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Affordable Housing Compliance Alert
By John C. Gillespie on January 25, 2017

New Jersey Supreme Court Holds that Municipalities Must Address Affordable Housing Obligations Attributable to the Gap Period (1999 to 2015)

On Wednesday, January 18, 2017, the New Jersey Supreme Court determined that the calculation of “present” affordable housing need must include a municipal housing assignment for the 16-year so-called “gap” period from 1999 to 2015 during which time the New Jersey Council on Affordable Housing (COAH) failed to adopt legally valid “Third Round” rules and housing assignments.  The Court affirmed the July 11, 2016 ruling on this issue by the Appellate Division, but modified that ruling to require trial courts which endeavor to determine municipal fair share obligations for the Third Round “. . . must employ an expanded definition of present need.”

With this new guidance from the Court, we anticipate that it will take time and analysis to determine each municipality’s obligations during the gap period. Specifically, the new present need analysis must (1) include, in addition to a calculation of overcrowded and deficient housing units, an analytic component that addresses the affordable housing needs of “presently existing  low- and moderate-income households formed during the gap period” and are entitled to their delayed opportunity to seek affordable housing; and (2) ensure that present need is not calculated in a way that includes persons now deceased, are income ineligible, or otherwise are no longer entitled to affordable housing, or “whose households may be already captured through the historic practice of assessing deficient housing units within the municipality.” 

Present need was previously calculated by COAH during Rounds One and Two based upon a survey of overcrowded and deficient housing units that existed at the time that the calculation was performed.  The recalculation of present need that will now be required by trial courts could potentially expand the number of low and moderate income households included in the calculation.  (This will ultimately need to be determined on a case by case basis by looking at the demographics of each municipality.)

This means that the courts are closer to determining Third Round affordable housing obligations.  In light of the Court’s decision, it is believed that the Third Round fair share calculations that have been submitted to the courts by the municipalities involved in the Third Round Declaratory Judgment proceedings pending throughout New Jersey, will have to be revised by the experts to address the Supreme Court’s expanded definition of “present need,” in establishing municipal Third Round fair share obligations. 

With this decision, the trial courts now have clearer guidance to establish the Third Round fair share obligations of municipalities across the State.  This will ultimately facilitate the resolution of the pending declaratory judgment lawsuits

Our office will continue to work with municipalities in order to evaluate their gap period obligations in light of this recent guidance from the Court. We are also closely monitoring the affordable housing “numbers” trial which is presently taking place in Mercer County before Judge Mary Jacobson.

Please feel free to contact the affordable housing practitioners in our office should you have any questions with regard to the Court’s decision or its impact upon your municipal fair share obligations in the Third Round. 

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