In re Complaint filed by the Township of Medford (8-08).

HEARING AND RULING.  On March 18, 2009, the Council heard oral argument on cross-motions for summary judgment filed by Claimant and Respondents, as directed by the Council in its December 17 letter. 

Participating in the oral argument were Claimant Medford Township, Respondents State of New Jersey and Council on Affordable Housing (COAH), and amici curiae Fair Share Housing Center, Mount Laurel Township, the New Jersey Department of the Public Advocate, and the New Jersey State League of Municipalities.

After oral argument, the Council recessed to deliberate, and the Council Chair announced the Council's decision: that the challenged statutes and regulations come within the constitutional exemption for statutes and regulations that "implement the provisions of [the New Jersey] Constitution," and that Respondents' motion for summary judgment is granted.  The Council's written opinion, which will follow in due course, will be posted on this site as soon as possible after it is issued.

PROCEDURAL HISTORY.

Complaint filed.  On August 15, 2008, a Complaint was filed with the Council on behalf of the Township of Medford, which alleges that COAH Third Round Regulations and recent amendments to the Fair Housing Act (P.L. 2008, c.46) impose unfunded mandates, in violation of the "State Mandate, State Pay" Amendment to the New Jersey Constitution.

A summary of the Medford Complaint may be accessed under Pleading Summaries.

On August 25, 2008, the Council recieved a letter from the Fair Share Housing Center (FSHC) regarding the Medford Complaint, which requested that FSHC be named as a respondent in the matter.

Council publication.  The Council reviewed the Medford Complaint and determined that it should be served on the Attorney General and on the other officials listed in Rule 9(a) of the Council's Rules of Procedure.  By letter dated September 12, 2008, the Council circulated the Complaint to said officials and further advised that it would set up a pleading schedule for a required Answer by the Attorney General, and for Answers by any other State officials, who choose to file as Respondents, after receipt of the following from the Claimant Township of Medford:

• a Statement identifying the specific regulation(s) and statutory provision(s) that are claimed to be unfunded mandates, each followed by a brief statement of the estimated costs to Claimant related to the alleged mandate; and
• a Statement in support of the injunctive relief requested in the Complaint.

The Council directed the Claimant to file the above supplemental Statements on or before September 26, 2008.

In the same letter, the Council addressed FSHC's letter request, and advised that it had determined that, because FSHC is not a governmental entity or agency, FSHC's involvement should be as amicus curiae, not as a Respondent and that the Council considers FSHC's letter as a Request to Appear in that capacity and has granted that Request.

The Council further advised that it would provide FSHC and other organizations with additional information on the type of briefs or other written documentation to be required under Council Rule 7(b)(iii), after Council review of the Claimant's supplemental Statements.

Claimant's Supplemental Statements.  By letter dated September 26, the Council agreed to extend the date for Medford to file its supplemental Statements to September 29, 2008.  The Claimant filed its response to the Council's direction on September 29, by way of a four-page letter with four Exhibits.

In the letter, among other things, Claimant refers to revised regulations adopted by COAH on September 22, 2008 and states:  "Those regulations are expected to become effective when published in the New Jersey Register on or about October 20, 2008.  At that time, Medford Township anticipates filing a new Complaint with the Council on Local Mandates, based on those revised third round rules."  Letter dated September 29, 2008, at 1.

Copies of the full four-page response (as subsequently revised) and of most Exhibits will be made available to interested persons and organizations.  To request a copy of the letter or exhibits, please contact the Council office as described under Address & Telephone.

Order Staying Proceedings.  In an Order dated October 20, 2008, circulated to State Officials and others by letter of the same date, the Council took note of the Claimant's advice in its September 29 letter that it intended to file a new complaint challenging COAH regulations to become effective on or about October 20 ("October COAH regulations").

In its Order, the Council stayed all proceedings on the August 15 Complaint and, among other things, ordered that Claimant shall either, within 30 days of the effective date of the October COAH regulations: (1) file a new complaint in the form required by Council rules and detailing the anticipated direct expenditures resulting from the regulations, together with a request to consolidate that complaint with the pending complaint; or (2) advise the Council in writing that it will not file an additional complaint.

