I. Background and Statement of Issue
Another segment of Bleak House Revisited is before the court. This granddaddy of all Mount Laurel litigation -- now a teenager, is here for a review of a proposed township compliance ordinance. It is time to write what I hope will be the final chapter in this saga. By this decision the court approves the proposed ordinance and grants the township a six year judgment of repose.
The issue before the court is whether the township has adopted a zoning ordinance which provides a realistic opportunity for the actual construction of its fair share of low and moderate income housing and has satisfied any builder's remedies which have been earned. Southern Burlington Cty. N.A.A.C.P. v. Mt. Laurel Tp., 92 N.J. 158, 220-222 (1983) (hereinafter Mount Laurel II) (All page citations shall refer to Mount Laurel II unless otherwise noted.) Before addressing that issue, a brief history of this case is appropriate.
The Allan-Deane Corporation (hereinafter Allan-Deane) filed the initial complaint on August 23, 1971 alleging that the Township of Bedminster zoning ordinance was exclusionary. Thereafter, on June 1, 1972 Lynn Cieswick and others filed a similar complaint alleging that they were also disadvantaged by the township's land use regulations. These two actions were subsequently consolidated for trial. A decision was rendered on February 24, 1975 invalidating the Bedminster ordinance. On January 21, 1977 the Appellate Division affirmed the trial
court's decision. The township's petition for certification was denied on May 3, 1977. The Allan-Deane Corp. v. Bedminster Tp., 74 N.J. 272 (1977) The township thereafter adopted a new zoning ordinance which was again challenged and again invalidated by the trial court on December 13, 1979. On January 29, 1980 the trial court directed the township to rezone and on March 6, 1980 appointed a master to assist in the process. The court also declared that Allan-Deane was entitled to corporate relief. The township did not appeal from the second finding of invalidity. Instead, it proceeded to rezone in accordance with the court's decision. On March 20, 1981 an order was entered by the trial court declaring that the revised ordinance complied with the constitutional requirements of Southern Burlington Cty. N.A.A.C.P. v. Mt. Laurel Tp., 67 N.J. 151 (1975) and Oakwood at Madison, Inc. v. Madison Tp., 72 N.J. 481 (1977) The Public Advocate alone appealed, asserting that the revised ordinance must include a mandatory lower income housing component and that Allan-Deane must provide 20% low and moderate income housing in its development as a condition of corporate relief.
On or about November 5, 1980, prior to the trial court's entry of final judgment, another complaint was filed against the township by Leonard Dobbs (hereinafter Dobbs) seeking an order permitting him to build a regional shopping center. In that complaint Dobbs did not offer to provide low and moderate income housing or even mention the subject. The Dobbs action was not consolidated with the suit brought by the Public Advocate.
The appeal filed by the Public Advocate was held in abeyance awaiting a decision by the Supreme Court in the Mount Laurel II proceedings which were then pending. After Mount Laurel II was decided, the Appellate Division on August 2, 1983 remanded the case to this court for further proceedings consistent with the Mount Laurel II decision.
Thereafter the court, the master, all parties and Dobbs engaged in extensive informal case management conferences and other negotiations in an effort to bring about a compliant ordinance (which is commonly referred to in Mount Laurel litigation as a "compliance package"). The effort at resolution continued through the balance of 1983 and into the spring of 1984. In many instances it appeared that the parties were close to agreement only to have additional difficulties develop. Ultimately, the court saw the need to bring about a final disposition of the case either by settlement or by trial. Therefore, on May 25, 1984 while hearing motions brought by Dobbs and Timber Properties, Inc. (hereinafter Timber) to formally intervene, the court denied those motions without prejudice but directed that if the parties did not settle within a period of 30 days, it would reconsider the motions. The parties did go forward with settlement discussions and the court granted an extension of the 30 day limitation. Eventually, the parties resolved their differences though not to the satisfaction of Dobbs and Timber.
