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Hills Development Co. v. Township of Bernards

Decided: February 20, 1986.

THE HILLS DEVELOPMENT COMPANY, PLAINTIFF-RESPONDENT,
v.
THE TOWNSHIP OF BERNARDS IN THE COUNTY OF SOMERSET, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF BERNARDS, THE PLANNING BOARD OF THE TOWNSHIP OF BERNARDS, AND THE SEWERAGE AUTHORITY OF THE TOWNSHIP OF BERNARDS, DEFENDANTS-APPELLANTS. HELEN MOTZENBECKER, PLAINTIFF-RESPONDENT, V. MAYOR AND COUNCIL OF THE BOROUGH OF BERNARDSVILLE AND THE BOROUGH OF BERNARDSVILLE, DEFENDANTS-APPELLANTS. URBAN LEAGUE OF GREATER NEW BRUNSWICK, A NONPROFIT CORPORATION OF THE STATE OF NEW JERSEY, CLEVELAND BENSON, JUDITH CHAMPION, BARBARA TIPPETT AND KENNETH TUSKEY, ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-RESPONDENTS, AND FANNIE BOTTS, LYDIA CRUZ AND JEAN WHITE, PLAINTIFFS, V. THE MAYOR AND COUNCIL OF THE BOROUGH OF CARTERET, MAYOR AND COUNCIL OF THE BOROUGH OF DUNELLEN, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF EAST BRUNSWICK, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF EDISON, MAYOR AND COUNCIL OF THE BOROUGH OF HELMETTA, MAYOR AND COUNCIL OF THE BOROUGH OF HIGHLAND PARK, MAYOR AND COUNCIL OF THE BOROUGH OF JAMESBURG, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MADISON, MAYOR AND COUNCIL OF THE BOROUGH OF METUCHEN, MAYOR AND COUNCIL OF THE BOROUGH OF MIDDLESEX, MAYOR AND COUNCIL OF THE BOROUGH OF MILLTOWN, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MONROE, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF NORTH BRUNSWICK, TOWNSHIP, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF PISCATAWAY, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF PLAINSBORO, MAYOR AND COUNCIL OF THE BOROUGH OF SAYREVILLE, MAYOR AND COUNCIL OF THE CITY OF SOUTH AMBOY, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF SOUTH BRUNSWICK, MAYOR AND COUNCIL OF THE BOROUGH OF SOUTH PLAINFIELD, MAYOR AND COUNCIL OF THE BOROUGH OF SOUTH RIVER, MAYOR AND COUNCIL OF THE BOROUGH OF SPOTSWOOD, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF WOODBRIDGE, DEFENDANTS, AND TOWNSHIP COMMITTEE OF THE TOWNSHIP OF CRANBURY, DEFENDANT-APPELLANT. GARFIELD AND COMPANY, PLAINTIFF-RESPONDENT, V. MAYOR AND THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF CRANBURY, A MUNICIPAL CORPORATION, AND THE MEMBERS THEREOF; PLANNING BOARD OF THE TOWNSHIP OF CRANBURY, AND THE MEMBERS THEREOF, DEFENDANTS-APPELLANTS. CRANBURY LAND COMPANY, A NEW JERSEY LIMITED PARTNERSHIP, PLAINTIFF-RESPONDENT, V. CRANBURY TOWNSHIP, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY LOCATED IN MIDDLESEX COUNTY, NEW JERSEY, DEFENDANT-APPELLANT. LAWRENCE ZIRINSKY, PLAINTIFF-RESPONDENT, V. THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF CRANBURY, A MUNICIPAL CORPORATION, AND THE PLANNING BOARD OF THE TOWNSHIP OF CRANBURY, DEFENDANTS-APPELLANTS. TOLL BROTHERS, INC., A PENNSYLVANIA CORPORATION, PLAINTIFF-RESPONDENT, V. TOWNSHIP OF CRANBURY IN THE COUNTY OF MIDDLESEX, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF CRANBURY AND THE PLANNING BOARD OF THE TOWNSHIP OF CRANBURY, DEFENDANTS-APPELLANTS. MORRIS COUNTY FAIR HOUSING COUNCIL, MORRIS COUNTY BRANCH OF THE NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE AND STANLEY C. VAN NESS, PUBLIC ADVOCATE OF THE STATE OF NEW JERSEY, PLAINTIFFS-RESPONDENTS, V. BOONTON TOWNSHIP, CHATHAM TOWNSHIP, CHESTER TOWNSHIP, EAST HANOVER TOWNSHIP, FLORHAM PARK BOROUGH, HANOVER TOWNSHIP, HARDING TOWNSHIP JEFFERSON TOWNSHIP, KINNELON BOROUGH, LINCOLN PARK BOROUGH, MADISON BOROUGH, MENDHAM BOROUGH, MENDHAM TOWNSHIP, MONTVILLE TOWNSHIP, MORRIS TOWNSHIP, MORRIS PLAINS BOROUGH, MOUNT OLIVE TOWNSHIP, PARSIPPANY-TROY HILLS TOWNSHIP, PASSAIC TOWNSHIP PEQUANNOCK TOWNSHIP, RANDOLPH TOWNSHIP, RIVERDALE BOROUGH, ROCKAWAY TOWNSHIP, ROXBURY TOWNSHIP AND WASHINGTON TOWNSHIP, DEFENDANTS, AND DENVILLE TOWNSHIP, DEFENDANT-APPELLANT. AFFORDABLE LIVING CORPORATION, INC., A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT, V. MAYOR AND COUNCIL OF THE TOWNSHIP OF DENVILLE, DEFENDANT-APPELLANT, AND SHONGUM-UNION HILL CIVIC ASSOCIATION, A NOT-FOR-PROFIT