October 30 filing.  On October 30, 2008, Claimant Township of Medford filed a "Complaint and attachments seeking a declaration that COAH's Third Round Rules and recent amendments to the Fair Housing Act, as applied to Medford Township, create an Unfunded Mandate requiring municipal expenditures in violation of the Mount Laurel Doctrine."  Cover letter from Richard W. Hunt, to Council Chair, dated October 30, 2008.

In the October 30 cover letter, Claimant "requests that this Complaint be consolidated with the pending Complaint and submissions initially filed on August 15, 2008."  Claimant's summary of its October 30 filing may be viewed under Pleading Summaries.  To request a copy of the filing, please contact the Council office as described under Address & Telephone.

December 17 Council Letter.  On December 17, 2008, the Council circulated a letter to State Officials, Claimant and others, by which the Council advised that it had reviewed the Claimant's October 30 filing and entered certain directives, summarized below:

• Claimant's request for consolidation of the October 30 Complaint with the earlier Complaint is granted;
• The Attorney General is to file an Answer on behalf of the State and COAH, as Respondent, on or before January 6, 2009;
• Any other State Official who chooses to do so may also file an Answer to the Complaint by the same date;
• Claimant and Respondent(s) are to file simultaneous cross-motions for summary judgment, with supporting briefs, on two issues, summarized below:
  • In view of the Mount Laurel doctrine, whether cited provisions of the Fair Housing Act amendments and COAH's revised Third Round Regulations fall within an exemption to the Council's authority because they "implement the provisions of [the State] Constitution;" and
  • Whether the cited provisions impose direct unfunded mandates as opposed to speculative obligations;
• Initial motions and briefs on the above two issues are due on January 21, 2009 and responsive briefs on February 6, 2009;
• Amicus FSHC may file initial and responsive briefs on the two issues;
• Requests to Appear as Amici curiae must be filed by January 16, and any Claimant or Respondent objection is due by January 21, 2009; and
• Those whose requests to appear are granted may file responsive briefs on the two enumerated issues by the February 6 deadline.

In the same letter, the Council advised that it anticipated a hearing in February 2009 on the issues to be briefed, and provided information regarding plans for electronic filing and service of the January 21 and February 6 motions and briefs.

To request a copy of the Council's December 17 letter, please contact the Council office as described under Address & Telephone.

Answer filed.  On January 6, 2009, the Attorney General filed an Answer in this matter on behalf of the State of New Jersey and the New Jersey Council on Affordable Housing ("COAH") as Respondents.  To view a summary of the filed Answer, please consult Pleading Summaries.

Filing by Mount Laurel Township.  On January 14, 2009, a Complaint and, in the alternative, a request to participate as amicus in this matter was filed on behalf of Mount Laurel Township.  A summary of this pleading is available under Pleading Summaries.

Requests to Appear.  On January 16, 2009, Requests to Appear as amici curiae, in this matter were filed on behalf of the N.J. Department of the Public Advocate, and by the New Jersey State League of Municipalities.  To access summaries of those pleadings, please use the following links:

• Request by the N.J. Department of the Public Advocate.
• Request by the New Jersey State League of Municipalities.

Extension approved.  On Wednesday, January 21, the Council granted a two-day extension of the deadlines for filing of the summary judgment motions and supporting briefs and for any Claimant and Respondent objection to requests to appear as amici curiae.  Those pleadings then became due on Friday, January 23, 2009.  The deadline for responsive briefs on those same motions also was extended -- from Friday, February 6, to Tuesday, February 10.

Motions and Briefs filed.  On Friday, January 23, cross-motions and supporting briefs on the issues identified in the Council's December 17, 2008 letter were filed on behalf of Claimant and Respondents.  Amicus Fair Share Housing Center (FSHC) filed a brief in support of summary judgment against Claimant.  To access summaries of the filed legal arguments, please use the following links:

• Claimant Township of Medford.
• Respondents State of New Jersey and Council on Affordable Housing (COAH).
• Amicus curiae FSHC.

Amici curiae requests granted.  By letter dated January 29, 2009, the Council advised that it had reviewed and granted the Requests to Appear as amici curiae, including the request in the alternative filed on behalf of Mount Laurel Township, and the Requests filed on behalf of the N.J. Department of the Public Advocate and the New Jersey State League of Municipalities.  The Council further advised that the amici may submit briefs in support of or opposition to the cross motions of Claimant and Respondents by the February 10, 2009 due date, and that amici filing timely briefs may present oral argument on the Summary Judgment motions.

In the same January 29 letter, the Council stated that it would apprise the parties and amici of the date scheduled for oral argument and that it reserved decision on the extent of amici participation with respect to any further proceedings that may ensue.

Extension approved.  On Monday, February 9, the Council granted a one-day extension of the deadline for filing of responsive briefs and briefs in support of or opposition to the cross motions of the Claimant and Respondents. Therefore, the deadline for the briefs by the parties and amici was moved to Wednesday, February 11.

Additional briefs filed.  On Wednesday February 11, 2009, reply briefs were filed in this matter on behalf of Claimant Township of Medford and Respondents State of New Jersey and COAH. Briefs in support of or opposition to the parties' cross motions also were filed on behalf of all four amici curiae. The following links provide access to summaries of the filed briefs:

• Claimant Township of Medford.
• Respondents State of New Jersey and Council on Affordable Housing (COAH).
• Amicus Fair Share Housing Center (FSHC).
• Amicus Mount Laurel Township.
• Amicus N.J. Department of the Public Advocate.
• Amicus NJ State League of Municipalities.

Hearing date scheduled.  On Wednesday, February 18, 2009, the Council advised the parties and amici curiae of the hearing date for oral argument on the cross motions for Summary Judgment: 11 a.m., on Wednesday, March 18, 2009.  The hearing is to take place in Committee Room 16 (4th floor) at the State House Annex in Trenton.

PLEADING SUMMARIES.

This portion of the site reproduces summaries of filed pleadings, written by the filing parties, beginning with the filed Complaint.  The summaries do not represent the views of the Council; they are provided to facilitate understanding of the positions reflected in the pleadings.

Complete copies of all filed pleadings may be obtained by contacting the Council office as described under Address & Telephone.

Claimant Medford Township's Summary of Complaint:

The Mount Laurel doctrine, as interpreted by our courts, requires only that muncipalities zone for affordable housing, not that they pay for it.  As recently stated by the Appellate Division: "Municipalities need not guarantee that the required amount of affordable housing will be built, but must only adopt land use ordinances that create a realistic opportunity to meet the regional need and their own rehabilitation share."  In re Adoption of N.J.A.C. 5:94, 390 N.J. Super. 1, 54 (App. Div. 2007).  In addition, the Fair Housing Act provides that nothing therein "shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing."  N.J.S.A. 52:27D-311(d).  There is no mandate for municipalities "to expend their own resources to help provide" affordable housing.  N.J.S.A. 52:27D-302(h).  Set forth below are the primary reasons why A-500 and the adopted and proposed COAH regulations contravene the principles and will compel municipalities to utilize taxpayer funds to plan for and produce affordable housing, which imposes an unfunded mandate in violation of Article VIII, Section 2, paragraph 5, of the New Jersey Constitution.

• A-500, combined with COAH's growth share regulations, creates a potential unfunded municipal liablity of in excess of $6 billion dollars. Based on erroneous fair share obligations generated by inaccurate vacant land calculations.
• For the first time, the Legislature has required that municipal fair share plans ensure that at least 13% of the affordable housing units be made available for occupancy by very low income households. The Legislature has not authorized or appropriated any funds to meet that obligation.
• Municipalities must bond to ensure adequate funding to subsidize the cost of providing affordable units.
• COAH regulations require the preparation of very expensive housing elements and fair share plans without providing a source of funding.

A-500, combined with the COAH regulations, impose a significant financial burden on a municipality and its taxpayers for which no State funding is available.  It was never contemplated that local taxpayers should fund the cost of planning for and producing affordable housing.

