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In re Petition for Substantive Certification Filed

Decided: March 26, 1991.

IN RE PETITION FOR SUBSTANTIVE CERTIFICATION FILED BY THE TOWNSHIP OF DENVILLE


On appeal from a Final Decision of the Council on Affordable Housing.

Shebell, Havey and Skillman. The opinion of the court was delivered by Havey, J.A.D. Shebell, J.A.D., concurring in part and dissenting in part.

Havey

[247 NJSuper Page 190] In this Mount Laurel litigation, the Public Advocate, on his own behalf and on behalf of the Morris County Fair Housing Council and Morris County Branch of the N.A.A.C.P., appeals from a grant of substantive certification by the Council on Affordable Housing (COAH) approving the Township of Denville's housing element and fair share plan. Appellants had filed an action in the Law Division against Denville claiming that the township's zoning violated the Mount Laurel*fn1 mandate

that it provide its fair share of low and moderate income housing. The matter was transferred from the Law Division to COAH following the Supreme Court's decision in Hills Dev. Co. v. Township of Bernards, 103 N.J. 1, 510 A.2d 621 (1986). While Denville's fair share plan was pending before COAH, appellant Cali Associates moved for a builder's remedy which COAH denied. Cali appeals from that denial and joins in the arguments raised by the Public Advocate. We have consolidated the appeals for purposes of this opinion.

The Public Advocate has raised an array of challenges to Denville's plan. However, the single contention addressed here is that COAH should have rejected Denville's proposed 201-unit development because the development is made up of all low and moderate income housing units and is "isolated" from other residential communities in Denville. According to the Public Advocate, this component of Denville's fair share plan will result in a "ghetto" of poor people and racial minorities, contrary to the Fair Housing Act of 1985 (FHA), N.J.S.A. 52:27D-301 to -329 state and federal civil rights laws and the federal and New Jersey constitutions. We hold that a development consisting of all Mount Laurel units is sustainable under the FHA. However, we remand to COAH for a determination as to the suitability of the proposed site for Mount Laurel housing.

Denville, a suburban municipality located in the north-central section of Morris County, is part of the Northwest Housing Region, consisting of Essex, Morris, Sussex and Union Counties. See N.J.A.C. 5:92-2.1. In 1980, Denville had a population of 14,380. Blacks and Hispanics make up 1.1 percent of the population of the township and 64.1 percent of the low and moderate income households of the region.

COAH assigned Denville a fair share of 417 units, 31 representing indigenous need and 386 representing the present and

prospective fair share of the region's need. Denville's plan, approved by COAH, includes a request for a 29-unit credit for rehabilitated units; the construction of 201 rental, low and medium income units on a 40-acre site in Denville; a regional contribution agreement (RCA) with Newark for the construction or rehabilitation of 136 units, an RCA with Boonton for the construction of 38 units, and a rental bonus credit of 13 units.*fn2

The 201-unit development, pertinent here, will consist of all low and moderate income units constructed on the "McGreevy" site, a 40-acre tract purchased by the township. Seventy-five units will be constructed by the Morris County Housing Authority under a $5.4 million grant from the Federal Housing and Urban Development Agency, and 126 rental units by St. Francis Lifecare, Inc. The proposed development will be subject to an "occupancy preference" under which 50 percent of the units are reserved for those who live or work in Denville. See N.J.A.C. 5:92-15.1.

On appeal, the Public Advocate raises the following points:

Point I -- In determining whether to grant Denville Township's petition for substantive certification, the Council is obligated to determine not only whether the municipal housing element and fair share plan complies with the Council's own regulations and policies, but also whether it violates the New Jersey Constitution as construed in the Mt. Laurel decisions, the Fair Housing Act of 1985 and the relevant state and federal civil rights laws.

Point II -- By failing to render specific findings of fact and conclusions of law and by failing to grant an evidentiary hearing on controverted issues, the Council violated principles of procedural fairness and due process and the requirements of the Fair Housing Act and the Administrative Procedure Act.

Point III -- The Council unlawfully approved the housing element and fair share plan submitted by Denville Township which perpetuates exclusionary zoning in violation of the New Jersey Constitution and the Fair Housing Act of 1985.

Point IV -- The housing element and fair share plan submitted by Denville Township constitutes illegal racial discrimination and therefore could not law-fully be approved by the Council on Affordable Housing.

A. The plan submitted by Denville Township incorporates criteria for selection of occupants of lower income housing that constitutes unlawful racial discrimination.

B. The plan submitted by Denville Township incorporates Regional Contribution Agreement between Denville Township and Newark that ...


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