CORPORATION, INTERVENOR-RESPONDENT. ANGELO CALI, PLAINTIFF-RESPONDENT, V. THE TOWNSHIP OF DENVILLE, IN THE COUNTY OF MORRIS: A MUNICIPAL CORPORATION OF NEW JERSEY, THE MUNICIPAL COUNCIL OF THE TOWNSHIP OF DENVILLE, AND THE PLANNING BOARD OF THE TOWNSHIP OF DENVILLE, DEFENDANTS-APPELLANTS. SIEGLER ASSOCIATES, A PARTNERSHIP EXISTING UNDER THE LAWS OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, V. MAYOR AND COUNCIL OF THE TOWNSHIP OF DENVILLE, DEFENDANT-APPELLANT. MAURICE SOUSSA AND ESTHER H. SOUSSA, PLAINTIFFS-RESPONDENTS, V. THE TOWNSHIP OF DENVILLE, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, SITUATED IN MORRIS COUNTY, AND THE DENVILLE TOWNSHIP PLANNING BOARD, DEFENDANTS-APPELLANTS. STONEHEDGE ASSOCIATES, PLAINTIFF-RESPONDENT, V. THE TOWNSHIP OF DENVILLE, IN THE COUNTY OF MORRIS, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, THE MUNICIPAL COUNCIL OF THE TOWNSHIP OF DENVILLE & THE PLANNING BOARD OF THE TOWNSHIP OF DENVILLE, DEFENDANTS-APPELLANTS. REAL ESTATE EQUITIES, INC., PLAINTIFF-RESPONDENT, V. MAYOR AND COUNCIL OF THE TOWNSHIP OF HOLMDEL, DEFENDANT-APPELLANT. NEW BRUNSWICK-HAMPTON, INC., PLAINTIFF-RESPONDENT, V. MAYOR AND COUNCIL OF THE TOWNSHIP OF HOLMDEL, DEFENDANT-APPELLANT. PALMER ASSOCIATES AND GIDEON ADLER, PLAINTIFFS-RESPONDENTS, V. MAYOR AND COUNCIL OF THE TOWNSHIP OF HOLMDEL, DEFENDANT-APPELLANT. URBAN LEAGUE OF GREATER NEW BRUNSWICK, A NONPROFIT CORPORATION OF THE STATE OF NEW JERSEY, CLEVELAND BENSON, JUDITH CHAMPION, BARBARA TIPPETT AND KENNETH TUSKEY, ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-RESPONDENTS, V. THE MAYOR AND COUNCIL OF THE BOROUGH OF CARTERET, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF CRANBURY, MAYOR AND COUNCIL OF THE BOROUGH OF DUNELLEN, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF EAST BRUNSWICK, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF EDISON, MAYOR AND COUNCIL OF THE BOROUGH OF HELMETTA, MAYOR AND COUNCIL OF THE BOROUGH OF HIGHLAND PARK, MAYOR AND COUNCIL OF THE BOROUGH OF JAMESBURG, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MADISON, MAYOR AND COUNCIL OF THE BOROUGH OF METUCHEN, MAYOR AND COUNCIL OF THE BOROUGH OF MIDDLESEX, MAYOR AND COUNCIL OF THE BOROUGH OF MILLTOWN, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF NORTH BRUNSWICK, TOWNSHIP, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF PISCATAWAY, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF PLAINSBORO, MAYOR AND COUNCIL OF THE BOROUGH OF SAYREVILLE, MAYOR AND COUNCIL OF THE CITY OF SOUTH AMBOY, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF SOUTH BRUNSWICK AND MAYOR AND COUNCIL OF THE BOROUGH OF SOUTH PLAINFIELD, MAYOR AND COUNCIL OF THE BOROUGH OF SOUTH RIVER, MAYOR AND COUNCIL OF THE BOROUGH OF SPOTSWOOD, TOWNSHIP COMMITTEE OF THE TOWNSHIP OF WOODBRIDGE, DEFENDANTS, AND TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MONROE, DEFENDANT-APPELLANT. MONROE DEVELOPMENT ASSOCIATES, PLAINTIFF-RESPONDENT, V. MONROE TOWNSHIP, DEFENDANT-APPELLANT. LORI ASSOCIATES, A NEW JERSEY PARTNERSHIP, AND HABD ASSOCIATES, A NEW JERSEY PARTNERSHIP, PLAINTIFFS-RESPONDENTS, V. MONROE TOWNSHIP, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, LOCATED IN MIDDLESEX COUNTY, NEW JERSEY, DEFENDANT-APPELLANT. GREAT MEADOWS COMPANY, A NEW JERSEY PARTNERSHIP; MONROE GREENS ASSOCIATES, AS TENANTS IN COMMON; AND GUARANTEED REALTY ASSOCIATES, INC., A NEW JERSEY CORPORATION, PLAINTIFFS-RESPONDENTS, V. MONROE TOWNSHIP, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, LOCATED IN THE STATE OF NEW JERSEY, LOCATED IN MIDDLESEX COUNTY, NEW JERSEY, DEFENDANT-APPELLANT. MORRIS COUNTY FAIR HOUSING COUNCIL, MORRIS COUNTY BRANCH OF THE NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE AND STANLEY C. VAN NESS, PUBLIC ADVOCATE OF THE STATE OF NEW JERSEY, PLAINTIFFS-RESPONDENTS, V. BOONTON TOWNSHIP, CHATHAM TOWNSHIP, CHESTER TOWNSHIP, DENVILLE TOWNSHIP, EAST HANOVER TOWNSHIP, FLORHAM PARK BOROUGH, HANOVER TOWNSHIP, HARDING TOWNSHIP, JEFFERSON TOWNSHIP, KINNELON BOROUGH, LINCOLN PARK BOROUGH, MADISON BOROUGH, MENDHAM BOROUGH, MENDHAM TOWNSHIP, MONTVILLE TOWNSHIP, MORRIS TOWNSHIP, MORRIS PLAINS BOROUGH, MOUNT OL



