Municipalities celebrate ruling on affordable housing 'gap period'

Published July 11, 2016
By Katherine Landergan

Municipalities claimed victory on Monday after an appeals court ruled that they are not constitutionally mandated to address an affordable housing "gap period” that lasted for 15 years in the state.

Affordable housing advocates suggested that the decision was more nuanced one.

Tens of thousands of units are arguably at stake in the decision, which comes after the state Supreme Court ruled last year that affordable housing decision-making powers would shift from the Council on Affordable Housing (COAH) to Superior Court judges. The ruling on Monday is the newest twist in a decades-long legal dispute over the implementation of the Mount Laurel doctrine, which is meant to ensure that low- and moderate-income households have a reasonable opportunity to live in every New Jersey municipality.

At issue is whether municipalities must account for a period from 1999 to 2015 when there was a lack of affordable housing being built in New Jersey. In February, Superior Court Judge Mark A. Troncone rejected a key argument made by a coalition of towns and cities when he ruled that municipalities must account for this period. The coalition later appealed the ruling. The appeals court panel on Monday unanimously reversed that decision and sent it back to the trial court for reconsideration.

The case could be appealed to the state Supreme Court, or hashed out in trial courts across the state. The interpretation of this ruling will likely have a far-reaching impact as towns across the state are submitting affordable housing plans to Superior Court judges.

In its ruling, the court panel said that Troncone “erroneously imposed the requirement that a municipality undertake a new, ‘separate and discrete’ gap-period calculation.”

The two sides in this case interpreted the ruling differently. Mike Cerra, assistant executive director for the New Jersey League of Municipalities, said the decision is “as clear cut as I’ve ever seen” and clarifies that the municipalities are not mandated to account for this period.

“Ultimately this is a pro-housing decision because it lays the path forward,” he said. “Estimates of unreachable obligations do not get housing built.”

Cerra also said he thinks municipalities will be anxious to move swiftly after this decision, and that the gap issue “has been hanging over their heads for years now.”

Fair Share Housing Center, a nonprofit organization that advocates for affordable housing, issued a statement saying the ruling was a complicated one and could delay the construction of affordable units.

In his statement, Kevin Walsh, executive director for the center, pointed to parts of the decision that suggest the obligation from this 15-year period is not entirely erased.

For example, the division held that the court “does not ignore housing needs that arose in the gap period or a municipality's obligation to otherwise satisfy its constitutional fair share obligations.”

But Cerra said that this particular part of the ruling is in line with the municipalities' argument. In court, the coalition argued that the low- to moderate-income earners who were not served by COAH during that time moved to either substandard or overcrowded housing, and those homes will be rehabilitated as part of the present need.

Walsh also said in his statement that by reversing the decision, “the court today deviated from the course New Jersey has set for decades on how this need should be measured.”

Walsh said the ruling will result in further delays for thousands of families who deserve to live in safe communities with access to good jobs and schools.

"This plays into the hands of wealthy towns that are seeking to delay and exclude because it requires further studies,” he said.

In 1975 and 1983, the New Jersey Supreme Court ruled in two landmark decisions that all municipalities must zone for a “fair share” of affordable housing for low- to moderate-income households. These rulings — collectively known as the Mount Laurel doctrine — prohibit municipalities from using zoning powers to discriminate against the poor.

The state Legislature then enacted the Fair Housing Act of 1985, which created the Council on Affordable Housing. COAH would estimate affordable housing needs and review plans by each municipality to fulfill their obligations. If a municipality failed to comply, then it would risk going to court. The council completed two rounds of compliance, referred to as “rules,” in 1986 and 1994, respectively. But the third round never happened. COAH would promulgate regulations and municipalities and other parties would disagree with the requirements.

Then in March 2015, the state Supreme Court ruled that because of COAH’s inability to act, it would shift the decision-making power to Superior Court judges.

A report commissioned by the Fair Share Housing Center found a statewide affordable housing need of more than 200,000 homes by 2025, about 60 percent of which are from the gap period. But the towns' report, released by Philadelphia-based Econsult Solutions, said at the time of Troncone’s ruling that New Jersey needed to provide fewer than 37,000 homes. Enconsult subsequently revised its assessment upward to 72,000 homes to account for the gap period.

Staci Berger, president and CEO for the Housing and Community Development Network of New Jersey, said in a statement that this decision will create many new hurdles.

“Our families, friends and neighbors who might not be counted because of this ruling are the heart of our state and the backbone of our economy,” Berger said in the statement. “If we can’t afford to live here, we can’t get our economy back on track. We need to build more homes more people can afford, so we can all call New Jersey home.”

Read the decision here: