No 'gap period' affordable housing obligation, says N.J. appeals court

In a ruling hailed by municipalities and denounced as a victory for "wealthy towns," New Jersey's Appellate Division ruled Monday that cities and townships are not required to zone for affordable housing needs that went unmet between 1999 and 2015.

"We hold that the Fair Housing Act does not require a municipality to retroactively calculate a new 'separate and discrete' affordable housing obligation arising during the 'gap period,' " the three-judge panel wrote.

Instead, it said, municipalities should use previously established methods for calculating their present and future affordable housing needs through 2025.

A legal issue that "had been amorphous is now clear," said Ed Purcell, attorney for the New Jersey League of Municipalities.

Cities and townships that have met their prior obligations, Purcell said, need only assess the adequacy of their current low- and middle-income housing stock, and project demand for affordable housing over the next 10 years, to fulfill their housing requirements under the state Supreme Court's multiple Mount Laurel decisions.

But the Fair Share Housing Center, a leading advocate for affordable housing, said the appeals court erred in its decision.

"The court today deviated from the course New Jersey has set for decades on how this need should be measured, raising the problem of continued delays for thousands of families who have waited years for homes in safe communities with access to good schools and employment opportunities," it said in a statement.

A spokesman said the group was studying what its next steps might be.

Unless reversed by the state Supreme Court, Monday's ruling makes it unlikely that municipalities will have to zone for the 200,000 units that Fair Share had estimated would be the statewide obligation if the gap were part of the equation.

Late last year, a planning firm hired by a consortium of municipalities calculated that Burlington, Camden, and Gloucester Counties must zone for a total of 4,404 units over the next decade. Fair Share, presuming a gap period requirement among many other factors, calculated 30,577 units in the three counties.

Among the differences locally: Fair Share projected an obligation of 1,000 units each for Mount Laurel, Moorestown, and Cherry Hill. The municipalities' consulting firm, Econsult Solutions of Philadelphia, projected 231, 171, and 325, respectively.

Superior Court judges are currently determining municipal obligations on a town-by-town basis.

The "gap period" occurred when the state Council on Affordable Housing (COAH), created to develop guidelines for implementing court-ordered housing obligations, was unable to devise an acceptable formula for calculating those obligations.

In its ruling Monday, the appellate panel also overturned a February decree by Superior Court Judge Mark A. Troncone that Barnegat Township and other municipalities in Ocean County were obliged to calculate their gap period obligations.

Jeffrey R. Surenian, a Brielle lawyer representing Barnegat and about half the municipalities in the state, appealed Troncone's ruling, and the Supreme Court instructed the Appellate Division to rule on it swiftly. Judges heard oral arguments in Mount Holly on June 6.

Surenian argued at the hearing that nothing in the Fair Housing Act of 1985 obliged municipalities to calculate retroactive affordable-housing needs.

"It's a forward-looking obligation," Surenian told the judges.

Fair Share executive director Kevin Walsh told the judges that the state Supreme Court had repeatedly stated that "prior unfulfilled obligations have to be fulfilled."

But the appeals panel opined that it was the role of the legislature and executive branch - not the courts - to decide if municipalities must calculate past affordable housing obligations.

Fair Share said Monday the decision "plays into the hands of wealthy towns that are seeking to delay and exclude because it requires further studies at a time when the needs of New Jersey working families, seniors, and people with disabilities are so great."

The Housing and Community Development Network of New Jersey, an advocacy group, said it was disappointed by the ruling because it would create "new hurdles for too many households that have struggled to make ends meet during the gap period."

Sen. Kip Bateman (R., Somerset) hailed the ruling in a statement, saying it spared the state from a "catastrophic" gap obligation that would have had a "decimating" effect on municipalities. Bateman has proposed legislation that would give lawmakers more say in deciding affordable housing obligations, which are largely regulated by the courts.

Econsult, hired by the consortium of municipalities that Surenian represents, has calculated that New Jersey's 565 municipalities must zone for about 37,000 affordable housing units, roughly one-fifth Fair Share's estimate.

Despite its disagreement with the ruling, Fair Share said the decision did not entirely reject its position.

It noted that the judges cited an opinion of the state Supreme Court that "unfulfilled obligations 'should be the starting point for a determination of a municipality's fair-share responsibility.' "