On appeal from New Jersey Council on Affordable Housing.
J.h. Coleman, Arnold M. Stein and Conley. The opinion of the court was delivered by Coleman, J.h., P.J.A.D.
One issue raised in this appeal is whether regulations, which do not include affordability as part of the standard for determining whether a housing unit constructed or rehabilitated between 1980 and 1986 can be the basis for a municipality's credit against its fair share pursuant to N.J.S.A. 52:27D-307c(1), are ultra vires. The second issue is whether the regulations violate the general welfare provision under the police powers of N.J.Const. Art. IV, § 6, para. 2, and the substantive due process and equal protection provisions inherent in N.J. Const. Art. I, para. 1, as explicated in Southern Burlington Cty. N.A.A.C.P. v. Mount Laurel Tp., 67 N.J. 151, 174-181, 336 A.2d 713, app. dismissed, and cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975), (Mt. Laurel I); Southern Burlington Cty. N.A.A.C.P. v. Mount Laurel Tp., 92 N.J. 158, 208-248, 456 A.2d 390 (1983) (Mt. Laurel II) and subsequent cases.
The Fair Housing Act (Act), N.J.S.A. 52:27D-301 et seq., adopted in 1985, authorizes the Council on Affordable Housing (COAH) to promulgate regulations to ensure compliance with Mt. Laurel II, pursuant to N.J.S.A. 52:27D-307. COAH promulgated regulations, codified as N.J.A.C. 5:92-1 et seq., to determine what constituted a municipality's fair share of a region's low and moderate income housing. This appeal focuses on the regulations which determine a municipality's credit under N.J.S.A. 52:27D-307c(1).
COAH's initial set of regulations were effective August 4, 1986, and were supplemented December 15, 1986. 18 N.J.R. 1527 (Aug. 4, 1986); 18 N.J.R. 2442 (Dec. 15, 1986). COAH originally interpreted
the mandatory credit provision of N.J.S.A. 52:27D-307c(1) as applying only to housing units created or rehabilitated between April 1, 1980, and December 15, 1986, where occupancy of the unit was restricted to low or moderate income households, and where the price of the unit was controlled in accordance with COAH affordability standards. See N.J.A.C. 5:92-6.1a as adopted on August 4, 1986.
In Bernards Tp. v. Dep't of Com. Affairs, 233 N.J. Super. 1, 12-13, 558 A.2d 1 (App.Div.), certif. denied, 118 N.J. 194, 570 A.2d 959 (1989), we held that the portion of N.J.A.C. 5:92-6.1a which required that credits pursuant to N.J.S.A. 52:27D-307c(1) were available to a municipality only if "a unit's occupancy is restricted to low or moderate income households" was violative of the Act. COAH has interpreted Bernards Tp. to preclude consideration of affordability in determining a municipality's credit.
After consideration by a task force and much debate otherwise, COAH issued a new regulation dealing with a municipality's credit under N.J.S.A. 52:27D-307c(1), thereby amending N.J.A.C. 5:92-6.1a. The amendments, adopted July 12, 1991, are referred to as "Credits Without Controls." They provide:
(a) Municipal present and prospective fair share shall be determined after crediting, on a one to one basis, those housing units created or rehabilitated after April 1, 1980 that meet the criteria in N.J.A.C. 5:92-6.2 and 6.3 . . .
5:92-6.3 New construction
(a) A housing unit created and occupied between April 1, 1980 and December 15, 1986 shall receive a credit if it is in sound condition and currently occupied by a low or moderate ...