On certification to the Superior Court, Law and Chancery Divisions.

For reversal -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For affirmance -- None. The opinion of the Court was delivered by Wilentz, C.J.

Wilentz

[103 NJ Page 19] In this appeal we are called upon to determine the constitutionality and effect of the "Fair Housing Act" (L. 1985, c. 222), the Legislature's response to the Mount Laurel cases.*fn1 The Act creates an administrative agency (the Council on Affordable

Housing) with power to define housing regions within the state and the regional need for low and moderate income housing, along with the power to promulgate criteria and guidelines to enable municipalities within each region to determine their fair share of that regional need. The Council is further empowered, on application, to decide whether proposed ordinances and related measures of a particular municipality will, if enacted, satisfy its Mount Laurel obligation, i.e., will they create a realistic opportunity for the construction of that municipality's fair share of the regional need for low and moderate income housing. Southern Burlington County N.A.A.C.P. v. Mount Laurel, 92 N.J. 158, 208-09 (1983). The agency's determination that the municipality's Mount Laurel obligation has been satisfied will ordinarily amount to a final resolution of that issue; it can be set aside in court only by "clear and convincing evidence" to the contrary. § 17a. The Act includes appropriations and other financial means designed to help achieve the construction of low and moderate income housing.

In order to assure that the extent and satisfaction of a municipality's Mount Laurel obligation are decided and managed by the Council through this administrative procedure, rather than by the courts, the Act provides for the transfer of pending and future Mount Laurel litigation to the agency. Transfer is required in all cases except, as to cases commenced more than 60 days before the effective date of the Act (July 2, 1985), when it would result in "manifest injustice to any party to the litigation." § 16.

The statutory scheme set forth in the Act is intended to satisfy the constitutional obligation enunciated by this Court in the Mount Laurel cases. Mount Laurel II, supra, 92 N.J. at 208; Mount Laurel I, Burlington County N.A.A.C.P. v. Mount Laurel, 67 N.J. 151, 174-75 (1975). The Act includes an explicit declaration to that effect in section 3.

I.

Overview of Act; Summary of the Court's Decision

The Act that we review and sustain today represents a substantial effort by the other branches of government to vindicate the Mount Laurel constitutional obligation. This is not ordinary legislation. It deals with one of the most difficult constitutional, legal and social issues of our day -- that of providing suitable and affordable housing for citizens of low and moderate income. In Mount Laurel II, we did not minimize the difficulty of this effort -- we stressed only its paramount importance -- and we do not minimize its difficulty today. But we believe that if the Act before us works in accordance with its expressed intent, it will assure a realistic opportunity for lower income housing in all those parts of the state where sensible planning calls for such housing.