Set forth below are the primary reasons that A-500 and the adopted and proposed COAH regulations will compel municipalities to utilize taxpayer funds to plan for and produce affordable housing, which imposes an unfunded mandate in violation of Article VIII, Section 2, paragraph 5, of the New Jersey Constitution.  The Mount Laurel doctrine, as interpreted by our courts, requires only that municipalities zone for affordable housing, not that they pay for it.  As recently stated by the Appellate Division: "Municipalities need not guarantee that the required amount of affordable housing will be built, but must only adopt land use ordinances that create a realistic opportunity to meet the regional need and their own rehabilitation share."  In re Adoption of N.J.A.C. 5:94, 390 N.J. Super. 1, 54 (App. Div. 2007).  In addition, the Fair Housing Act provides that nothing therein "shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing."  N.J.S.A. 52:27D-311(d).  There is no mandate for municipalities "to expend their own resources to help provide" affordable housing.  N.J.S.A. 52:27D-302(h).  As cited regulations and legislation will generate unfunded mandates as follows:

• A-500, combined with COAH's growth share regulations, creates a potential unfunded municipal liability of in excess of $6 billion dollars. Based on erroneous fair share obligations generated by inaccurate vacant land evaluations. COAH estimates a State-wide affordable housing need of 115,000 units. Of that, 50,000 units are attributable to non-residential development. COAH calculates that it will cost approximately $160,000 to produce an affordable unit, for a total cost of $8 billion. The COAH regulations allowed municipalities to pass on that cost through the payment in lieu mechanism. But A-500 removes that option; non-residential development need only pay a fee of 2.5% of the equalized assessed value. State-wide, that is expected to yield at most between $1.63 billion and $2 billion over the next ten years.
• For the first time, the Legislature has required that municipal fair share plans ensure that at least 13% of the affordable housing units be made available for occupancy by very low income households. The Legislature has not authorized or appropriated any funds to meet that obligation. A very low income household of 4 makes less than $20,000 per year in Region 5, which includes Burlington, Camden and Gloucester Counties. A 2-bedroom home would have to sell for $45,000 or less. A 2-bedroom apartment could not rent for any more than $500 per month, including utilities. Municipalities and/or developers cannot produce housing at such deep subsidies without financial assistance. None is provided.
• Municipalities must bond to ensure adequate funding to subsidize the cost of providing affordable units. Historically, most of the affordable housing in this State has been produced by inclusionary development, under which a developer would produce affordable units at its own expense. Municipalities would make the opportunity "realistic" by zoning for increased densities, ranging from 4 units per acre to 10 units per acre. No taxpayer funds were required to produce the subsidy. But the State is running out of vacant developable land, and there is insufficient sewer capacity and land in Medford to support inclusionary development. Thus, Medford must resort to other mechanisms to satisfy its fair share. Those mechanisms, such as municipally-sponsored 100% affordable developments, the "market-to-affordable" (buy-down) program, supportive and special needs housing (group homes), and assisted living residences all require a municipal resolution either appropriating taxpayer money or municipal bonding to cover the cost of those units in the event that funding from other sources is not available. See, e.g., N.J.A.C. 5:97-6.7(d)(6)(ii)(municipally sponsored); N.J.A.C. 5:97-6.9(d)(5)(market to affordable); N.J.A.C. 5:97-6.10(e)(8)(group homes); N.J.A.C. 5:97-6-11(d)(8)(assisted living). Medford knows from its experience with the MEND tax credit application that funding from outside sources, such as State or Federal housing programs, is in very short supply. Moreover, Medford has limited funds in its trust fund account with which to pay for affordable housing. Thus, the burden falls on the taxpayers and is clearly an unfunded mandate.
• COAH regulations require the preparation of very expensive housing elements and fair share plans without providing a source of funding. Medford must have spent hundreds of thousands of dollars over the past two or three years in preparing fair share plans and negotiating developer's agreements to produce affordable housing. Those expenses include not only fees paid to outside attorneys, planners and engineers, but also the time spent by municipal employees in addressing the Mount Laurel obligation. Moreover, COAH and HMFA regulations not only require that a municipal employee be designated as the COAH housing liaison, but also the municipalities retain an outside consultant as an administrative agent to implement fair share plans. Twenty percent (20%) of the amount in the affordable housing trust fund can be utilized for these expenses, but in towns, like Medford, that have a limited amount of money in the trust fund account, the taxpayers will have to make up the difference.

A-500, combined with the COAH regulations, impose a significant financial burden on a municipality and its taxpayers for which no State funding is available.  It was never contemplated that local taxpayers should fund the cost of planning for and producing affordable housing.

The above summary is a quotation from the Complaint filed on August 15, 2008, by Richard W. Hunt, Township Solicitor, on behalf of Claimant Medford Township.

