NJ Affordable Housing, COAH, and the Municipal Fair Share

Timeline of Events

1975 – Mount Laurel I

In 1975, the New Jersey Supreme Court ruled that each municipality has a constitutional obligation to provide a realistic opportunity for the construction of their fair share of affordable housing. A realistic opportunity does not mean that that a municipality needs to build affordable housing, but rather that their planning, zoning, and land use regulations must not act in a way that would prohibit affordable housing from being built. This is otherwise known as "exclusionary zoning."

1983 – Mount Laurel II

In 1983, the New Jersey Supreme Court again addressed the issue of affordable housing, and as a result, created the “builder’s remedy” suit. The purpose of the builder’s remedy is to encourage builders to commence litigation against municipalities to defend the constitutional rights of low- and moderate-income households in return for having their properties rezoned for high density multi-family housing which contain an affordable housing element. This is known as “inclusionary zoning."

1985

In 1985, in response to the Mount Laurel decisions, lawmakers enacted the Fair Housing Act (FHA). 

The FHA provided an alternative administrative process which municipalities could elect to participate in. To oversee this administrative process the FHA created the Council on Affordable Housing (COAH). One purpose of COAH is to review a municipality's affordable housing plan and provide "substantive certification" to those plans that would provide a realistic opportunity for the construction of affordable housing within the municipality. 

Any municipality that received substantive certification would be shielded from the costly court process of a builder's remedy suit. 

COAH is also responsible for developing regulations and creating criteria related to each municipality's affordable housing obligation. Using its rulemaking authority COAH was meant to determine and assign a municipality's affordable housing obligation.

1986 – 2014

Throughout this period of time, COAH undertakes three rounds of rulemaking to establish a formula meant to set each municipality’s affordable housing obligation.

1. First Round (1987): COAH adopts regulations for First Round Obligations applicable from 1987 to 1993.
2. Second Round (1994): COAH adopts regulations recalculating a portion of the First Round obligation for each municipality, and computes the additional municipal affordable housing need for 1993 to 1999.
3. Third Round
   • First Iteration (2004): The first version of COAH’s Third Round rules became effective five years after the end of the Second Round in 1999. At that time the Third Round period was to cover the years 1999 to 2014. However, these rules were challenged, and in January of 2007, the Appellate Division issued a decision requiring COAH to revise its rules.
   • Second Iteration (2008): COAH adopted amended Third Round rules, but these too were challenged. In 2010, the Appellate Division again issued a decision invalidating the second iteration of COAH’s rules. In 2013, the NJ Supreme Court affirmed the Appellate Division decision, causing COAH to undertake new rulemaking.
   • Third Iteration: Draft amended rules were promulgated, but never formally adopted by COAH. In March of 2015, the NJ Supreme Court declared COAH moribund  and ordered the courts to resume their role as the forum of first resort for evaluating municipal compliance with affordable housing obligations.

The process today

While COAH still exists, it has been effectively disbanded through legislative and administrative inaction to appoint members as required by the FHA. 

Today, municipalities must go through the process created by the court and overseen by a court appointed special master to obtain the functional equivalent of Substantive Certification, and to be protected from builder’s remedy suits.

The court process includes:

1. Filing a Declaratory Judgment action with the court to declare the municipality’s housing element and fair share plan constitutionally compliant.
2. Negotiations between the municipality, Fair Share Housing Center, and other intervenors (typically builders or developers) to reach a settlement agreement.
3. The Special Master would then make a report to the judge, to which the judge can order an updated housing element and fair share plan.
4. The housing element and fair share plan would then be adopted by the municipal planning board and endorsed by the governing body.
5. The court would then issue a judgement of compliance and repose.