Most objections raised against the Act assume that it will not work, or construe its provisions so that it cannot work, and attribute both to the legislation and to the Council a mission, nowhere expressed in the Act, of sabotaging the Mount Laurel doctrine. On the contrary, we must assume that the Council will pursue the vindication of the Mount Laurel obligation with determination and skill. If it does, that vindication should be far preferable to vindication by the courts, and may be far more effective.

Instead of depending on chance -- the chance that a builder will sue -- the location and extent of lower income housing will depend on sound, comprehensive statewide planning, developed by the Council and aided by the State Development and Redevelopment Plan (SDRP) to be prepared by the newly formed State Planning Commission pursuant to L. 1985, c. 395. Conceptually, the Fair Housing Act is similar to CAFRA (Coastal Area Facility Review Act, N.J.S.A. 13:19-1 to -21), the Pinelands Act (Pinelands Protection Act, N.J.S.A. 13:18A-1 to -29), and the Meadowlands Act (Hackensack Meadowlands Reclamation & Development Act, N.J.S.A. 13:17-1 to -86), in its regional

approach to questions of appropriate land use. Its statewide scope is an extensive departure from the unplanned and uncoordinated municipal growth of the past.

The Council will determine the total need for lower income housing, the regional portion of that need, and the standards for allocating to each municipality its fair share. The Council is charged by law with that responsibility, imparting to it the legitimacy and presumed expertise that derives from selection by the Governor and confirmation by the Senate, in accordance with the will of the Legislature. Instead of varying and potentially inconsistent definitions of total need, regions, regional need, and fair share that can result from the case-by-case determinations of courts involved in isolated litigation, an overall plan for the entire state is envisioned, with definitions and standards that will have the kind of consistency that can result only when full responsibility and power are given to a single entity. Municipalities will have both the means and motives to determine, using the same standards, what is required of them, what their fair share is, and what combination of ordinances and other measures will achieve that fair share. The means consist of the rules, criteria, and guidelines of the Council, along with the Council's determination that the municipal fair share plan complies, or, if it does not, what steps must be taken. The motives are the municipalities' strong preference to exercise their zoning powers independently and voluntarily as compared to their open hostility to court-ordered rezoning; the motives also include the municipalities' desire to avoid such litigation, a goal best achieved by voluntary compliance through conformance with the standards adopted by the Council.

The Council's work is intended to produce ordinances and other measures that will fit together as part of a statewide plan, among other things, a plan that provides a real chance, a realistic "likelihood," Mount Laurel II, 92 N.J. at 222, for the construction or rehabilitation of lower income housing. And where necessary, financing may be available to help, for the

Act includes appropriations and other financial measures that will provide needed subsidies. §§ 20, 21, 33.

The Act recognizes that zoning and planning for lower income housing is a long-range task, that goals must be changed periodically, revisions made accordingly, and results regularly evaluated. This continuing nature of the planning process is given explicit recognition in the Act. See, e.g., sections 6a, 7.

When supplemented by the SDRP, the Act amounts to an overall plan for the state, rationally conceived, to be implemented through governmental devices that hold the promise that the outcome -- the provision of lower income housing -- will substantially conform to the plan. It is a plan administered by an administrative agency with a broad grant of general power, providing the flexibility necessary for such an undertaking; it is a plan that will necessarily reflect competing needs and interests resolved through value judgments whose public acceptability is based on their legislative source. Most important of all to the success of the plan is this public acceptance and, hence, the municipal acceptance that it should command.

That is the general outline of how this Act and the Council created by it are intended to operate, and the results they are intended to achieve. It is a description at variance with the prediction of some who oppose the Act. Our opinion and our rulings today, significantly reducing the courts' function in this field, are based on this outline, based, that is, on the Council's ability, through the Act, to approach the results described above. If, however, as predicted by its opponents, the Act, despite the intention behind it, achieves nothing but delay, the judiciary will be forced to resume its appropriate role.