Claimant Medford Township's Summary of October 30 Complaint filing:

The Mount Laurel doctrine, as interpreted by our courts, requires only that muncipalities zone for affordable housing, not that they pay for it.  As recently stated by the Appellate Division: "Municipalities need not guarantee that the required amount of affordable housing will be built, but must only adopt land use ordinances that create a realistic opportunity to meet the regional need and their own rehabilitation share."  In re Adoption of N.J.A.C. 5:94, 390 N.J. Super. 1, 54 (App. Div. 2007).  In addition, the Fair Share Housing Act provides that nothing therein "Shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing."  N.J.S.A. 52:27D-311(d).  There is no mandate for municipalities "to expend their own resources to help provide" affordable housing.  N.J.S.A. 52:27D-302(h).  Set forth below are the primary reasons why A-500 and the adopted COAH regulations contravene the principles and will compel municipalities to utilize taxpayer funds to plan for and produce affordable housing, which imposes an unfunded mandate in violation of Article VIII, Section 2, paragraph 5 of the New Jersey Constitution.

• A-500, combined with COAH's growth share regulations, creates a potential unfunded municipal liablity of in excess of $6 billion dollars. Based on erroneous fair share obligations generated by inaccurate vacant land calculations.
• For the first time, the Legislature has required that municipal fair share plans ensure that at least 13% of the affordable housing units be made available for occupancy by very low income households. The Legislature has not authorized or appropriated any funds to meet that obligation.
• Municipalities must bond to ensure adequate funding to subsidize the cost of providing affordable units.
• COAH regulations require the preparation of very expensive housing elements and fair share plans without providing a source of funding.

A-500, combined with the COAH regulations, impose a significant financial burden on a municipality and its taxpayers for which no State funding is available.  It was never contemplated that local taxpayers should fund the cost of planning for and producing affordable housing.

Set forth below are the primary reasons that A-500 and the adopted COAH regulations will compel municipalities to utilize taxpayer funds to plan for and produce affordable housing, which imposes an unfunded mandate in violation of Article VIII, Section 2, paragraph 5, of the New Jersey Constitution.  The Mount Laurel doctrine, as interpreted by our courts, requires only that municipalities zone for affordable housing, not that they pay for it.  As recently stated by the Appellate Division: "Municipalities need not guarantee that the required amount of affordable housing will be built, but must only adopt land use ordinances that create a realistic opportunity to meet the regional need and their own rehabilitation share."  In re Adoption of N.J.A.C. 5:94, 390 N.J. Super. 1,54 (App. Div. 2007).  In addition, the Fair Housing Act provides that nothing therein "shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing."  N.J.S.A. 52:27D-311(d).  There is no mandate for municipalities "to expend their own resources to help provide" affordable housing.  N.J.S.A. 52:270-302(h).  As cited regulations and legislation will generate unfunded mandates as follows:

