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In re Petition for Substantive Certification

March 20, 2001


On appeal from the Council on Affordable Housing, Docket No. 98-1005.

Before Judges Skillman, Wecker and Lesemann.

The opinion of the court was delivered by: Skillman, P.J.A.D.


Argued December 12, 2000

This is an appeal by L.T.D., L.L.C. (LTD), a contract purchaser of property in the Township of Southampton, from a final decision of the Council on Affordable Housing (COAH), granting substantive certification under the Fair Housing Act, N.J.S.A. 52:27D-301 to -329, to an affordable housing compliance plan submitted by Southampton, and denying LTD's motion for reconsideration. The primary issue presented is whether COAH is required to consider information which indicates that a municipality's compliance plan does not comply with COAH's regulations and does not provide a realistic opportunity for satisfaction of the municipality's affordable housing obligation, if the information is provided by a party who failed to file a timely objection to the plan.

Southampton is a forty-three square mile township in Burlington County with a population of about 10,000 people. It has two developed areas, the Village of Vincentown, a well- preserved historic district occupied by approximately 200 structures, and the Leisuretown retirement community. The rest of Southampton consists mainly of farmland.

In 1989 COAH granted Southampton substantive certification for a compliance plan that provided Southampton with protection from exclusionary zoning litigation from 1989 to 1995. COAH determined that Southampton's affordable housing obligation during that period was 114 units, which Southampton satisfied by providing for the rehabilitation of 2 units and rezoning for 112 new affordable units to be constructed on a site in the municipality's Rural Residential (RR-1) zone. However, because there is no public water or sewer service on this site, Southampton was able to obtain a "durational adjustment," under which it was allowed to postpone satisfaction of its affordable housing obligation until water and sewer service actually become available. It is undisputed that no new affordable housing was constructed or even authorized in Southampton during the six-year period of its initial substantive certification.

Southampton petitioned for substantive certification of a new compliance plan in May 1995. As of that time, COAH had determined that Southampton's "second cycle" affordable housing obligation was 153 units.*fn1 Southampton's compliance plan again proposed to satisfy a substantial portion of this obligation through the same site in the RR-1 zone relied upon in the 1989 plan, which still had no public water or sewer service. After COAH rejected Southampton's initial plan and directed it to file an amended plan, Southampton identified another site for affordable housing immediately adjacent to the site in the RR-1 zone, which also had no water or sewer service. Southampton again sought a durational adjustment for the entire portion of its affordable housing obligation which it proposed to satisfy by rezoning for new construction.

On July 9, 1997, COAH rejected Southampton's petition for substantive certification for various reasons, including the fact that neither site the municipality had designated for affordable housing had water or sewer service. The report of COAH's planner upon which COAH based its rejection of Southampton's compliance plan stated that "[i]f Southampton intends to address its obligation through inclusionary zoning, it must first consider land within the Village of Vincentown for affordable housing to the extent that vacant land and sewer are available." The report also noted that "there are techniques available to the township other than zoning for addressing its affordable housing obligation (rehabilitation of deficient units, group homes, regional contribution agreements, accessory apartments, conversions of old schools or firehouses, buy-down program, etc.)."

On October 7, 1997, Southampton submitted a revised compliance plan and re-petitioned for substantive certification. The revised plan continued to rely upon the site in the RR-1 zone to satisfy sixty-eight units of the municipality's affordable housing obligation, and again sought a durational adjustment for that site. In addition, in place of the site adjacent to the site in the RR-1 zone included in the rejected plan, Southampton substituted two parcels of land in a zoning district designated as TC-1, in which it claimed 186 housing units could be constructed, including 37 affordable to lower income households. The revised plan noted that "[t]he sewer system is within a few hundred feet of these parcels and easily accessible," and that Southampton is "in the process of amending [its] Wastewater Management Plan to include these parcels within [its] sewer service area." Southampton's revised plan also proposed a rehabilitation program for forty-eight existing deficient housing units within the municipality.