This Act represents an unprecedented willingness by the Governor and the Legislature to face the Mount Laurel issue after unprecedented decisions by this Court.*fn2 Even with ordinary

legislation, the rule is firmly settled that a law is presumed constitutional. Mahwah Township. v. Bergen County Bd. of Taxation, 98 N.J. 268, 282 (1985); Paul Kimball Hosp. v. Brick Township., 86 N.J. 429, 446-47 (1981); Brunetti v. New Milford, 68 N.J. 576, 599 (1975); Harvey v. Essex County Bd. of Freeholders, 30 N.J. 381, 388 (1959). The particularly strong deference owed to the Legislature relative to this extraordinary legislation is suggested in the following language from Mount Laurel II:

[A] brief reminder of the judicial role in this sensitive area is appropriate, since powerful reasons suggest, and we agree, that the matter is better left to the Legislature. We act first and foremost because the Constitution of our State requires protection of the interests involved and because the Legislature has not protected them. We recognize the social and economic controversy (and its political consequences) that has resulted in relatively little legislative action in this field. We understand the enormous difficulty of achieving a political consensus that might lead to significant legislation enforcing the constitutional mandate better than we can, legislation that might completely remove this Court from those controversies. But enforcement of constitutional rights cannot await a supporting political consensus. So while we have always preferred legislative to judicial action in this field, we shall continue -- until the Legislature acts -- to do our best to uphold the constitutional obligation that underlies the Mount Laurel doctrine. That is our duty. We may not build houses, but we do enforce the Constitution.

We note that there has been some legislative initiative in this field. We look forward to more. The new Municipal Land Use Law explicitly recognizes the obligation of municipalities to zone with regional consequences in mind, N.J.S.A. 40:55D-28(d); it also recognizes the work of the Division of State and Regional Planning in the Department of Community Affairs (DCA), in creating the State Development Guide Plan (1980) (SDGP), which plays an important part in our decisions today. Our deference to these legislative and executive initiatives can be regarded as a clear signal of our readiness to defer further to more substantial actions.

The judicial role, however, which could decrease as a result of legislative and executive action, necessarily will expand to the extent that we remain virtually alone in this field. In the absence of adequate legislative and executive help, we must give meaning to the constitutional doctrine in the cases before us through our own devices, even if they are relatively less suitable. That is the basic explanation of our decisions today. [92 N.J. 158, at 212-14 (footnote omitted).]

The basic explanation of today 's decision is the Act -- this substantial occupation of the field by the Governor and the Legislature. They have responded. It appears to be a significant response. It is a response more than sufficient to trigger our "readiness to defer." Id.

We hold that the Act is constitutional and order that all of the cases pending before us be transferred to the Council. Those transfers, however, shall be subject to such conditions as the trial courts may find necessary to preserve the municipalities' ability to satisfy their Mount Laurel obligation. See infra at 61-63. In some of the cases before us, including several where a builder's remedy was imminent, transfer will cause a substantial delay in ordinance revisions and ultimate lower income housing construction. It is possible that during this time development might occur, making future construction of lower income housing impossible, or significantly less probable. For instance, where there are very few tracts suitable for lower income housing, industrial, commercial, or non-lower income housing development on them could end the municipality's future ability to meet its Mount Laurel obligation; similarly, where infrastructure capacity is limited, sewerage or other resources may be exhausted, precluding future Mount Laurel development. The objective of these conditions is to prevent such use of scarce resources.

The balance of our opinion continues with the facts and the procedural status of the argued cases (Part II), a fuller description of the Act (Part III), a determination of the Act's constitutionality (Part IV), an analysis of the motions now before us to transfer matters to the Council (Part V), interpretation of certain sections of the Act (Part VI), an outline of possible

conditions to be imposed on the transferral of these matters, to be determined by the trial courts on remand (Part VII), and a concluding section (Part VIII).

II.

The Facts and the Procedural Status

There are twelve appeals pending before us, each involving the question of the validity of a trial court's decision on a motion to transfer Mount Laurel litigation to the Council. Transfer was denied in all but one.

We selected five of the twelve cases for oral argument, designed and structured to cover all of the issues in all of the cases. The factual presentation that follows covers only the five cases that were argued. Our review of the record in the other cases makes it clear that in terms of our ruling today, there is no material difference in those cases.*fn3 The five cases specifically detailed involve Bernards, Cranbury, Denville, Randolph, and Tewksbury Townships. Tewksbury is the one case before us in which transfer was granted.

Cranbury is the oldest of the five. Its history is found in Urban League of Greater New Brunswick v. Borough of Carteret, 142 N.J. Super. 11 (Ch.Div.1976), rev'd, 170 N.J. Super. 461 (App.Div.1979). The action was commenced in 1974, before our decision in Mount Laurel I. Our ultimate determination in Mount Laurel II dealt with this matter. There we held that Cranbury's ordinance, along with those of the other Middlesex County municipalities before us, was invalid and remanded the case for trial in accordance with our numerous rulings in Mount Laurel II, 92 N.J. at 350-51. On remand, a trial was held in April and May of 1984, the fair share determined, and an order entered on August 13, 1984, allowing 90 days for rezoning. In April of 1985, the Master, appointed by

the court in accordance with Mount Laurel II, submitted a compliance report. The various reports of the parties' experts were exchanged in July of 1985. The court scheduled a hearing for December 2, 1985, on the issue of the compliance of the previously adopted ordinances. As a result of the subsequent events, mentioned below, that hearing was not held. It would have involved the measurement of the enacted ordinances against the fair share, a determination of suitability of certain sites for low and moderate income housing, the appropriate phasing in, if any, of the fair share obligation, and, assuming the enacted ordinances were not approved, a determination of the appropriate revision.