The court then held a compliance hearing to determine whether the ordinance met Mount Laurel II standards. A 17 day trial ensued during which the Public Advocate, The Hills Development Company (the successor to The Allan-Deane Corporation, hereinafter Hills) and the township sought to demonstrate the validity of the land use regulations. Dobbs actively sought to demonstrate their invalidity. Timber appeared at the trial but did not present any witnesses.
The threshold step in determining ordinance compliance requires calculation of the municipality's fair share. All of the parties to this litigation as well as Dobbs and Timber agreed that the fair share, calculated in accordance with the methodology heretofore adopted by this court in AMG Realty Co. et al. v. Warren Tp., N.J. Super. (Law Div.1984) (hereinafter AMG) is 819 low and moderate units. Neither Dobbs nor Timber introduced any evidence seeking to modify that number.
The township agreed to accept the number and contended that it had zoned for compliance with it. However, it sought to have the court reduce the number based upon its voluntary compliance with Mount Laurel II or alternatively to phase the 819 units by requiring that only 656 units be built by the end of this decade and that the balance be built thereafter.
With respect to the claim for reduction due to voluntary settlement, the township points out that this court has permitted a modification in the fair share numbers of many municipalities which were initially calculated utilizing the AMG methodology. It has, in fact, been the policy of this court to permit adjustments of the fair share number produced by the AMG methodology in those cases in which a municipality has voluntarily stipulated noncompliance and fair share at an early stage of the litigation and has agreed to become compliant within a specified period. Similar adjustments have been permitted in other cases where equity dictated that approach. Furthermore, this modification of the fair share has been granted to municipalities which sought declaratory type relief concerning the compliance of their ordinance even before litigation was instituted against them. Cf. J.W. Field Company, Inc. v. Franklin Tp., 204 N.J. Super. 445 (Law Div.1985)
There are several justifications underlying the policy of fair share flexibility in cases of voluntary compliance. In the first place, this court has recognized on several occasions that the AMG methodology is not scientifically precise and represents the initial stage of an evolution of a fair share methodology. While the fair share numbers produced by the methodology are generally sound it would be difficult to argue that there is no margin of error in either direction. Second, if the court cannot be flexible in assigning a fair share number there is little incentive for a municipality to resolve its litigation. If the number produced by the methodology is perceived as "the worst we can do", the municipality has little to lose and perhaps something to gain by continuing to fight. Third, to the extent
that voluntary compliance results from the court's willingness to make adjustments to the fair share number, it is likely that a greater amount of the existing need for lower income housing will be met sooner. That is, to the extent that by protracted litigation we delay the day when we build what can be built within the projection period, even less of the need will be met. The policy adopted by the court has been attractive to many municipalities. At this writing, approximately a dozen towns have chosen to settle their litigation within a few months of being sued and three others have sought declaratory relief without suit being brought against them.
The township seeks to take advantage of this policy to reduce its fair share. The question is whether it would be appropriate to apply the policy to Bedminster given the history of this litigation. In the first place, the circumstances which allow for fair share flexibility and the goals that such a policy may achieve do not exist in this case. The settlement did not materialize for a period of over a year following the remand by the Appellate Division and almost eighteen months after the Mount Laurel II decision. More importantly, the settlement did not come about until this court on May 25, 1984 directed that either a settlement take place within 30 days or that the two additional plaintiffs might be intervened and trial would be held concerning their right to a builder's remedy. Thus, while it cannot be denied that the parties ultimately managed to resolve this case, the settlement was "voluntary" only in the sense that it did not result from a court imposed judgment. For these reasons, I conclude that there should be no reduction in the fair share number of 819.
With respect to the phasing of the fair share so that only a portion of it must be built in this decade, the court reaches a different result. All parties agreed that it is within the power of the trial court to cushion the impact of Mount Laurel development on municipalities where that impact would cause sudden and radical transformation. (at 280, 219)
The Public Advocate, in support of Bedminster's contention that a radical transformation will occur, emphasizes the following facts:
1. That Bedminster had 938 housing units in 1980 and a population of 2,469 people. (Those figures have not substantially changed to the date of this trial.)
