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In re Approval of Regional Contribution Agreement Between Boroughs


July 22, 2008


On appeal from the New Jersey Council on Affordable Housing, Resolution No. 07-1902.

Per curiam.


Argued May 29, 2008

Before Judges Cuff, Lisa and Lihotz.

The Fair Share Housing Center (FSHC) presents this appeal challenging the approval of a regional contribution agreement (RCA) between Gibbsboro Borough (Gibbsboro) and Woodlynne Borough (Woodlynne). The terms of the RCA provided that Gibbsboro would pay Woodlynne $1.4 million for housing rehabilitation activities in Woodlynne in satisfaction of Gibbsboro's obligation to provide low- and moderate-income housing. FSHC's appeal follows the September 13, 2006 resolution recommending approval of the RCA by the Council on Affordable Housing (COAH). We determine the approval of the Gibbsboro-Woodlynne RCA resulted by virtue of Superior Court order dated December 13, 2005 and not by COAH's limited review and recommendation. Accordingly, FSHC's appeal challenging the RCA is untimely and must be dismissed.

We briefly set forth the background of Gibbsboro's affordable housing plan and the RCA at issue. In October 1995, Gibbsboro received second-round substantive certification from COAH of its 2000 housing element and fair share plan. The plan satisfied Gibbsboro's cumulative 1987-1999 affordable housing obligation of 120 units, which was comprised of 112 units of new construction and eight rehabilitation units.

Initially, the proposal sought to develop 112 affordable units on two Gibbsboro sites. In December 2004, Gibbsboro's Planning Board adopted a proposed amendment to its second-round substantive certification to replace one of the development sites because that intended site was targeted for open space preservation. In its place, Gibbsboro proposed a fifty-six-unit RCA with Woodlynne whereby Gibbsboro would pay Woodlynne $25,000 per unit for a total of $1.4 million for housing rehabilitation activities in Woodlynne. Gibbsboro moved before COAH for an extension of its second-round substantive certification and approval of the proposed amendment providing for the RCA with Woodlynne.

COAH staff responded stating it "does not review amendment requests during its review of motions for extended substantive certification." In reviewing Gibbsboro's submission, COAH staff determined wetlands made the second proposed site "unsuitable for development at a high enough net density to accommodate the number of units needed." The final staff conclusion was: "Gibbsboro is unable to comply with the terms of its 1987-1999 substantive certification . . . . Gibbsboro may seek third-round certification pursuant to N.J.A.C. 5:95 and must address its 112-unit prior obligation at that time." Thus, Gibbsboro's second-round certification would expire if COAH accepted the staff recommendation and determined Gibbsboro's plan did not meet Mount Laurel*fn1 requirements.

Prior to COAH's final action, Gibbsboro withdrew its motion for an extension of its second-round certification. On April 8, 2005, Gibbsboro filed a Superior Court complaint for declaratory judgment, seeking a determination that it had "fully discharged its affordable housing obligations under the [Fair Housing Act ("FHA"), N.J.S.A. 52:27D-301 to -329] for the second and third housing cycles" and requested an order of compliance and repose protecting it against exclusionary zoning litigation and challenges to its housing element and fair share plan.

COAH objected to Gibbsboro's request for court disposition, arguing COAH retained exclusive jurisdiction over the municipality's efforts to meet its affordable housing obligation. The court dismissed COAH's objection and granted Gibbsboro an order of repose, immunizing it against exclusionary zoning challenges while it sought to satisfy its second- and third-round housing obligations.

The court appointed a Mount Laurel master who determined the proposed RCA "was consistent with the COAH rules governing RCA transfers" and concluded "the combination of RCA units, inclusionary and affordable units and previously rehabilitated affordable units provide[] a realistic opportunity to achieve the 120 unit Second Cycle affordable housing obligation, as indicated in [Gibbsboro's] Amended Housing Element." Accordingly, the master recommended approval of the amendment "conditioned on conformance with all COAH rules relating to [RCAs]."

On December 13, 2005, on notice to interested parties including COAH and appellant, and after the public's opportunity to review and inspect Gibbsboro's amended housing element, the proposed RCA, and related RCA documents, the court held a compliance hearing. After testimony, Judge Vogelson entered a final judgment of compliance and repose with regard to Gibbsboro's amended second-round plan. The judgment reflected the court's finding that Gibbsboro's amended second-round plan was "in compliance with the Borough's Second Round Affordable Housing obligation." The judgment further stated:

IT IS FURTHER ORDERED that the [RCA] between Gibbsboro and Woodlynne Borough is approved as a component of an approved Second Round Housing Element and Fair Share Plan with a per unit contribution of $25,000 and shall be sent to [COAH] for its approval as to form and monitoring; and

IT IS FURTHER ORDERED that the Borough of Gibbsboro be immunized against the filing of Second or Third Round Exclusionary Zoning challenges or suits while the Borough remains under the Court's jurisdiction and voluntarily seeks to satisfy its Third Round Housing obligations.

The Third Round Compliance Hearing is hereby scheduled for March 31, 2006 at 2:00 p.m.

On March 27, 2006, Gibbsboro forwarded its proposed growth-share and development-fee ordinances to the court and asked the proposed development-fee ordinance to be forwarded to COAH "for comments as to form and monitoring." The court requested COAH to review the proposed development-fee ordinance to provide "comments as to form and monitoring of the Third Party Affordable Housing Trust Fund Agreement."

COAH recommended the court approve Gibbsboro's development-fee ordinance with suggested changes and explained COAH's annual monitoring of the Affordable Housing Trust Fund could be accomplished by making "COAH a party to the three-party escrow agreement and permit COAH to direct the disbursement of funds." In a letter dated August 17, 2006, the court directed Gibbsboro to make COAH a party to the third-party escrow agreement regarding the disbursement of funds.

