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Hills Development Co. v. Township of Bernards

Decided: December 19, 1988.


On appeal from a final decision of the New Jersey Council on Affordable Housing.

Petrella, Shebell and Landau. The opinion of the court was delivered by Shebell, J.A.D.


[229 NJSuper Page 321] Appellants Cyrus Vance, Grace Vance, Percy Pyne, III, Evelyn Pyne, Francis Pratt, II, and Sally Pratt appeal from a resolution of the Council on Affordable Housing (Council) granting substantive certification of the housing elements and ordinances of the Township of Bernards. In Hills Dev. Co. v.

Bernards Tp. in Somerset Cty., 103 N.J. 1 (1986), our Supreme Court found the Fair Housing Act (N.J.S.A. 52:27D-301 et seq.) to be constitutional, and ordered that those cases then pending before the court be transferred to the Council. Id. 103 N.J. at 25.

Under the Fair Housing Act, any municipality may petition the Council for "substantive certification" of the housing element and ordinances. N.J.S.A. 52:27D-313, see Hills Dev. Co., 103 N.J. at 33. The municipality must file a resolution of participation, and then a housing element, and "any fair share housing ordinance introduced and given first reading and second reading in a hearing pursuant to R.S. 40:49-2 which implements the housing element," N.J.S.A. 52:27D-309(a). The Township of Bernards notified the Council by letter dated September 3, 1986 that it sought to secure substantive certification through participation in the administrative process.

On December 2, 1986, the Planning Board of the Township of Bernards held an open meeting on the proposed housing element of the Bernards Township Master Plan. Appellants had the opportunity to speak at the December 2, 1986 meeting. The meeting had originally been scheduled for December 3, 1986 by notice published on November 25. Notice of the December 2 meeting was published on November 27, 1986 by an administrative assistant unfamiliar with the 10-day notice requirement of N.J.S.A. 40:55D-13(1).

Notice of the township's petition for substantive certification was published on January 1, 1987, pursuant to N.J.S.A. 52:27D-313 and N.J.A.C. 5:91-4.3. The Township of Bernards Housing Plan Element/Fair Share Plan, dated January 5, 1987, was submitted on that date to the Council. Attached as appendices to the element were Bernards Township Ordinance No. 704, apparently adopted in 1984 to address the mandates of So. Burlington Cty. NAACP v. Mt. Laurel Tp., 92 N.J. 158 (1983) (Mount Laurel II), and Ordinance No. 764A, adopted on April 6, 1986, to address the mandates of the Fair Housing Act.

A hearing on the contents of a proposed settlement agreement between Bernards Township and Hills Development Co. (Hills) resolving the disputes between the parties in Hills Dev. Co. v. Bernards Tp. in Somerset Cty. was held on January 26, 1987. The hearing was originally duly noticed for January 22, but was cancelled due to a snowstorm and rescheduled for January 26. Notice was sent out on January 22, and appellants spoke on the proposed settlement agreement at the January 26 meeting. The township committee voted to approve the proposed settlement agreement. A copy of the settlement agreement was sent to the Council and all "interested parties" by the township on February 5, 1987.

Appellants notified the Council of their objections to the township's petition for substantive certification in a letter dated February 19, 1987. One of the objections raised by appellants was the lack of statutorily-mandated notice of the December 2, 1986 planning board meeting at which the housing element was adopted. Appellants also contended that the settlement agreement was part of the housing element, and thus the housing element was incomplete when adopted because it did not include the settlement agreement. Appellants submitted a Planner's Report in support of their contentions. The Council notified the township by letter dated February 19, 1987, that an objection had been filed and that the dispute would be submitted to mediation. The first mediation meeting was scheduled for March 13, 1987. The Council mediator requested a representative of Hills to attend as an "information source" to the mediator.

On March 5, 1987, Hills filed with the Council a notice of motion pursuant to N.J.A.C. 5:91-7.2(d), requesting an order "requiring the mediation process to terminate and review for substantive certification purposes to commence." The notice of motion requested oral argument and was accompanied by a letter brief. Upon learning that oral argument could not be scheduled until mid-to-late April 1987, Hills submitted a letter to the Council to advise on its position on the pending motion.

On March 12, 1987, appellants filed a verified complaint in lieu of prerogative writ in the Superior Court of New Jersey, Law Division, Somerset County, against the Bernards Township Committee and Planning Board, and Hills. The complaint requested that the Bernards Township Housing Plan Element and Settlement with Hills be declared invalid and void, and that temporary, interlocutory and permanent injunctive relief be granted against defendants from conducting hearings on applications for development on the Hills' property. That same day, the trial court issued an order to show cause, with a return date of March 27, 1987. The trial court on July 27, 1987 ordered upon motion by Hills, that the "entire complaint" be transferred to the Council on Affordable Housing.

The Council on Affordable Housing determined in its May 4, 1987 opinion on Hills' motion that the objectors had raised objections which were proper subjects for mediation. The Council found that while Hills was neither an objector nor an intervenor, the motion was properly before the Council because Bernards Township, which joined in the motion, had standing. The Council denied the Hills/Bernards' motion to disregard mediation in reviewing the Township of Bernards' petition for substantive certification.