2. That if Bedminster's fair share is reduced by 20% to 656 units, the township would experience a growth of nearly 3,300 units if the lower income units are constructed on the basis of four market units to one lower income unit. Assuming an average of 2.25 persons per household approximately 7,400 additional people would move to the township by 1990.
3. This growth would constitute an approximate 350% increase for Bedminster in housing and a population increase of approximately 300% since 1980.
4. If Bedminster's fair share of 819 units were not reduced by 20%, construction based upon four market units to one lower income unit would result in approximately 4,000 housing units and approximately 9,000 new residents. That would result in an approximate increase of over 430% in housing units and over 370% in population since 1980.
5. For the period of 1960 to 1970 only two out of 126 New Jersey municipalities with a population between 1,000 and 3,000 had a population growth in excess of 200%.
6. From 1970 to 1980 only three out of 97 municipalities with a population of 1,000 to 3,000 increased by more than 200%.
Both the master and the township's expert present similar arguments in support of a finding of radical transformation. Dobbs counters with the following contentions:
1. The Supreme Court has cautioned that the use of the radical transformation doctrine to obtain a phasing of the fair share obligation be used sparingly. (at 219)
2. Radical transformation cannot be measured simplistically by the application of percentages which are based on a municipality's existing population base or past exclusionary practices.
3. A radical transformation argument is inapposite where a municipality has not reasonably attempted to accommodate growth in the past.
4. A radical transformation argument is inapposite where a municipality and the region within which it is located have heretofore accepted and reaped the benefits of commercial ratables and related growth which in and of themselves evidence a radical transformation.
5. A radical transformation argument is inapposite where a municipality has failed to avail itself of zoning alternatives which would mitigate the impact of growth. That is, Bedminster has chosen to satisfy its obligation principally through zoning for construction of homes on a ratio of four market units to one lower income unit and has not sought out alternative modes of compliance.
6. The manner in which the township has concentrated its Mount Laurel compliance sites, within a confined area, magnifies the impact of growth upon the municipality.
With respect to arguments which emphasize percentages of growth, the court agrees with Dobbs that numbers alone cannot justify a finding of radical transformation. It must be acknowledged that many of the communities involved in Mount Laurel litigation are sparsely developed. Fair share compliance programs which use a mandatory set-aside approach of four market units to one lower income unit will necessarily produce high growth percentages. Thus, there is an inevitable tension created between existing growth patterns and the growth to be anticipated from a builder's remedy, which up to now has been the principal means of Mount Laurel compliance. Furthermore, growth rate comparisons without accompanying specific information concerning the actual impact on the communities involved have limited value. Nonetheless, while these
deficiencies are apparent, the statistics do provide some broad guidance in assessing the projected growth rates. The Supreme Court demonstrated its concern for the quantity of construction which could occur within a short time. (at 219) Thus the numbers can play some role in the court's determination. For example, the fact that of all towns in New Jersey with a population of 1,000 to 3,000 only two towns grew by more than 200% in the 1960's and only 3 towns grew by more than 200% in the 1970's, must have some relevance.
The arguments made by Dobbs deserve brief individual attention. Certainly the Court has emphasized that the power to phase because of radical transformation should be exercised sparingly and with special care so as not to significantly dilute the Mount Laurel obligation. (at 219) However, the question remains whether phasing is appropriate in this case. The contention that the municipality should not be able to assert a radical transformation defense where it has not reasonably attempted to accommodate growth in the past renders an argument for phasing practically impossible in most municipalities given the fact that most ordinances have been exclusionary. The same is true with respect to the argument made by Dobbs that a municipality may not accept the benefits of commercial ratables and related growth and at the same time assert a defense of radical transformation. Apparently Dobbs would have those municipalities punished for their past sins rather than have them rectified in an orderly fashion in the future. The argument that the growth of ratables or the development of highways in and of itself constitutes a radical transformation is misplaced. It may or may not have created a radical transformation in a general sense but it is certainly not the radical transformation to which the Court was referring when it made provision for phasing because of the pace of Mount Laurel construction.