It appears that had this Court not interfered, this case might have been completed, assuming further ordinance revisions were required, by the beginning of this year. The claims of "manifest injustice" that would result from a transfer include the alleged delay in the construction of low and moderate income housing, the potential loss of suitable sites, and significantly increased infrastructure costs for developers. Both the public interest plaintiff who originally brought the suit and the builder-plaintiffs who joined it after Mount Laurel II claim "manifest injustice."

The Denville and Randolph cases were part of the Public Advocate's lawsuit against municipalities in Morris County. The action commenced in October of 1978, between the decisions in Mount Laurel I and Mount Laurel II. The proceedings before the trial court prior to Mount Laurel II were supplemented after that decision by more discovery and further court conferences. By July of 1984, when the matter was set down for trial, only three of the Morris County municipalities remained in active litigation of the case. Denville and Randolph were two of the three. After ten days of trial a tentative settlement was reached and further trial proceedings were stayed pending the implementation of that settlement.

On December 16, 1984, Denville indicated that it was no longer willing to abide by the settlement agreement. An additional day of trial was held in January 1985 (there were 10 days of trial in 1984), Denville's fair share was determined, and the municipality was ordered to rezone in conformance with Mount Laurel. A further interlocutory order was entered in March 1985, appointing a Master and requiring Denville to rezone in 90 days. The Master's report indicated that Denville's compliance plan would have resulted in only 12 additional lower income units (through the rehabilitation of 12 dilapidated units). During this period following our Mount Laurel II decision (from April 1984 to July 1985), five developers intervened, claiming builder's remedies. Three of the sites controlled by those developers were found suitable for lower income housing by the Master. The basis for claiming "manifest injustice" lies in the alleged delay in producing low and moderate income housing caused by the transfer, as well as in the builders' loss of expected profits.

Randolph had also reached a tentative agreement with the Public Advocate to settle the matter, but that settlement fell through too. There is an issue as to whether it fell through because of delays on the part of the Public Advocate, which in turn led to problems concerning the sites, or whether it was the problems concerning the sites that led to the delays. A developer interested in the matter claims that it withheld suit based on Randolph's assurance that it would receive satisfactory treatment after resolution of the suit brought by the Public Advocate. That developer (Randolph Mountain), whose prior status had been as an intervenor, ultimately filed its own complaint after the adoption of the Act. The only claim of "manifest injustice" lies in the alleged delay that would result in the production of low and moderate income housing.

Tewksbury is the most recent of the pending cases brought, having been filed on June 19, 1984. That suit resulted from the failure of Tewksbury's proposed rezoning to include the developer's tract in a zone that would permit multiple dwelling

housing at a density satisfactory to the developer. Extensive discovery has occurred. The trial date, formerly set for July 1985, was adjourned in order to continue the settlement negotiations. There has been no trial, nor any determination of constitutionality, fair share, need to rezone, compliance, and so forth. The claimed "manifest injustice" in this case arises from the expected delay in the resolution of this matter resulting from a transfer to the Council, and includes the duplication of efforts already spent in this litigation, the financial burden to the plaintiff resulting from his continuing mortgage obligation during the Council's process, the denial of the claimed due process right to have a court ruling on the constitutionality of Tewksbury's ordinance, and the delay in realizing the opportunity for affordable low and moderate income housing.

Bernards Township is the last matter on which we held oral argument. The suit before us is the second Mount Laurel suit brought by the developer, the first one having followed Mount Laurel I, the second, Mount Laurel II. The present suit was almost settled without any trial or discovery. Based on the apparent settlement, the municipality sought an "immunity" order, a device designed by one of the trial court judges to give a municipality the opportunity to rezone in accordance with the Mount Laurel obligation without having to face numerous suits by builders claiming a builder's remedy.*fn4 Through such

an order the court allows the municipality 90 days to rezone (the municipality conceding the invalidity of its then zoning ordinance) either with or without a builder's remedy, depending on whether a builder is a party or otherwise involved at that time. In the meantime (and this is the advantage of the order) no builders may commence suit. If the rezoning conforms to the Mount Laurel obligation, the court renders a judgment protecting the municipality for a six year period against the requirement of any further relief, including any further builder's remedies.