Mediation was concluded on April 20, 1987, and the mediator issued his report on that date. The mediator noted,

the objectors raise procedural and substantive objections. Procedurally, the objectors indicate that the Township housing element was improperly adopted and, therefore, the Council should not accept it. In the event the Council chooses to accept the housing element, they argue that the 45 day objector period should be extended. These procedural objections were not a subject of mediation.

The mediator's recommendation stated,

The key issue of this case is if this site conforms to the Council's definition of available, suitable, developable and approvable. (I will not repeat these definitions here). The objectors have provided no mapping or evidence to indicate that the Hills site does not conform to the Council's rules. The staff is continuing its review of all the designated inclusionary sites proposed by Bernards Township and will report to the Council at a later date.

As mediation progressed most of the issues under discussion involved municipal subdivision and site plan decisions that in my opinion are not crucial to the Township's petition for certification. In addition, the decision to include or exclude the objectors from a sewer franchise area seems clearly a municipal decision that would be more appropriately challenged before another forum.

There have been procedural objections to Bernards Township's petition for certification. I will defer to the Council's representatives from the Attorney General's office to advise you regarding these objections.

In summary, I do not see the failure to resolve any of the issues raised during mediation as an impediment to the Township's petition. I, therefore, recommend that Bernards proceed towards substantive certification subject to conditions the Council may wish to impose after reviewing the staff report.

On May 28, 1987, the Bernards Township Planning Board held a second open meeting on the amendment to the housing plan element. Notice for this meeting was given on May 13, 1987.

On August 3, 1987, the Council denied the appellants' request to deny substantive certification and to require Bernards to begin the substantive certification process as of the date of Bernards' readoption of its housing element by the Planning Board. In its opinion the Council noted that the trial court, in transferring the appellants' complaint to the Council, had ruled that the Council had jurisdiction to rule on the alleged procedural deficiencies. The Council found that the settlement agreement was not a part of the housing element, and thus the post-January 5, 1987 execution of the settlement did not invalidate the housing element. The Council also found that under the Open Public Meetings Act, N.J.S.A. 10:4-6 et. seq., the township was entitled to hold negotiations and discussions regarding the settlement in private, as the settlement involved pending litigation.

The Council also found that the township "cured" its defective notice of the December 2, 1986 public hearing through the properly noticed May 28, 1987 meeting. The Council asserted that rejecting the township's housing element and requiring readoption would cause undue delay, and that denying substantive certification would result in jurisdiction reverting to the court, pursuant to N.J.S.A. 52:27D-316, 318.

On September 8, 1987, the Council issued a resolution granting substantive certification of the Bernards Township housing element and Fair Share Plan dated January 5, 1987. On October 13, 1987, the township committee adopted Ordinance No. 827, which implemented the contents of the Township/Hills' settlement agreement. Notice of the October 13 meeting was given on September 24, 1987.


Appellants contend that inadequate notice was given for the public hearing at which the housing element was adopted, and therefore the element as submitted to the Council was a nullity. Appellants reason that in order for a housing element to be submitted to the Council, it must first be adopted by the municipality pursuant to the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq., and that failure to properly adopt the housing element "means that the documents submitted to COAH on January 5, 1987 did not reflect valid municipal action." Respondents contend that, for purposes of filing with the Council, a housing element need only be prepared, and adoption is unnecessary.

N.J.S.A. 40:55D-13 provides, in relevant part,

The planning board shall give:

(1) Public notice of a hearing on adoption, revision or amendment of the master plan; such notice shall be given by publication in the official newspaper of the municipality, if there be one, or in a newspaper of general circulation in the municipality at least 10 days prior to the date of the hearing. . . .

The Bernards Township Committee held a meeting on December 2, 1986, at which the township housing element was adopted. The meeting scheduled for December 3, 1986, had only eight days' prior notice and the December 2 meeting was held on only five days prior notice. The Township of Bernards housing element was submitted to the Council on Affordable Housing on January 5, 1987. After being alerted to the possible consequences if the December 2 adoption was invalid, the township committee held an open meeting on May 28, 1987 to

adopt the housing element. Notice for this meeting was made on May 13, 1987.

It is uncontested that the notice of the December 2 meeting did not conform with the ten-day notice requirement of N.J.S.A. 40:55D-13(1). Appellants and respondents cite numerous sections of the Municipal Land Use Law (N.J.S.A. 40:55D-1 et seq.) and the Fair Housing Act (N.J.S.A. 52:27D-301 et seq.) in support of their conflicting positions.

N.J.S.A. 52:27D-309 provides, in relevant part,

a. Within four months after the effective date of this act, each municipality which so elects shall, by a duly adopted resolution of participation, notify the council of its intent to submit to the council its fair share housing plan. Within five months after the council's adoption of its criteria and guidelines, the municipality shall prepare and file with the council a housing element, based on the council's criteria and guidelines, and any fair share housing ordinance introduced and given first reading and second reading in a hearing pursuant to R.S. 40:49-2 which implements the housing element. [Emphasis supplied].

N.J.S.A. 52:27D-311 provides, in relevant part,

a. In adopting its housing element, the municipality may provide for its fair share of low and moderate income housing by means of any technique or combination of techniques which provide a realistic opportunity for the provision of the fair share. The housing element shall contain an analysis demonstrating that it will provide such a realistic opportunity, and the municipality shall establish that its land use and other relevant ordinances have been revised to incorporate the provisions for low and moderate income housing. In preparing the housing element, the municipality shall consider the following techniques for providing low and moderate ...

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