In May 2006, Woodlynne endorsed the RCA and forwarded its project plan for review and approval to COAH, the New Jersey Housing and Mortgage Finance Agency (HMFA), and the Camden County Planning Board (CCPB). Woodlynne proposed a fifty-six unit scattered site rehabilitation program, which would provide a zero-percent-deferred-payment loan to fifty-six low- and moderate-income households to rehabilitate substandard one-to-four family residential structures, requiring replacement of at least one major system, costing about $10,000, and having an average total rehabilitation cost of $21,250. If additional funds were required to complete a unit, Woodlynne would "be required to provide the additional funding." HMFA recommended COAH approve Woodlynne's plan subject to compliance with stated conditions. The CCPB "examined the Master Plan and Zoning Ordinances of the Boroughs of Woodlynne and Gibbsboro, the Master Plan of the County of Camden and the State Development and Redevelopment Plan[s]," and concluded the RCA "promotes and is in accordance with sound, comprehensive regional planning," and adopted a resolution recommending approval of and approving the proposed RCA.

Following its review of the RCA, COAH's staff issued a report and recommended the RCA's approval. The staff report incorporated the HMFA's and CCPB's recommendations and concluded "the 56-unit RCA between Gibbsboro and Woodlynne is in accordance with sound comprehensive regional planning and is a feasible and viable means of providing realistic opportunities for the creation of low- and moderate-income housing in the region" and recommended COAH approval.

During its September 13, 2006 meeting, COAH reviewed the submissions related to the RCA, including FSHC's objections, which were similar to those raised in this appeal. FSHC requested COAH to delay action because it had submitted similar objections to the Superior Court and awaited court disposition. COAH declined that request and voted to approve the RCA. COAH adopted a resolution confirming its approval. The resolution noted that Gibbsboro was "under the jurisdiction of the court," and that both Gibbsboro and Woodlynne had to "submit an RCA . . . for COAH for review and approval." This appeal followed. Disbursement under the agreement was stayed pending appeal.

FSHC raises broad challenges to COAH's review process maintaining it violates the FHA and impedes required "due process." FSHC argues COAH failed to "articulate standards" to implement N.J.S.A. 52:27D-312(c), which frustrated the legislative intent of the FHA and the Mount Laurel doctrine. FSHC also presents more specific attacks on COAH's approval of the Gibbsboro-Woodlynne RCA. FSHC contends the RCA neither meets FHA standards nor provides a realistic opportunity for affordable housing.*fn2 These arguments are aimed at the approval of the RCA.

Respondents advance the position that FSHC's appeal is out of time. They maintain the court approved the RCA on December 13, 2005, when the final judgment of compliance and repose was entered. COAH's review and recommendation of the RCA were performed pursuant to the terms of that court order and did not constitute a final agency action subject to appeal.

The legislative enactment of the FHA "intended to leave the specific methods of compliance with Mt. Laurel in the hands of COAH and the municipalities, charging COAH with the singular responsibility for implementing the statute and developing the state's regulatory policy for affordable housing" and the manner in which those obligations may be satisfied. Holmdel Builders Ass'n v. Twp. of Holmdel, 121 N.J. 550, 576 (1990). The administrative procedures adopted by COAH include a municipality's right to petition COAH for substantive certification of a plan for satisfaction of its affordable housing obligation. N.J.S.A. 52:27D-313 to -314. Although the FHA expresses a legislative preference for the use of an administrative rather than a judicial determination of a municipality's affordable housing obligation, the FHA does not require a municipality to petition COAH for substantive certification. N.J.S.A. 52:27D-313(a); Hills Dev. Co. v. Twp. of Bernards, 103 N.J. 1, 34-35 (1986); Oceanport Holding, L.L.C. v. Borough of Oceanport, 396 N.J. Super. 622, 628 (App. Div. 2007). The statute allows a municipality to seek approval of its housing element through the courts, by initiating a declaratory judgment action for a judgment of repose. N.J.S.A. 52:27D-313(a).

Once Gibbsboro withdrew its motion for extension and filed its court action, COAH objected to interference with its jurisdiction. Judge Vogelson denied COAH's jurisdictional challenge in May 2005 and COAH took no further action on this issue. Accordingly, the Superior Court properly retained jurisdiction to review and determine approval of the GibbsboroWoodlynne RCA.

Prior to making any determination, FSHC and others received notice. There is no question appellant could have appeared as an objector at that time. The record is not clear whether appellant availed itself of this opportunity. Testimony was presented during the compliance hearing and Judge Vogelson concluded the plan met second-round compliance and approved the RCA. The terms of the judgment and the request made to COAH "for approval as to form and monitoring" are unequivocal.

We view COAH's involvement as incidental to the RCA's implementation and note it occurred subsequent to the entry of judgment. For the most part, the court sought COAH's advisory opinion to guide the implementation of the transfer of RCA funds.

Under these facts, we determine COAH's advice was not a final agency 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). Furthermore, appellant's submission appealing COAH's approval of the RCA cannot be characterized as an appeal from an agency decision, which is appealable as of right under Rule 2:2-3(a)(2). Any appeal of the approval of the RCA should have been filed within forty-five days of the entry of the December 13, 2005 final judgment. R. 2:2-3(a)(1).

We reiterate that in Mount Laurel cases, judgments of compliance should provide finality to allow municipalities to enjoy the repose free of litigious interference with the normal planning process. In re Application of Twp. of Jackson, 350 N.J. Super. 369, 372 (App. Div. 2002).

After reviewing the record, and in light of prevailing legal standards, we dismiss FSHC's appeal.

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