By Thomas F. Carroll, III, Esq.

The Council on Affordable Housing (“COAH”) has been statutorily obligated to enforce the MountLaurel doctrine since 1985, at which time the New Jersey Legislature enacted the Fair Housing Act.  It has not operated with lawful regulations since 1999, and it has ceased to be an active, effective agency.  Governor Chris Christie has now complicated matters with his issuance of a “Reorganization Plan” designed to abolish COAH.

The Background

Up until 1999, COAH fulfilled its obligations, having overseen the provision of tens of thousands of affordable housing units, along with the market rate housing that accompanied the affordable housing.  In short, COAH was a functioning, responsible agency during the first and second “rounds” of COAH compliance.

However, the third round began in 1999, and COAH has failed to meet its statutory and constitutional obligations during the 12 year period that has elapsed in the interim.  COAH did not adopt any third round regulations until late 2004, and those regulations were invalidated by the courts because they did not faithfully satisfy the constitutional requirements of the MountLaurel doctrine.  COAH then adopted a second version of third round regulations in 2008 and, in October 2010, the Appellate Division found them unconstitutional as well.  COAH was ordered to adopt yet another set of third round regulations by this past March, but it acquired a stay of its obligation to do so. 

Numerous appeals contesting the Appellate Division’s October 2010 opinion are now pending in the New Jersey Supreme Court.  Legislative efforts during 2010-2011 to replace the COAH process stalled, with both houses of the Legislature and Governor Christie being unable to reach agreement on a legislative solution.  As the parties to the appeals await the Supreme Court’s decision (with such a decision likely being months away), the terrain has again shifted with Governor Christie’s issuance of a “Reorganization Plan” proposing to abolish COAH entirely.

Governor Christie’s Reorganization Plan

On June 29, 2011, Governor Christie issued his Reorganization Plan designed to abolish COAH.  Unless both houses of the New Jersey Legislature pass a concurrent resolution within 60 days disapproving of the Reorganization Plan (“RP”), the RP will become effective and COAH will be formally abolished.

The passage of a concurrent resolution disapproving of the RP is considered unlikely and, unless litigation results in an invalidation of the RP (and no such litigation has yet been filed), there is a good chance that COAH will be formally abolished on or about August 28, 2011.  COAH has not been meeting with any regularity or processing municipal lower income housing plans since October 2010, at which time the Appellate Division invalidated numerous COAH regulations, and it is not clear whether they will meet again.

The RP further states that the Department of Community Affairs (“DCA”) will assume the duties and obligations of COAH.  However, a press release from the Governor’s Office notes that the Reorganization Plan is being instituted because the Governor has “always believed that municipalities should be able to make their own decisions on affordable housing without being micromanaged and second guessed from Trenton.” 

New Regulations Coming?

The RP itself hints that the DCA will be adopting new regulations sometime in the future.  Thus, while the regulated community has been waiting for constitutional regulations since 1999, with COAH’s most recent set of regulations now under review by our Supreme Court, the “rules of the game” may change yet again.  In any event, it is difficult to be optimistic about effective DCA enforcement of the constitutional Mount Laurel obligation when it is accompanied by a statement indicating that “municipalities should be able to make their own decisions on affordable housing.”  The core of the MountLaurel doctrine is that municipalities should not be able to make their own decisions on affordable housing, since it was municipalities’ affinity for exclusionary zoning that necessitated the MountLaurel doctrine in the first place.

Impact on the Current Supreme Court Cases

Another question raised by the RP is its effect on the Supreme Court proceedings in which the Court is considering whether the Appellate Division’s decision invalidating COAH regulations should be affirmed.  A related question is the remedy the Supreme Court might employ to address compliance with the Mount Laurel doctrine given the invalidation of the COAH rules and the slated abolition of COAH.  It is difficult to imagine, after 12 years of COAH delay in enforcing the MountLaurel doctrine, and now the RP, that the Court will do anything but appoint a master to oversee compliance with the constitutional obligation.  Time will tell.

Builder’s Remedy Suits Now More Viable?

Another question posed by the RP is whether it is now easier to sustain builder’s remedy suits filed against towns that have previously filed fair share plans with COAH.  When COAH was a functioning agency, it was routine to transfer such suits to COAH for handling.  However, at least one court has recently declined to transfer such a suit to COAH, even when COAH was ostensibly a functioning agency, since COAH did not provide an adequate administrative remedy.  Now that COAH is being formally abolished, the viability of builder’s remedy suits may be enhanced, even as to towns that have filed fair share plans with COAH, although different judges may view the impact of the RP differently.  One thing is certain at this time – if any forum is going to enforce the Mount Laurel obligation, it is the courts.

An Impetus to Legislation?

Observers of the political scene wonder whether the RP will increase the pressure on the Legislature and Governor to agree upon legislation that implements the MountLaurel doctrine in a constitutional manner.  Such legislation would be the preferred solution to the endless litigation over satisfaction of the MountLaurel doctrine if the legislation does not seek to impose uncompensated burdens on those who are asked to provide lower income housing, and it is otherwise constitutional. 

In recent years, opponents of affordable housing have sought to advance the proposition that municipalities can satisfy their constitutional Mount Laurel obligations by leaving their zoning as is, but requiring builders to provide lower income housing as part of their developments in the absence of density bonuses or any other compensatory benefits.  This is often called the “growth share” approach. 

However, the very essence of the MountLaurel doctrine is that municipalities must eliminate at least some of their exclusionary zoning, so that housing affordable to all can be provided.  It is hoped that the Legislature, the Governor and the courts will keep this concept in mind as matters move forward.