The deadline in Bernards' immunity order was extended from time to time to a date well after the effective date of the Act. Ultimately, Bernards decided not to go through with the settlement and thereafter filed a motion for transfer to the Council. The developer (Hills Development Company) by that time had expended substantial sums. The municipality had adopted an ordinance that appeared to comply with the Mount Laurel obligation. The developer alleges not only substantial expenditures that will be wasted if the builder's remedy that was part of the settlement is not granted, but further asserts that it has entered into numerous contractual arrangements that will cause it serious harm if the project is delayed or prohibited. The potential of a two-year delay allegedly would drastically affect the builder's business operations, which have depended on high-volume production. The "manifest injustice," therefore, in this matter consists not only of the delay in providing low and moderate income units (Hills claims it could produce

550 by 1990) but significant actual and potential damage to the builder.

As noted above the Act's effective date was July 2, 1985. Shortly thereafter, various motions were made in numerous cases, pursuant to the Act, to transfer the matters to the Council and hearings on those motions were held. In these five cases the motion for transfer was granted only for Tewksbury, and denied in the four others (as well as in all other cases before us). Following that denial many municipalities sought leave to appeal to the Appellate Division along with a stay of further proceedings at the trial level. In Tewksbury's case it was the developer who appealed from the order granting transfer. We have certified all of these appeals directly from the trial courts and, where requested, have entered a stay of all further proceedings at the trial level.

The issue before us in each of these cases is the trial court's order on the motion for transfer. Numerous builders have also challenged the constitutionality of the Act, their position being that even if transfer should have been granted, the matter should proceed in court since the Act is unconstitutional. Along with the attack on the Act in its entirety are claims that various sections are unconstitutional. As suggested above the central issue in the transfer motions is the meaning of "manifest injustice."

III.

Description of Act

The Act provides a statutory method designed to enable every municipality in the state to determine and to provide for its fair share of its region's need for low and moderate income housing. It creates a Council to achieve this result. During

the first seven months after its formation,*fn5 the Council is to divide the state into housing regions and determine, for each region (as well as for the state itself), the present and prospective need for low and moderate income housing, § 7a and b. It is also required during that period to adopt "criteria and guidelines" that will enable municipalities to determine their fair share of their region's housing need. § 7c. The Act contemplates that these criteria and guidelines, applied generally to all municipalities in the state, will result in a tentative fair share number for each municipality, calculated by the municipality, and thereafter adjusted by the municipality in accordance with various specific factors set forth in section 7c(2). One of those factors is the consistency of the fair share determination with the SDRP, the overall master plan of the State. § 7c(2)(e). That provision, when read together with this new State planning act, L. 1985, c. 395, contemplates the use of a statewide plan that will indicate where development and redevelopment is to take place or is to be encouraged, and where it is to be limited, including the appropriate kinds of development. The plan, insofar as the Mount Laurel doctrine is concerned, can be thought of as probably largely replacing the initial concept of "developing municipalities" and the subsequent use of the State Development Guide Plan in determining the locus of the Mount Laurel fair share obligation.*fn6

The power of the Council is extremely broad. While it is required, in performing these functions, to consider "pertinent research studies, government reports, decisions of other branches of government, implementation of the State Development

and Redevelopment Plan . . . and public comment," § 7, it is not restricted to any particular approach to these matters nor to any school of thought espoused by groups of experts. It is free to look at the matter and decide it based on its own determination of appropriate policy, given the purposes of the Act.

The Act contemplates that the Council will periodically adjust its regional need figures.*fn7 In other words, the Council is not required to make a static determination by August 1, 1986, but rather the first determination of the major facts and standards that will enable municipalities to determine their fair share at that time, the Council's determination to be revised "from time to time" in accordance with changing needs and changing circumstances. § 7. The Act contemplates that the information and criteria adopted by the Council at any given time will result in municipal fair share ordinances, revision of which should be considered after six years. That is the same period (six years) used in the Municipal Land Use Law requiring periodic revisions of municipal master plans, N.J.S.A. 40:55D-89, and the period used by this Court in Mount Laurel II, during which a zoning ordinance complying with the Mount Laurel obligation would be protected from attack. 92 N.J. at 291-92.

Any municipality (assuming it has filed a resolution of participation, a housing element, and a proposed fair share housing ordinance implementing the housing element, § 9a) may petition the Council for "substantive certification" of the housing element and ordinances. § 13. The housing element "shall contain an analysis demonstrating that it will provide . . . a realistic opportunity [for its fair share of low and moderate

income housing], and the municipality shall establish that its land use and other relevant ordinances have been revised to incorporate provisions for low and moderate income housing." § 11a.*fn8 The Council is required to issue "substantive certification" if no objection to certification is filed with it within 45 days of publication of notice of the municipality's petition and if it finds that the fair share plan "is consistent with the rules and criteria adopted by the Council" and makes "the achievement of the municipality's fair share of low and moderate income housing realistically possible." §§ 14 to 14b. The municipality is to adopt all of its proposed ordinances within 45 days after it receives "substantive certification." § 14.

