Township of Bernards v. State, Dept. of Community Affairs

Page 1

233 N.J.Super. 1

558 A.2d 1

TOWNSHIP OF BERNARDS, a municipal corporation of the State of New Jersey, Plaintiff-Appellant, v. STATE of New Jersey, DEPARTMENT OF COMMUNITY AFFAIRS, and New Jersey Council on Affordable Housing Defendants-Respondents In the Matter of the RULES PROMULGATED BY THE NEW JERSEY COUNCIL ON AFFORDABLE HOUSING N.J.A.C. 5:92-1.

Superior Court of New Jersey Appellate Division.

Argued Feb. 21, 1989.

Decided April 5, 1989.

Howard P. Shaw, for plaintiff-appellant Bernards Tp. (Schenck, Price, Smith & King, attorneys; James E. Davidson and Howard P. Shaw, Morristown, on the brief).

Ralph J. Kmiec, for plaintiff-appellant Cherry Hill Tp. (Ralph J. Kmiec, Cherry Hill, on the brief).

Geraldine Callahan, Deputy Atty. Gen., for defendants-respondents Dept. of Community Affairs and New Jersey Council on Affordable Housing (Peter N. Peretti, Jr., Atty. Gen., attorney; James J. Ciancia, Asst. Atty. Gen., of counsel; Geraldine Callahan and Donald M. Palombi, Deputy Attys. Gen., on the brief).

Before Judges DREIER, HAVEY and BROCHIN.

The opinion of the court was delivered by

DREIER, J.A.D.

The Township of Bernards [Bernards] and the Township of Cherry Hill [Cherry Hill] appeal from the promulgation of rules by the New Jersey Council on Affordable Housing [COAH]. See N.J.A.C. 5:92-1 thru 17.3. Both Bernards and Cherry Hill contest the validity of N.J.A.C. 5:92-6.1. Bernards also contests sections 8.4(c) and 8.5(f), but asserts that the objectionable portions of the rules may be deleted without detriment to the remaining rules. Cherry Hill argues against sections 8.3(a) and (b) as well as factors employed in the formula for determining a municipality's fair share of its region's low and moderate income housing. It further claims that those two rules and factors were adopted in violation of the Open Public Meetings Act, N.J.S.A. 10:4-6 et seq. As the two townships are contesting the same body of rules, we consolidated the oral argument in these cases, and further consolidate the appeals for the purpose of this opinion.

In 1975 and 1983 the New Jersey Supreme Court issued two landmark opinions in the area of low and moderate income housing: Southern Burlington Cty. N.A.A.C.P. v. Mount Laurel Tp., 67 N.J. 151, 336 A.2d 713 (1975), app. dism. and cert. den. 423 U.S. 808, 96 S.Ct. 18, 46 L.Ed.2d 28 (1975) [Mt. Laurel I ], and Southern Burlington Cty. N.A.A.C.P. v. Mount Laurel Tp., 92 N.J. 158, 456 A.2d 390 (1983) [Mt. Laurel II ]. In Mt. Laurel I the Court held that a developing municipality has a constitutional obligation to provide, by means of its land use ordinances, its "fair share" of housing for the low and moderate income citizens of its region. Mt. Laurel I, 67 N.J. at 174, 336 A.2d 713. Mt. Laurel II expanded the Mt. Laurel I decision, stating that this constitutional obligation meant not only that each municipality had to provide for the present need for such housing in its region, but also that all municipalities had to provide for the region's future need as well. Mt. Laurel II, 92 N.J. at 218-219, 456 A.2d 390. Remedies, including the "builder's" remedy, were established. Id. at 278-292, 456 A.2d 390. Mt. Laurel II also instituted a procedure by which claims against municipalities could be adjudicated before specially designated judges. Id. at 292-293, 456 A.2d 390.

In response to this judicial treatment, and at the direct invitation of the Court, 92 N.J. at 213, 456 A.2d 390, on July 2, 1985 the New Jersey Legislature adopted the Fair Housing Act [Act]. N.J.S.A. 52:27D-301 et seq. The Legislature's response explicitly acknowledged the court's deference to legislative treatment, N.J.S.A. 52:27D-302b. The Act's constitutionality was upheld in Hills Development Co. v. Bernards Tp., 103 N.J. 1, 25, 510 A.2d 621 (1986).

The Act established a Council on Affordable Housing to administer its provisions. N.J.S.A. 52:27D-305. COAH's purpose was, inter alia, to determine what constituted a municipality's "fair share" of low and moderate income housing. N.J.S.A. 52:27D-307. To that end COAH promulgated administrative regulations, codified at N.J.A.C. 5:92-1 et seq. These regulations define each region's total low and moderate income housing needs and the methodology for allocating this housing among the communities of the region. Plaintiffs in these two appeals are contesting the validity of some of those rules pursuant to R.2:2-3(a)(2).

