a municipality’s fair share of affordable housing, adding that the courts should defer to COAH to determine how to achieve a proper balance.
Albin said the Fair Share Act still requires a regional approach that does not seem to be present in the growth-share methodology.
Callahan disagreed, saying the formula was developed by using statistics from various regions of the state. “We are at a point in time where a different approach should be used,” she said.
Patterson asked why.
“Every municipality knows it has a constitutional obligation and that it cannot bury its head in the sand,” Callahan said. “They know they can’t enact the type of zoning ordinances that they did before Mount Laurel.”
Brielle attorney Jeffrey Surenian, representing Atlantic Highlands and Middletown, said he was not taking a position on growth-share.
“What do you want?” Albin asked.
“I want you to give COAH the ability to say regulation leads to an unreasonable result, the agency should be able to correct it,” said Surenian. “There seems to be something missing and we’re asking you to fix it.”
Kevin Moore said his client, the New Jersey chapter of the National Association of Industrial and Office Properties, opposes growth-share because it could encourage municipalities not to allow for commercial construction at all, since affordable housing units would be based on jobs created.
“It would be financially detrimental for a municipality to grow,” said Moore, of Newark’s Sills Cummis & Gross.
Jeffrey Kantowitz, representing a developer, Kings Row Homes LLC, said there is nothing in the record to demonstrate that growth-share would work.
“The record doesn’t have any information on it,” said Kantowitz, of Day Pitney in Parsippany. “That’s a very important point.”
Throughout the hearing, Albin kept referring to the 60,000 units of affordable housing built between 1985 and 2008. For comparison purposes, he wanted to know how many total housing units were built in New Jersey during the same period.
It was Kantowitz who finally came up with the answer after consulting with a developer in the audience. During that time, approximately 765,000 housing permits were issued, he said.
The case is In the Matter of the Adoption of N.J.A.C. 5.96 and 5.97 by the New Jersey Council on Affordable Housing, A-91/92/93/94-10.