For several decades, affordable housing has been a complex and intricate issue throughout the State of New Jersey. Our firm has extensive experience in helping guide local communities as well as private developers through the many intricacies of this topic. Specifically, we have prepared numerous Housing Elements and Fair Share Plans for municipalities throughout northern and central New Jersey. Moreover, our founder Joe Burgis has served as a Special Master to several judges for affordable housing matters.
What is affordable housing?
Put simply, affordable housing is housing that is available to very-low, low-, and moderate-income households. These incomes are derived from median regional income limits which comprise different portions of the State of New Jersey, and are summarized below.
Why do municipalities need affordable housing?
Municipalities throughout the state are required to enable, through their master plans and zoning ordinances, the development of affordable housing. This is due to a series of historic New Jersey Supreme Court decisions and legislative actions which date back to 1975.
Those municipalities that are not in compliance with its affordable housing obligations are subject to a “Builder’s Remedy” lawsuit. Under such a lawsuit, a developer is allowed to bring litigation against a municipality to change the zoning on any site within the community, provided the developer promises to set-aside twenty percent (20%) of its proposed development for affordable households.
What is the History of Affordable Housing?
COAH proceeded to adopt regulations for the First Round obligation, which covered the years 1987 to 1993. It also established the Second Round housing-need numbers that cumulatively covered the years 1987 through 1999. Under both the First and Second Rounds, COAH utilized what is commonly referred to as the “fair share” methodology. COAH utilized a different methodology, known as “growth share,” beginning with its efforts to prepare Third Round housing-need numbers. The Third Round substantive and procedural rules were first adopted in 2004. These regulations were challenged and in January 2007, the Appellate Division invalidated various aspects of these rules and remanded considerable portions of the rules to COAH with the directive to adopt revised regulations.
In May 2008, COAH adopted revised Third Round regulations which were published and became effective on June 2, 2008. Coincident to this adoption, COAH proposed amendments to the rules they had just adopted, which subsequently went into effect in October 2008. These 2008 rules and regulations were subsequently challenged, and in an October 2010 decision the Appellate Division invalidated the Growth Share methodology, and also indicated that COAH should adopt regulations pursuant to the Fair Share methodology utilized in Rounds One and Two. The Supreme Court affirmed this decision in September 2013, which invalidated much of the third iteration of the Third Round regulations and sustained the invalidation of growth share. As a result, the Court directed COAH to adopt new regulations pursuant to the methodology utilized in Rounds One and Two.
Deadlocked with a 3-3 vote, COAH failed to adopt newly revised Third Round regulations in October 2014. The Fair Share Housing Center, who was a party in both the 2010 and 2013 cases, responded by filing a motion in aid of litigants’ rights with the New Jersey Supreme Court. The Court heard the motion in January 2015, and issued its ruling on March 20, 2015. The Court ruled that COAH was effectively dysfunctional, and consequently returned jurisdiction of affordable housing issues back to the trial courts where it had originally been prior to the creation of COAH in 1985.
This 2015 Court decision created a process in which municipalities may file a declaratory judgment action seeking a declaration that their HE&FSP is constitutionally compliant and receive temporary immunity from affordable housing builders’ remedy lawsuits while preparing a new or revised HE&FSP to ensure their plan continues to affirmatively address their local housing need as may be adjusted by new housing-need numbers promulgated by the court or COAH.
Subsequently, the Supreme Court ruled on January 18, 2017 that municipalities are also responsible for obligations accruing during the so-called “gap period,” the period of time between 1999 and 2015. However, the Court stated that the gap obligation should be calculated as a never-before calculated component of Present Need, which would serve to capture Gap Period households that were presently in need of affordable housing as of the date of the Present Need calculation (i.e. that were still income eligible, were not captured as part of traditional present need, were still living in New Jersey and otherwise represented a Present affordable housing need).
What is a Housing Element and Fair Share Plan?
While technically a discretionary component of a master plan as provided for in NJSA 40:55D-28b of the Municipal Land Use Law (MLUL), a Housing Element and Fair Share Plan (HE&FSP) is nevertheless an effectively obligatory plan element. As established by NJSA 40:55D-62.a, a municipality must have an adopted HE&FSP in order to enact its zoning ordinance. From a public policy perspective, a HE&FSP is therefore an essential community document.
A HE&FSP serves as the blueprint for how a municipality will address its fair share of affordable housing. It is designed to help a community broaden the accessibility of affordable housing. Without a HE&FSP, a municipality may be susceptible to builder’s remedy lawsuits.
The Fair Housing Act establishes the required parts of a HE&FSP, which have subsequently been supplemented by rules from the Council on Affordable Housing (COAH). These parts include the following:
- An inventory of the municipality’s housing stock by age, condition, purchase or rental value, occupancy characteristics and type, including the number of units affordable to low- and moderate-income households and substandard housing capable of being rehabilitated;
- A projection of the municipality’s housing stock, including the probable future construction of low- and moderate-income housing for the next ten years, taking into account, but not necessarily limited to, construction permits issued, approvals of applications for development, and probable residential development of lands;
- An analysis of the municipality’s demographic characteristics, including but not necessarily limited to, household size, income level, and age;
- An analysis of the existing and probable future employment characteristics of the municipality;
- A determination of the municipality’s present and prospective fair share for very-low, low- and moderate-income housing and its capacity to accommodate its housing needs, including its fair share for very-low, low- and moderate-income housing; and
- A consideration of the lands that are most appropriate for construction of very-low, low- and moderate-income housing and of the existing structures most appropriate for conversion to, or rehabilitation for, very-low, low- and moderate-income housing, including a consideration of lands of developers who have expressed a commitment to provide very-low, low- and moderate-income housing.