There is some appeal to the argument that the radical transformation is magnified by Bedminster's means of compliance because it has chosen to satisfy most of its fair share by the
construction of four market units for each lower income unit. However, the argument does not carry great weight. First, the township is faced with the presence of a plaintiff who has a right to a builder's remedy for approximately one-third of the total fair share of the town. Second, the township has made a planning decision to locate its Mount Laurel compliance parcels in proximity to the builder's remedy parcel. Its options with respect to the adjacent parcels are somewhat limited. Third, the township might be hard pressed to demonstrate, under the circumstances of this case, that it can provide alternative modes of compliance which would meet the court's requirement that it do so within a reasonable time span. Fourth, it must be acknowledged that what constitutes compliance is still an open issue. Bedminster had to make a judgment call with respect to what would be acceptable to this court. Certainly it could not be suggested that it has purposely punished itself by increasing the quantity of units to be constructed just so that it might claim a radical transformation. I hasten to add that while this argument does not carry the day at this point in the history of Mount Laurel litigation, it may have considerable weight in the future as acceptable and realistic alternative modes of compliance are developed.
Mount Laurel II does not provide a definition of radical transformation. The common sense connotation is a rapid and extreme change in existing conditions. The court must measure the capacity of the municipality to absorb that change within a specified planning period. Implicated in that evaluation will be the extent of required capital improvements such as water, sewer and roads. Institutional and service demands such as schools, police and fire protection and municipal government facilities must also be examined. Of course, this capacity measurement must also account for any unique environmental or planning conditions which might render a town particularly sensitive to sudden growth.
The court has heard testimony with respect to the rural character of Bedminster. Evidence reveals that its infrastructure
is extremely limited and that its road system is compatible with its rural character. Its school system is structured to its size. The township's expert testified that the existing school will have to be expanded to accommodate the Hills development alone and that another school will be required when the other sites have been constructed. There are few full time municipal employees and the municipality's physical facilities are very limited. In short, Bedminster is essentially a rural community which has not changed significantly in character for many years. I find no difficulty in concluding that the fulfillment of the full fair share of 819 in this decade would bring about a radical transformation in the township. A strong argument could be made that the fulfillment of an obligation of 656 lower income units in the manner provided for in the Bedminster compliance package might also constitute a radical transformation. However, that issue need not be reached since the township has stipulated that it can accept that number.
Based on these facts the court finds that the fair share of the township is 819 units for the decade of 1980 to 1990. That fair share will be met by the provision of 656 of those units on or before December 31, 1990, which is actually one year into the next decade but is also roughly coincident with the six year period of repose. The balance of 163 units shall be provided on or before December 31, 1994. In both cases the number shall be evenly divided between low and moderate income households. It should be stressed, however, that the 163 units are a deferred portion of the 1980-1990 obligation and shall be in addition to any fair share obligation which Bedminster is found to have for the decade of 1990-2000.
III. Compliance of Bedminster Ordinance
A. The Test of Compliance
Having determined that the fair share of the township is 819 lower income units, I now turn to the issue of whether it has
amended its zoning ordinance to provide the realistic opportunity for the construction of its fair share. Before analyzing the Bedminster compliance regulations the court must first clarify the framework within which the municipal ordinances are to be judged. In short, what is the test of compliance?
Our Court has clearly expressed the obligation. A municipality must provide a realistic opportunity for the construction of its fair share. "Realistic" is defined by the Court in terms of "likelihood". (at 221-222) What proofs will support the conclusion that the municipal action has achieved the required likelihood? To answer this ultimate question the court will perform the following inquiry:
1. Verify that the ordinances are free from all excessive restrictions and exactions or other cost generating devices that are not necessary to protect health and safety.