All the issues in these cases require us to review COAH's exercise of its rule-making power. The standards for review of such rule-making are three-fold. First, if the rule is not arbitrary, capricious, unreasonable or irrational, it will be upheld. Bergen Pines v. New Jersey Dept. of Human Services, 96 N.J. 456, 477, 476 A.2d 784 (1984); In re Medicaid Long-Term Care Services Bulletin 84-2, 212 N.J.Super. 48, 57-58, 513 A.2d 967 (App.Div.1986), certif. den. 107 N.J. 31, 526 A.2d 125 (1986). Second, the rule must carry out the will of the legislature. Hotel Suburban System, Inc. v. Holderman, 42 N.J.Super. 84, 91, 125 A.2d 908 (App.Div.1956). The regulation must fall within the express or implied grant of power to the agency in the enabling legislation. A.A. Mastrangelo, Inc. v. Comm'r. Dept. of Envir. Protect., 90 N.J. 666, 683-684, 449 A.2d 516 (1982); Hills Development v. Bernards Tp., 229 N.J.Super 318, 340, 551 A.2d 547 (App.Div.1988). However, a specific grant of authority is to be liberally construed, In re Cable Television, 132 N.J.Super. 45, 48-49, 332 A.2d 209 (App.Div.1974), certif. den. 67 N.J. 95, 335 A.2d 47 (1975), unless there is reasonable doubt that the Legislature has vested the particular power in the administrative body. In re Jamesburg High School Closing, 83 N.J. 540, 549, 416 A.2d 896 (1980); Hills Development v. Bernards, supra, 229 N.J.Super. at 341, 551 A.2d 547. ¹ Third, the rule must be adopted as required by law. See N.J.S.A. 52:14B-4 (Administrative Procedure Act); 10:4-6 et seq. (Open Public Meetings Act).

There is a "strong" presumption, however, that a regulation is not arbitrary, and that it is legal and valid. Cooper River Convalescent Center v. Dougherty, 133 N.J.Super. 226, 232, 336 A.2d 35 (App.Div.1975). There is a further presumption that the regulation falls within the agency's specifically granted powers. In re New Jersey Bd. of Public Utilities, 200 N.J.Super. 544, 557, 491 A.2d 1295 (App.Div.1985). It is the plaintiff's burden to overcome these presumptions. Furthermore, this court must defer to a choice of procedures by an administrative agency to implement legislative policy "so long as the selection is responsive to the purpose and function of the agency." Radiological Soc. of New Jersey v. New Jersey Dept. of Health, 208 N.J.Super. 548, 560, 506 A.2d 755 (App.Div.1986), certif. den. 104 N.J. 444, 517 A.2d 434 (1986). With these principles in mind, we will examine the disputed sections.

I

N.J.A.C. 5:92-6.1 states that a municipality's present and future fair share of such housing will be determined "after crediting, on a one to one basis, [only] those housing units created or rehabilitated after April 1, 1980." N.J.A.C. 5:92-6.1(a). Both Bernards and Cherry Hill contend that section 6.1 of the COAH rules violates the express provision in the Fair Housing Act that the agency give each municipality a "credit[ ] on a one to one basis [for] each current unit of low and moderate income housing...." N.J.S.A. 52:27D-307(c)(1). The restriction to pre-April 1, 1980 units thus appears ultra vires on its face; but we must look beyond the language to the purpose of both the statute and regulation.

COAH claims that if units existing prior to April 1, 1980 are included in those for which credit is given, then those living units would be "double counted." COAH explains that by its method of determining the present need for low and moderate income housing, "present" need was determined by the figures in the 1980 census. If a low or moderate income family lived in a standard, conforming, housing unit at the time of the census, the family was not included in the "need" figures, nor was the pre-1980 housing unit counted as a resource to satisfy such a need. As those homes have already been counted by giving credit against the total number of low and moderate income families in the community, COAH argues, to count them again will falsely double their number.

The municipalities assert that the Legislature determined that it was important to "maximize the number of low and moderate income units" in New Jersey, and that a "timely achievement of an appropriate fair share of the regional need for law and moderate income housing" was desired. N.J.S.A. 52:27D-302f. Although the Legislature left to COAH the job of "[a]dopt[ing] criteria and guidelines" for determining a municipality's present and future fair share of the housing need, it gave COAH a specific direction concerning how such a determination must be made. N.J.S.A. 52:27D-307c. According to the Legislature, a municipal fair share "shall be determined after crediting on a one-to-one basis each current unit of low and moderate income housing of adequate standard...." N.J.S.A. 52:27D-307c(1) (emphasis added).

The municipalities reason that if at a time subsequent to 1980 the pre-1980 home becomes vacant through the relocation of the family who formerly resided in it, the unit is as available to satisfy the housing need of a current low or moderate income resident as any unit constructed or rehabilitated after the 1980 date. We are specifically asked to consider numerous units of senior citizen housing which become available after the death or relocation of the residents. We are further told that if we do not consider these units as available to satisfy the fair share of such communities, then the newly constructed housing would absorb the share determined by COAH, and the vacancies in the older housing would absorb low and moderate income families from...