On March 13, 1998, COAH's planner submitted a report which recommended that Southampton be granted conditional substantive certification. This report stated that the owners of the properties in the RR-1 site had all signed statements expressing their belief that "the zoning on the site [for high density development that will include affordable housing] is realistic and that the reason the parcel did not develop during the previous certification was the decline of the housing market." However, the planner's report noted that there is no public water or sewer service in the RR-1 zone, and that the site "is not included in the sewer service area." The report also noted that Southampton proposed to re-zone two lots in the TC-1 zone, which "will yield 37 affordable units," and that Southampton was in the process of revising its wastewater management plan (WMP) to include the TC-1 zone in the sewer service area.

On March 23, 1998, Southampton/38 Associates, the owner of the largest lot in the RR-1 zone designated for affordable housing, sent a letter to COAH which stated that "the bulk of the 56 acres" on which housing was proposed to be built was "subject to wetlands designation and that only approximately 24 of the 56 acres is buildable." The letter suggested that "the 56-acre[s] designated [in the] plan [be] expanded to include adjoining properties which are qualified uplands."

On March 30, 1998, LTD sent a letter to COAH which also alleged that "the proposed RR-1 Zone cannot realistically achieve the development anticipated and yield the designated number of affordable units." This letter was accompanied by a memorandum prepared by LTD's planner, which stated that photo-infrared mapping of the area by the Department of Environmental Protection (DEP) showed only 40.6 acres of upland and that "[w]hen the wetlands, buffers and non-developable lands are excluded . . .[,] developable land is only 27.1 acres." LTD requested COAH to postpone action on Southampton's petition for one month to consider this information.

On March 31, 1998, COAH's executive director sent a letter to LTD denying its request to postpone consideration of Southampton's petition, and on April 1, 1998, COAH voted to grant conditional substantive certification to Southampton's compliance plan. The conditions that Southampton was required to satisfy to obtain final certification included submission to the DEP of an amendment of its WMP to extend the sewer service area to the two lots in the TC-1 zone designated for affordable housing. The resolution granting conditional substantive certification did not mention that the proposed affordable housing site in the RR-1 zone had no public water or sewer service, and that there were no plans for extending those services to the area. The resolution also did not respond to Southampton's request for a durational adjustment for this site.

On July 1, 1998, COAH voted to grant Southampton final substantive certification. COAH's resolution noted that "Southampton [had] submitted an amended [WMP] to the DEP [to extend its sewer service area to include the two lots in the TC-1 zone]." The resolution also stated that "COAH shall monitor the DEP approval process for Southampton's [WMP] amendment and if Southampton Township's [WMP] amendment cannot be approved by DEP within two years, COAH may require Southampton Township to amend its housing element and fair share plan to address the units in the TC-1 zone." However, this resolution again failed to mention the lack of any public water or sewer service in the RR-1 site or Southampton's request for a durational adjustment.

On July 13, 1998, LTD submitted a motion for reconsideration of the grant of final substantive certification to Southampton. Accompanying the motion was a memorandum prepared by LTD's planner which revealed that the two lots in the TC-1 zone that Southampton had designated for a total of 186 housing units, including 37 affordable units, are already occupied by substantial commercial structures. The smaller lot contains a heating oil company office building erected in 1996 as well as a number of other structures. The larger lot contains a warehouse complex. Although the structures in this complex are vacant, LTD's planner indicated that "[t]he demolition costs . . . would be quite expensive and may require state environmental approvals." He also stated that there are several other tracts near the two lots that Southampton placed in the TC-1 zone which would be more suitable for affordable housing.

Southampton's planning consultant submitted a certification in opposition to LTD's motion which stated that "[t]he sites in which the movant is claiming as more suitable for growth do not meet Southampton's Master Plan goals and objectives, the [State Development and Redevelopment Plan] goals and objectives and Burlington County's support of preserving the referenced parcels for farmland." He also asserted that the heating oil company had "abandoned" the smaller lot in the TC-1 zone. Southampton's planner did not comment upon the LTD planner's opinion that the demolition of the buildings on the larger lot "would be quite expensive and may require state environmental approvals."

On October 19, 1998, LTD submitted an additional certification by another planner, which concluded that there is no realistic possibility that affordable housing will be constructed in the RR-1 zone because there are no plans to extend sewer service to the area:

The proposed Southampton Township Wastewater Management Plan, pending before NJDEP since 1995, still does not propose extending sewer service to the RR-1 zone . . . . Without sewer infrastructure, there is no likelihood that ...

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