Borough of Roseland, In re

Page 203

247 N.J.Super. 203

588 A.2d 1256

In re Petition for Substantive Certification Filed by the BOROUGH OF ROSELAND.

Superior Court of New Jersey Appellate Division.

Submitted Feb. 6, 1991.

Decided March 26, 1991.

Wilfredo Caraballo, Public Advocate, for appellant in A-1554-88T3 and respondent in A-1563-88T3 (Stephen Eisdorfer, Asst. Deputy Public Advocate, on the brief).

Fox & Fox, for Borough of Roseland, appellant in A-1563-88T3 and respondent in A-1554-88T3 (David I. Fox, Newark, of counsel; Audrey S. Stern, Roseland, on the brief in A-1563-88T3 and David I. Fox, of counsel; Philip H. Cohen, Newark, on the brief in A-1554-88T3).

Robert J. Del Tufo, Atty. Gen., for respondent Council on Affordable Housing (Michael R. Clancy, Asst. Atty. Gen., of counsel; Geraldine Callahan and Donald M. Palombi, Deputy Attys. Gen., on the brief in A-1554-88T3; Mary C. Jacobson, Deputy Atty. Gen., of counsel; Donald M. Palombi, on the brief in A-1563-88T3).

Greenbaum, Rowe, Smith, Ravin, Davis & Bergstein, for Essex Glen, Inc. submitted a letter advising that it would rely upon the brief submitted by Borough of Roseland (Douglas K. Wolfson, Woodbridge, on the letter).

Before Judges SHEBELL, HAVEY and SKILLMAN.

The opinion of the court was delivered by

SKILLMAN, J.A.D.

The Public Advocate appeals from a final decision of the Council on Affordable Housing (COAH) granting substantive certification pursuant to N.J.S.A. 52:27D-314 to the housing element and fair share plan of the Borough of Roseland (Roseland). Roseland appeals from COAH's interpretation of the occupancy preference authorized by N.J.A.C. 5:92-15.1, which Roseland was required to follow in order to receive substantive certification. Since the appeals were both taken from COAH's grant of substantive certification to Roseland, we consolidate them.

This proceeding was initiated by a property owner filing an action in the Law Division alleging that Roseland's zoning ordinances fail to provide a reasonable opportunity for the construction of housing affordable to lower income households and are therefore unconstitutional under the Mount Laurel doctrine. See Southern Burlington Cty. NAACP v. Township of Mount Laurel, 67 N.J. 151, 336 A.2d 713 (Mount Laurel I ), appeal dismissed and cert. den., 423 U.S. 808, 96 S.Ct. 18, 46 L.Ed.2d 28 (1975), and 92 N.J. 158, 456 A.2d 390 (1983) (Mount Laurel II ). After enactment of the Fair Housing Act of 1985 (FHA), N.J.S.A. 52:27D-301 to -329, the Law Division transferred the case to COAH pursuant to N.J.S.A. 52:27D-316. COAH treated Roseland's motion for transfer as a petition for substantive certification, see Hills Dev. Co. v. Township of Bernards, 103 N.J. 1, 38 n. 10, 510 A.2d 621 (1986), and the Public Advocate filed objections to the petition. COAH rejected the Public Advocate's objections and granted substantive certification to Roseland's fair share plan.

COAH determined that Roseland's fair share of Mount Laurel housing is 165 units. Roseland's certified fair share plan provides for the satisfaction of this obligation through the rehabilitation of three indigenous substandard units, the construction of 96 units in three inclusionary developments in Roseland and a regional contribution agreement (RCA) with the City of Newark under which Roseland will pay $1,138,500 to Newark for the construction of 66 units of new housing. Roseland's fair share plan further provides, as permitted by COAH's regulations, that households which presently reside in the municipality or which have a member who works there shall be granted an occupancy preference with respect to the purchase or rental of new lower income housing constructed in Roseland.

In his appeal, the Public Advocate argues that Roseland's RCA with Newark and the occupancy preference violate the Mount Laurel doctrine by perpetuating exclusionary zoning and violate constitutional and statutory prohibitions against racial discrimination by perpetuating racial stratification within the region. The Public Advocate also argues that COAH's standards of affordability for Mount Laurel housing violate the Mount Laurel doctrine by not providing a realistic opportunity for the construction of housing affordable to persons earning less than 40% of the median household income in the region. We reject these arguments for the reasons expressed in In re Petition for Substantive Certification Filed by the Township of Warren, 247 N.J.Super. 146, 588 A.2d 1227 (App.Div.1991), which is also being filed today.

