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In re Application of the Township of Jackson

April 24, 2002

IN THE MATTER OF THE APPLICATION OF THE TOWNSHIP OF JACKSON, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, APPELLANT.


Before Judges Havey, Coburn and Weissbard.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 18, 2002

On appeal from the Council on Affordable Housing.

This appeal concerns the interpretation by the Council on Affordable Housing (COAH) of § 307e of the Fair Housing Act (FHA), N.J.S.A. 52:27D-301 to -329. Section 307e caps a municipality's "fair share" obligation at 1,000 units "within six years from the grant of substantive certification, unless it is demonstrated, following . . . an evidentiary hearing . . . that it is likely that the municipality through its zoning powers could create a realistic opportunity for more than 1,000 low and moderate income units within that six-year period."

The matter comes before us as a result of an interpretation of § 307e by COAH, which was issued in response to an inquiry by Philip Caton, the Master appointed by Judge Serpentelli in a declaratory judgment action instituted by appellant, Township of Jackson, see N.J.S.A. 52:27D-313a, in which Jackson seeks approval of its second cycle fair-share obligation. Caton asked COAH for a written explanation as to how the 1,000 unit cap would be applied to Jackson's second cycle fair-share obligation, which had been fixed at 1,323. Jackson devised a plan for 1,165 units. Judge Serpentelli has elected to withhold any decision on Jackson's declaratory judgment action pending COAH's decision.

By letter dated November 1, 1999, COAH responded to Caton by stating that the 1,000 unit cap applied to a municipality's "calculated need," not its pre-credited need; that is, if, after applying applicable credits and reductions, Jackson's fair-share number is more than 1,000, "it is capped at 1,000." Jackson moved for reconsideration. By written opinion dated May 3, 2000, COAH reaffirmed its prior determination that the 1,000 unit cap applied to a municipality's calculated, not pre-credited need, and therefore stated that Jackson's entitlement to cap relief depended upon whether its calculated need exceeded 1,000 units. Jackson has appealed COAH's determination.

I.

Preliminarily, strictly speaking Jackson's appeal is not from a final decision of a State agency. See R. 2:2-3(a)(2). Jackson appeals from an advisory opinion by COAH given in order to guide the Law Division in a pending declaratory judgment action. See N.J. Civil Serv. Ass'n v. State, 88 N.J. 605, 612 (1982) (opinions of an administrative agency on which no action is taken do not constitute final agency action which may be appealed as of right). Jackson should have awaited entry of a final judgment in the Law Division and then appeal as of right. R. 2:2-3(a)(1). The appeal is inconsistent with the policy of the Supreme Court that all Mount Laurel issues should be decided in one proceeding, with a single appeal. So. Burlington Cty. N.A.A.C.P. v. Tp. of Mount Laurel, 92 N.J. 158, 290 (1983) (Mount Laurel II). Nevertheless, for the purpose of resolving the narrow issue before us, whether the 1,000 unit cap applies to pre-credited or calculated need, we treat the appeal as a motion for leave to appeal and grant the motion. R. 2:4-4(b)(2).

Section 307e caps a municipality's "fair share" at 1,000 units. The term "fair share" is undefined by the FHA and COAH regulations, despite the fact that it is at the heart of the Mount Laurel doctrine. In defining the municipalities' constitutionally-mandated obligation to provide affordable housing, the Court in Mount Laurel II acknowledged that a judicially-imposed remedy to such housing could result in the "construction of lower income housing in such quantity as would radically transform the municipality overnight." 92 N.J. at 219. The Court stressed that the Mount Laurel doctrine was not intended to "sweep away all land use restrictions or leave our open spaces and natural resources prey to speculators." Ibid. After setting forth the parameters of the doctrine and procedure to carry it out, the Court ultimately encouraged legislative initiatives to implement the doctrine. Id. at 212-13, 352.

The legislative response was the FHA, L. 1985, c.222. Section 307e, as initially enacted, authorized COAH to place a limit on the number of units allocated to a municipality based on a percentage of existing housing stock and other criteria. N.J.S.A. 52:27D-307c(2)(b) authorized COAH to adopt guidelines to address the potential that an "established pattern of development in the community [may] be drastically altered." Obedient to the legislative mandate, in May 1987, COAH adopted N.J.A.C. 5:92-7.1 which, provided in applicable part:

After receiving the crediting provided in Subchapter 6, Credits, where a municipality's present and prospective fair share exceeds 1,000 low and moderate income housing units, the municipality may adjust its fair share to 1,000. [19 N.J.R. 806(a).]

In Calton Homes, Inc. v. Council on Affordable Hous., 244 N.J. Super. 438, 447-48 (App. Div. 1990), certif. denied, 127 N.J. 326 (1991), we invalidated N.J.A.C. 7:92-7.1(b) because it was not based on any "criteria," observing that:

By granting the Council the power to base its fair share limits upon any criteria "which the [C]ouncil deems appropriate," N.J.S.A. 52:27D-307e, the Legislature could not have intended to convey unbridled discretion to select an absolute cap on the number of units to be built without first considering the burden imposed on the petitioning municipality and its relationship to other municipalities sharing the burden of providing ...


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