Housing Compliance Update (1/3/25)

Message from Creigh Rahenkamp, Chair, APA New Jersey Housing Committee

As you’ve likely read, Judge Lougy, A.J.S.C., issued an Order Denying Plaintiffs’ Requests for Injunctive Relief in the Montvale et al. challenge. The challenge included arguments related to the constitutionality of assigning what are essentially COAH’s former executive branch functions to the judicial branch. The challenge also raised substantive arguments against using the Qualified Urban Aid exemption from proposition need. The Court’s decision largely rests on deference to the Legislature, the historic role of the courts in enforcing the doctrine, and the reality that the Program is an optional track given that municipalities are free to follow the existing declaratory judgment process or simply comply on their own and defend their efforts. Arguments on the State’s motion to dismiss are scheduled for January 31.

APA New Jersey has previously addressed two of the concerns expressed in the litigation. The Act tells us that we are to follow COAH’s rules unless modified by court decision as to all of the detailed compliance issues as if that were either clear enough or substantive enough given the evolution of the rules (which version?) and the need for changes and further evolution over time with no one seemingly in charge of the substantive rules. The wildly different approaches to VLA/RDP in the various vicinages should be enough to illustrate the point. We have asked whether the Program will engage in rulemaking. APA New Jersey also took the position that the Qualified Urban Aid listing was broken, and we supported substituting the DCA’s Municipal Revitalization Index as a superior tool. Mayor Fulop of Jersey City had also publicly invited an outcome that would include Jersey City within the pool of prospective need communities, resulting from using the more objective MRI standard. The equal protection argument in the Montvale case does not seem to be the route to address this issue, but it is still a sore point in the current doctrine.

APA New Jersey had urged for transparency, and now we have it, for good or ill. The use of vacant land as an allocation criterion has always been based on a largely inaccurate assessment that worked on an allocation level as long as the inaccuracies were generally well distributed. Now that it is very public, there will likely be a lot of arguments over the exact number for each town as towns argue to remove some lands and objectors argue to be added, and DCA has so far said that they will not be running new allocations as these numbers change town-by-town. 

After the second of our Housing Committee information sessions, which focused on vacant land analysis, a handful of practicing planners reached out to me to say that our panel got it wrong.

A longtime colleague urged me to read the new Act “as if I hadn’t been doing this all my life” – essentially to forget what words have meant in prior rounds and look at the Act with fresh eyes. Dan Hauben took on the job of writing up this argument in an email to me. I have copied it (with his permission) below to share this alternative view with the profession. The argument is elegant, and I share it to fulfill my responsibility to our members to get helpful information in their hands. Still, I do not endorse this interpretation personally. The point of the doctrine is actual compliance, and we have Toll and Garden State to remind us of what happens when following or interpreting rules takes us afield from that goal. As presented by our panel, seeking reasonable developable sites – regardless of current status – through the VLA/RDP analysis is consistent with the evolution of the practice through 3rd round practice, and I do not believe that the Legislature intended us to strike out on something new. 

Happy New Year and the Chapter looks forward to continuing these important housing related conversations with our members as we navigate the fourth round.

Creigh Rahenkmap

Dan Hauben, NJPP, AICP, LEED Green Associate, Senior Project Planner, DMR Architects

 

Short Version

  1. Based on the words used at 310.1, the analysis need only include land that is “vacant” and “available as defined at NJAC 5:93-1.3: Undeveloped and unused land area on a site with clear title and that is free of encumbrances which preclude development for low and moderate income housing. The exception to this rule is farmland/agricultural land, which the statute implicitly requires (310.1(e)). The analysis need not include “oversized” or “underused” properties like large single-family lots, underutilized parking lots on old shopping centers, golf courses, or other sites previously forced into vacant land inventories under NJAC 5:93-4.2(d).
  2. Once the list of sites meeting the criteria in step 1, above, is generated, sites or portions thereof can be removed from the analysis based upon the steps at 310.1 a through g of the amended FHA.
  3. COAH’s rules at NJAC 5:93-4.2 or 5:97-5.2 do not replace or expand upon 310.1 a through g. They can, however, be used to help planners identify things like suitable densities, the set-asides to assume when calculating the RDP, site “suitability”, and the types of environmental constraints that are regulated by NJDEP.
  4. A town seeking a vacant land adjustment need only plan for the greater of its RDP or 25% of its Prospective Need. In other words, a town with a 1,000 unit obligation and an RDP of 150 must plan for 250 units, but a town with a 1,000 unit cap and an RDP of 350 must plan for 350 units.