The Public Advocate's arguments which are not addressed in Warren are that COAH erred in granting Roseland a downward adjustment of its pre-credited need number for lack of vacant and developable land, and that any housing units deducted from Roseland's pre-credited need number should have been reallocated to other municipalities in the housing region. These arguments are addressed in section I of this opinion. In its appeal, Roseland argues that COAH improperly amended its occupancy preference regulation without following the rulemaking procedures of the Administrative Procedure Act (APA), N.J.S.A. 52:14B-4. This argument is addressed in section II.

I

N.J.S.A. 52:27D-307(c)(2)(f) requires COAH to adopt "criteria and guidelines" for "[m]unicipal adjustment of the present and prospective fair share ... whenever ... [v]acant and developable land is not available in the municipality." Pursuant to this statutory mandate, COAH has adopted comprehensive regulations describing the conditions a municipality must satisfy in order to receive an adjustment of its Mount Laurel obligation. N.J.A.C. 5:92-8.1 to 8.6. In brief, N.J.A.C. 5:92-8.2(b) provides that COAH shall determine the amount and location of vacant and developable land within a municipality, and N.J.A.C. 5:92-8.4(c) provides that COAH shall determine the municipality's ability to absorb its pre-credited need number through inclusionary developments on that vacant and developable land. If a municipality demonstrates that it does not have sufficient vacant and developable land to accommodate its full obligation as determined under COAH's methodology for calculating municipal Mount Laurel obligations, COAH may grant a downward adjustment of that obligation. N.J.A.C. 5:92-8.1. ¹

Pursuant to these regulations, COAH determined that there were only 94 acres of vacant and developable land in Roseland and that that land was sufficient for the construction of only 162 units of lower income housing in inclusionary developments. Accordingly, COAH granted Roseland a downward adjustment of its Mount Laurel obligation from 260 to 165 units of lower income housing (consisting of three substandard housing units within the municipality which will be rehabilitated and a regional fair share obligation of 162 units).

The Public Advocate does not dispute COAH's calculation of the amount of vacant and developable land in Roseland or the number of lower income housing units which could be constructed as part of inclusionary developments on that land. Consequently, the Public Advocate in effect concedes that the downward adjustment of Roseland's fair share would be appropriate if Roseland elected to satisfy its entire obligation through construction of Mount Laurel housing in inclusionary developments in Roseland. However, the Public Advocate argues that because Roseland elected to satisfy part of its obligation through an RCA with Newark and therefore does not have to utilize all of its vacant and developable land for Mount Laurel housing, the downward adjustment violated the Mount Laurel doctrine and the FHA.

We reject this argument and conclude that a municipality's Mount Laurel obligation, once properly calculated, is not subject to recalculation based on the manner in which the municipality chooses to satisfy the obligation. The Legislature has expressly authorized a municipality to "transfer ... up to 50% of its fair share to another municipality within its housing region by means of [a regional contribution agreement]...." N.J.S.A. 52:27D-312(a). The Legislature also has authorized a municipality to "provide for its fair share of low and moderate income housing by means of any technique or combination of techniques which provide a realistic opportunity for the provision of the fair share." N.J.S.A. 52:27D-311(a). We believe that these statutory provisions, which expressly allow a municipality to use an RCA to satisfy part of its Mount Laurel obligation, would be violated if a municipality which had been properly granted a downward adjustment of its Mount Laurel obligation for lack of vacant and developable land were to lose the benefit of that adjustment simply because it chose to satisfy part of its obligation through an RCA. We further note that the total Mount Laurel obligation of a municipality which has received a downward adjustment for lack of vacant and developable land remains the same, regardless of whether the municipality zones for its entire obligation to be constructed within its boundaries or enters into an RCA to fund the construction or rehabilitation of units in another municipality as part of its fair share plan.

The Public Advocate also contends that if COAH's approval of the downward adjustment of Roseland's Mount Laurel obligation was justifiable, COAH was required to assure that this adjustment was compensated by an increase in the number of lower income housing units to be created in other municipalities in the region. However, we recently rejected substantially the same argument in Calton Homes, Inc. v. Council on Affordable Hous., supra, 244 N.J.Super. at 461, 582 A.2d 1024:

Calton argues that if the adjustments are to be granted, the units thereby eliminated must be reallocated elsewhere in the region. The Council notes that "[s]uch reassignment would be difficult to do fairly, and impossible if some of the regional municipalities were already certified ... [and would] make some municipalities...