Published December 1, 2016
By Colleen O'Dea

In arguments before state Supreme Court, justices seem to favor idea that cities and towns are responsible for 16 years no affordable-housing rules were in effect

The New Jersey Supreme Court on Wednesday heard arguments over whether the number of affordable homes municipalities must provide over the next decade should include low-income residents who could not afford housing over a 16-year period.

While it is never smart to second guess a court, based on the justices' questions to attorneys arguing the complex question of municipal housing quotas, it seems likely the court may require higher allocations than municipalities have argued they are required to deliver. The questioning seemed to indicate an inclination by the justices to include as part of these quotas obligations that accrued between 1999 and 2015, the so-called gap period when New Jersey had no valid affordable housing rules in force.

The details of the issue are complex, but the language used by several of the justices made it seem they did not accept the argument made by Jeffrey Surenian, lead attorney representing some 280 municipalities, that language in the state Fair Housing Act precludes towns from having to meet any needs that occurred during the 16-year gap period.

"Every single member of the court to some degree seemed to express displeasure over the other side's extremist argument" about the housing quotas, said Kevin D. Walsh, executive director of the Cherry Hill-based Fair Share Housing Center that brought the case before the court. On the question of whether municipalities have to provide for people who could not afford housing during the gap period, he added, "A couple of justices said it was obvious. We think it is obvious."

While Superior Court judges, or settlements between municipalities and housing advocates, are now responsible for dictating individual affordable-housing obligations, accounting for the gap period could add 100,000 units to the statewide requirement over the next decade. There is no official statewide total obligation for the period, but Fair Share Housing Center's expert had calculated it at about 200,000 units, when adjusted for caps and bonuses provided by the law.

The Supreme Court agreed to take the case on appeal of a July appellate court decision involving 13 Ocean County municipalities that had favored the towns, ruling that the FHA and the Mount Laurel doctrine — the result of decades of Supreme Court rulings on the issue — "do not authorize a retrospective new 'separate and discrete' affordable housing gap-period obligation." Towns only had to provide for housing for the three types of need specified in the act: unfulfilled prior-round obligations, present need, and prospective need.

The 1985 Fair Housing Act was the Legislature's response to the Supreme Court's first two affordable-housing decisions, also known as Mount Laurel rulings because the original case arose out of that Burlington County township's zoning, which the court found to be exclusionary and, thus, unconstitutional. The Mount Laurel Doctrine requires all municipalities to provide their fair share of homes affordable to those with low and moderate incomes, and the FHA codified how that would happen, with the process being overseen by the state Council on Affordable Housing.

COAH wrote rules and determined municipal housing obligations initially, then revised them —called the first two rounds. But the council never enacted third-round rules when the earlier ones expired, with courts throwing out early attempts, then COAH deadlocking two years ago. A fed-up Supreme Court took the issue out of the council's hands in March 2015 and tossed it back into the courts.

More than half the state's municipalities have filed housing plans in Superior Court seeking to comply with the Mount Laurel rulings and remain insulated from lawsuits from builders seeking to construct large developments that include affordable housing. To date, according to Fair Share, some 85 towns have reached settlements to build or at least zone for about 30,000 units. Other cases are, or may be, the subject of trials. That's how the cases of 13 municipalities in Ocean County, where the judge had appointed an expert to help determine housing obligations, wound up before the court.

There was much discussion about terms and definitions.

To answer the argument that the law does not provide for a gap period, Walsh argued that the time should not have been called "separate and discrete." But obligations that arose during that period should be recognized because the COAH process had "always been cumulative and gapless." He cited a 2002 brief cited by the state attorney general's office that said the overdue rules would cover the period beginning in 1999. COAH's 1994 rules covered the period dating back to 1993. And its 2014 rule proposal, which it deadlocked on adopting, stated that it would cover the need "for the period 1999 through 2024."

Justice Anne Patterson several times questioned whether those low- and moderate-income residents from the gap period who are still in need of housing today should be covered in an expanded definition of "present need," which now means the rehabilitation of substandard units.

Surenian argued they don't fall into the "present need box" because of that definition. And Edward Buzak, representing the New Jersey State League of Municipalities, said they would not be covered under "prospective need" because that category is for "households to be created in the future."

A substantial amount of the discussion revolved around what to do about those households that came into the low- and moderate-income categories in the 16-year gap period.

"Do those families have a place in the calculating out of low and moderate income need?" asked Justice Lee Solomon.

Surenian answered "no," because the Legislature did not include any kind of gap-period need when it drafted the FHA.

This prompted a number of other justices to chime in.

"For 16 years, people don't count?" asked Justice Faustino J. Fernandez-Vina.

"They (the Legislature) intended for COAH to do its job," said Justice Walter Timpone, the newest member of the court. " It hasn't. Municipalities did little to nothing for 17 years."

"You are saying that for 16 or 17 years, municipalities were able to immune from that constitutional obligation?" asked Justice Barry Albin. "Do you think (they) the Legislature expected everyone (COAH) to go on holiday for 16 years?"

"Yes, we enjoyed immunity," Surenian said. "But they (municipal officials) were in a difficult spot. They didn't know what COAH was going to do."

He added that the Supreme Court, in its March 2015 order that sent housing cases back to the Superior Courts, did not specifically address the question of the gap.

"Wasn't it obvious?" asked Justice Jaynee LaVecchia, who authored that ruling, going on to cite sections of it.

Surenian, however, argued that the court should not make itself a "superlegislature" and seek to rewrite the law.

"The act functions by having present and prospective need and will not function in retrospect," he said, warning that requiring municipalities to meet the gap obligations will make the FHA "crumble under its own weight."

Surenian said Fair Share's calculation of a total statewide affordable housing need of almost 350,000 units of all kinds — prior unfulfilled, present and prospective need and including 145,000 units for the gap period — is a "staggering number" that could never be met. His group's own expert estimates that fewer than 30,000 units could "be reasonably achieved" over the next decade.

Walsh said Fair Share's estimate, when caps and bonuses are taken into account, is closer to 200,000 units statewide, and he said the fact that so many municipalities have settled cases agreeing to a cumulative 30,000 units over the past several months means towns can find a way to provide for affordable units.

"The settlements mean nothing," Surenian said. "Fair Share is trying to take the position of 'look how reasonable we are.' The reason for the settlements is because Fair Share is costing them a lot of money in legal fees and won't stop before it brings them up before this (the Supreme) Court."

Following the arguments, Walsh held a press conference with a number of civil rights and housing advocates who urged the court to include the gap-period need in municipal obligations because so many New Jerseyans are struggling to find an affordable place to live.

"The people from 1999 just didn't disappear," said Arnold Cohen, senior policy coordinator with the Housing and Community Development Network of New Jersey. "They are living across the state and need houses they can afford."

The justices will now deliberate and issue a decision at a future date. Walsh said that because the court expedited this hearing and other recent aspects of the housing process, he is looking for a ruling soon.

"I'm optimistic they will move quickly," he said, "possibly by the end of the year."