Long Version Interpretation

We should read and apply the 4th Round rules for Vacant Land Adjustments as though we have not just spent 9 to 31 years being directed to use COAH’s rules from 1993. The Fourth Round rules incorporated into the amended Fair Housing Act are intended to govern not just the Fourth Round but all future rounds; meaning that they will, hopefully, be the rules that guide future planners who did not have the (mis)fortune of planning for the First, Second, or Third Rounds of affordable housing. Amended Section 311(m) states that parties shall be “entitled to rely upon regulations on … adjustments … adopted by the Council on Affordable Housing unless those regulations are contradicted by statute.” The word “entitled” is key. It tells us that we may use COAH’s rules at NJAC 5:93-4.2 or 5:97-5.2 to fill in the blanks to provide guidance where the 4th Round Rules are lacking. We are not compelled to skip past the steps listed in 310.1 and instead defer to COAH’s 31-year-old rules, and, frankly, we shouldn’t.

The vacant land adjustment standards at NJSA 52:27D-310.1, as amended by the legislature this year, stand very well on their own. As flawed as the 4th Round Rules overall may be, it is my belief that the legislature deliberately tried to lay out a process that would not be slowed down by planners, developers, and interested parties debating over the application of COAH’s prior rules, so that towns to could expeditiously prepare and adopt compliant plans by June 30, 2024. The past 9 years have shown that COAH’s rules for vacant land adjustments would make the 6-month compliance window impossible to achieve. I am sure I’m not alone as having survived weeks and months of debates between towns, FSHC, Court Masters, and developers over what oversized/underused lands were required to be included in vacant land inventories by NJAC 5:93-4.2(d), for example.  The vacant land process at amended section 310.1 of the FHA requires us to look at land that is “vacant” and “available”. We can all agree on what those words mean because they are defined by COAH (see my shortened interpretation), and we are “entitled” to look to COAH for guidance on what that means. We cannot, however, all agree on how large a parking lot must be to be counted as oversized, or whether the backyard of a 2-acre residential lot can realistically be developed with affordable housing (actual examples of lands that came up in the Third Round). 

My strategy for conducting the vacant land analysis in the 4th Round is straightforward and does not require tedious, extensive analysis and consideration of whether a site that is developed and in use needs to generate an RDP. Someone reading the rules, without comparing them to the Prior Round rules, would only be able to challenge the vacant land analysis on facts – is the site in use or developed? Is it listed as protected open space? Is it legally available for development? Is a portion of it constrained by environmental features regulated by DEP? – or on the appropriateness of densities used in the analysis.

The same standard goes for the interpretation of the “25%” language at Section 310.1, which reads as follows: “Any municipality that receives an adjustment of its prospective need obligations for the fourth round or subsequent rounds based on a lack of vacant land shall as part of the process of adopting and implementing its housing element and fair share plan identify sufficient parcels likely to redevelop during the current round of obligations to address at least 25 percent of the prospective need obligation that has been adjusted, and adopt realistic zoning that allows for such adjusted obligation, or demonstrate why the municipality is unable to do so.” The language is extremely clear and requires no further interpretation. In adopting and implementing its plan, a municipality that has received an adjustment of its prospective need due to a lack of vacant land must prepare a plan that addresses a minimum of 25% of the prospective need. Period. We all know that the idea of “unmet need” was applied unequally across towns during the Third Round, with some towns being compelled to overzone beyond their unmet need requirement and others being let off gently. This rule sets a uniform policy for all vacant land towns. You must address whichever number is greater: your RDP or 25% of the prospective need. No unmet need.

I understand disagreement over the phrase “the prospective need obligation that has been adjusted.” The alternative interpretation you shared is that a vacant land town would be required to plan for its RDP plus 25% of its Unmet Need. Certainly no one would interpret “the prospective need obligation that has been adjusted” without any other context would interpret that as meaning “unmet need,” especially a planner in the 6th Round who has never had to worry about the idea of “unmet need.”

I understand that 311(m) “entitles” a developer or other challenger to cite COAH’s rules to challenge a vacant land analysis. And maybe they should. It should be the job of municipal planners to defend the interests of their clients and for the Affordable Housing Dispute Resolution Program to decide which parts of COAH’s rules should and should not be “canon.”