Our Court has established this as a minimum step towards compliance. (at 258-259)
2. Examine the sites selected or other mechanisms used by the town to achieve compliance.
In this examination, the court will assess whether those sites or mechanisms provide a realistic opportunity (i.e. likelihood) for the actual construction of lower income units within the compliance period. This assessment may include evaluation of site suitability, use of affirmative measures to encourage lower cost housing, alternative compliance mechanisms, project feasibility, and any intangible factors which may have a very real influence upon the development of lower income housing. Furthermore, the court must ensure that any sites which have earned entitlement to a builder's remedy have been designated for rezoning.
3. If the sites selected or other mechanisms employed are realistic, then the compliance package should be approved.
As long as the court is satisfied that the compliance package is realistic, it will enter a judgment of compliance. The court should not look to any sites not selected or mechanisms not employed even if they might arguably be as realistic
or more realistic unless an excluded site has earned a builder's remedy. Absent a builder's remedy, a municipality should have the right under Mount Laurel to choose any reasonable combination of realistic sites or realistic mechanisms that will produce the required result -- the likelihood. It should not be forced to decide which course is most realistic and then be forced to select that course. In many cases, neither the court nor the parties will be able to determine with any certainty which sites or mechanisms may be more or less likely. Even in those cases where it would be possible, a gradation of likeliness should not be an element of the evaluation. Rather, the court should focus upon the compliance package that the township presents by examining each of its parts and its overall effect to determine whether the package is realistic.
This standard of compliance should make it possible to achieve all the purposes underlying the Mount Laurel doctrine while at the same time preserve the legitimate planning control which the Court sought to protect for our municipalities. (at 214) Rejecting a weighing of likeliness between included and excluded sites should simplify the compliance procedure and hearings. Finally, to those who may be excluded in the process, the test is not unfair. There is no inherent right to Mount Laurel zoning absent a builder's remedy. The Mount Laurel principles exist for the benefit of the lower income households of our State, not for those seeking rezoning. A plaintiff receives Mount Laurel zoning by earning it -- that is, bringing about Mount Laurel compliance by demonstrating that the ordinance is exclusionary and offering to build a substantial amount of lower income housing. (at 279-280) A builder or property owner not so entitled should not be heard to upset an otherwise acceptable municipal plan simply because it does not include a site upon which lower income housing is also likely. That demands more of our towns than the Mount Laurel principles dictate. It also represents an unwarranted intrusion into the well established prerogatives of our municipalities.
Certain aspects of this test of compliance require brief comment before the court examines the Bedminster efforts at meeting the test. As noted above, the second step in the evaluation process involves an examination of the sites selected or other mechanisms used by the township to achieve compliance. The assessment may include, among other things, site suitability, affirmative measures, alternative compliance mechanisms, project feasibility and other less tangible factors.
A review of site suitability relates to the physical appropriateness of the parcel. Such factors as environmental suitability, availability of infrastructure, proximity to goods and services, regional accessibility and compatibility with neighboring land uses may impact upon whether the court finds a parcel suitable for Mount Laurel development.
A review of affirmative measures relates to the matters discussed in Mount Laurel II at 260-274, including subsidies, inclusionary zoning devices, incentive zoning, mandatory set-asides and the resale controls necessary to ensure that the lower income unit will remain affordable over the long term.
A review of alternative compliance mechanisms relates to any approaches that a municipality may propose as means of avoiding the construction of four market units for each lower income unit which results from use of a 20% mandatory set-aside. Examples might include commercial incentive zoning which produces lower income housing or projects fully funded by the municipality. The court will be called upon to gauge whether the alternative mechanisms will be likely to lead to Mount Laurel housing.
A review of project feasibility relates to whether the rezoning and other affirmative measures will provide a builder with a sufficient profit to make the project a likelihood. (at 279, n. 37) If the project is not economically feasible, a builder will not undertake construction and Mount Laurel housing will not materialize. In reviewing project ...