If there are any objections to substantive certification, the Act mandates a "mediation and review" process. § 15a. If the objections cannot be resolved by this mediation process involving the Council, the municipality, and the objectors, the matter is referred to an Administrative Law Judge, heard as a contested matter, and expedited. § 15c. The final determination on the issue of substantive certification is then made by the Council after receipt of the Administrative Law Judge's initial decision. Id.

These administrative proceedings achieve two main goals. First, those municipalities that petition the Council and thereafter receive substantive certification will promptly (within 45 days, § 14) enact the proposed ordinances and other measures that led to substantive certification, measures that presumably will achieve a realistic opportunity for the construction of the

municipalities' fair share of low and moderate income housing. Second, in any lawsuit attacking a municipality's ordinances that have received substantive certification as not in compliance with the Mount Laurel constitutional obligation, the plaintiff will be required to prove such noncompliance by clear and convincing evidence, and the Council shall be made a party to any such lawsuit. § 17a. The difficulties facing any plaintiff attempting to meet such a burden of proof are best understood by noting the variety of methodologies that can be used legitimately to determine regional need and fair share as well as the many different ways in which a realistic opportunity to achieve that fair share may be provided. If the Council conscientiously performs its duties, including determining regional need and evaluating whether the proposed adjustments and ordinances provide the requisite fair share opportunity, a successful Mount Laurel lawsuit should be a rarity. There is therefore a broad range of municipal action that will withstand challenge, given this burden of proof.

Substantive certification becomes a most important goal for any municipality concerned with the potential result of Mount Laurel litigation brought against it. By using the procedures of the statute, the municipality will obtain the benefit of the Council's determination of both regional need and standards for determining its fair share of that need. By complying with the requirements for substantive certification the municipality will be relieved of the uncertainties and potential burdens of Mount Laurel litigation.

The fact that municipalities are not required by this legislation to petition for substantive certification is somewhat less significant than appears at first glance. Substantive certification is of considerable importance. If the municipality fails to adopt a resolution of participation within four months of the effective date of the Act, and then later fails to file its fair share plan and housing element with the Council prior to the institution of Mount Laurel litigation, it may lose the benefit of substantive certification. § 9b. It will be subject to litigation

and the remedies provided by Mount Laurel II, the replacement of which by the administrative procedures of the Council was one of the primary purposes of the Act. § 3. It can therefore fairly be assumed that most municipalities that have a potentially significant Mount Laurel obligation will file their petition for substantive certification, their housing element, and fair share housing ordinance within a reasonable period of time after the Council's adoption of its criteria and guidelines.*fn9

Thus, what appears at first to be simply an option available to municipalities is more realistically a procedure that practically all municipalities with a significant Mount Laurel obligation will follow, both to determine and to satisfy their Mount Laurel obligation. Furthermore, it is a procedure that may be concluded much more quickly than ordinary Mount Laurel litigation since the time periods provided for are extremely short. For instance, the Administrative Law Judge is required to render a decision within 90 days of "transmittal of the matter as a contested case to the Office of Administrative Law by the Council," § 15c; and the municipality is required to adopt its fair share housing ordinance within 45 days of the grant of substantive certification, § 14.

While there is the inevitable start-up delay (the Council's criteria and guidelines need not be adopted until August 1, 1986, and the Act allows municipalities five months after the adoption of the criteria to complete the necessary and sometimes time-consuming process of shaping their ordinances and housing elements, § 9a), it is quite possible that once the administrative gears start to move, a very substantial number of municipal fair share plans will be filed, certified, and thereafter adopted. That means, if the Act works according to its apparent intent, that within the not-too-distant future most municipalities subject to Mount Laurel obligations will have

conforming ordinances in place providing a realistic opportunity for the construction of their fair share of the region's need for low and moderate income housing. Considering the fact that the Council has the power to refuse substantive certification unless that opportunity is realistic, and the further fact that various financial aids to construction are provided for in the Act, it also means that lower income housing should actually be built.

This statutory scheme addresses the main needs delineated in our prior decisions on this matter, namely, the consistency on a statewide basis of the determination of regional need, fair share, and the adequacy of the municipal measures. Furthermore, the decisions and actions by the Council will follow the contours of the SDRP (when completed), explicitly designed for this purpose, among others. Revisions, adjustments, fine tuning -- all of the techniques available to an administrative agency -- can be implemented on a statewide basis as experience teaches the Council what works and what does not. The risk that discordant development might result if Mount Laurel cases continue to be decided by the courts is minimized by the considerations noted above, which lead to the conclusion that most municipalities will use the Council's procedures. ...


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