• A-500, combined with COAH's growth share regulations, creates a potential unfunded municipal liability of in excess of $6 billion dollars. Based on erroneous fair share obligations generated by inaccurate vacant land evaluations. COAH estimates a State-wide affordable housing need of 115,000 units. Of that, 50,000 units are attributable to non-residential development. COAH calculates that it will cost approximately $160,000 to produce an affordable unit, for a total cost of $8 billion. The COAH regulations allowed municipalities to pass on that cost through the payment in lieu mechanism. But A-500 removes that option; non-residential development need only pay a fee of 2.5% of the equalized assessed value. State-wide, that is expected to yield at most between $1.63 billion and $2 billion over the next ten years.
• For the first time, the Legislature has required that municipal fair share plans ensure that at least 13% of the affordable housing units be made available for occupancy by very low income households. The Legislature has not authorized or appropriated any funds to meet that obligation. A very low income household of 4 makes less than $20,000 per year in Region 5, which includes Burlington, Camden and Gloucester Counties. A 2-bedroom home would have to sell for $45,000 or less. A 2-bedroom apartment could not rent for any more than $500 per month, including utilities. Municipalities and/or developers cannot produce housing at such deep subsidies without financial assistance. None is provided.
• Municipalities must bond to ensure adequate funding to subsidize the cost of providing affordable units. Historically, most of the affordable housing in this State has been produced by inclusionary development, under which a developer would produce affordable units at its own expense. Municipalities would make the opportunity "realistic" by zoning for increased densities, ranging from 4 units per acre to 10 units per acre. No taxpayer funds were required to produce the subsidy. But the State is running out of vacant developable land, and there is insufficient sewer capacity and land in Medford to support inclusionary development. Thus, Medford must resort to other mechanisms to satisfy its fair share. Those mechanisms, such as municipally-sponsored 100% affordable developments, the "market-to-affordable" (buy-down) program, supportive and special needs housing (group homes), and assisted living residences all require a municipal resolution either appropriating taxpayer money or municipal bonding to cover the cost of those units in the event that funding from other sources is not available. See, e.g., N.J.A.C. 5:97-6.7(d)(6)(ii)(municipally sponsored); N.J.A.C. 5:97-6.9(d)(5)(market to affordable); N.J.A.C. 5:97-6.10(e)(8)(group homes); N.J.A.C. 5:97-6-11(d)(8)(assisted living). Medford knows from its experience with the MEND tax credit application that funding from outside sources, such as State or Federal housing programs, is in very short supply. Moreover, Medford has limited funds in its trust fund account with which to pay for affordable housing. Thus, the burden falls on the taxpayers and is clearly an unfunded mandate.
• COAH regulations require the preparation of very expensive housing elements and fair share plans without providing a source of funding. Medford must have spent hundreds of thousands of dollars over the past two or three years in preparing fair share plans and negotiating developer's agreements to produce affordable housing. Those expenses include not only fees paid to outside attorneys, planners and engineers, but also the time spent by municipal employees in addressing the Mount Laurel obligation. Moreover, COAH and HMFA regulations not only require that a municipal employee be designated as the COAH housing liaison, but also the municipalities retain an outside consultant as an administrative agent to implement fair share plans. Twenty percent (20%) of the amount in the affordable housing trust fund can be utilized for these expenses, but in towns, like Medford, that have a limited amount of money in the trust fund account, the taxpayers will have to make up the difference.

A-500, combined with the COAH regulations, impose a significant financial burden on a municipality and its taxpayers for which no State funding is available.  It was never contemplated that local taxpayers should fund the cost of planning for and producing affordable housing.

The above summary is a quotation from the Claimant's October 30 Complaint filing, by Richard W. Hunt, Township Solicitor, on behalf of Claimant Medford Township.

Summary of Answer filed on behalf of the State of New Jersey and COAH:

COAH's regulations and the New Jersey Fair Housing Act ("FHA"), as amended by A500, is not an unfunded mandate.  Both the FHA and its implementing regulations by COAH are carrying out the constitutional mandates as set forth in the New Jersey Supreme Court's Mount Laurel doctrine.  See Burlington County, N.A.A.C.P. v. Mount Laurel, 67 N.J. 151 (1975)  (Mount Laurel I) and Southern Burlington County N.A.A.C.P. v. Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II).  Accordingly, the FHA and COAH regulations are exempt from consideration by the Council on Local Mandates pursuant to Article VIII, Section II, ¶5(c)(5) of the New Jersey Constitution.

Moreover, participation in the certificaion process established by the FHA and implemented by COAH is voluntary.  No municipality is required to submit a petition to COAH seeking substantive certificaion of a municipal affordable housing plan.  Thus, no mandate is involved.

Furthermore, the FHA explicitly provides that nothing in the Act "shall require a municipality to raise or spend municipal revenues in order to provide low and moderate income housing."   N.J.S.A. 52:27D-311(a)(9)(d).  Requirements for low and moderate income housing, including the new requirement that 13 percent of a municipality's affordable housing be reserved for very low income households, can be met through the numerous techniques available to municipalities, including increased zoning densities.  While municipalities may prepare plans that do include municipal expenditure of funds for affordable housing, that is the choice of a municipality and not a requirement of either the Fair Housing Act or COAH's regulations.  Therefore, the FHA and implementing regulations do not constitute an unfunded mandate.

The above summary is a quotation from the Answer Information Sheet filed on January 6, 2009, by George N. Cohen, Deputy Attorney General, on behalf of Respondents State of New Jersey and COAH.

Summary of Complaint/Request to Appear filed on behalf of Mount Laurel Township.

Mount Laurel reincorporates the same arguments as Medford Township in its Complaint with the Council on Local Mandates as if set forth at length herein, with the exception that Mount Laurel does not aver that it will be required to expend funds to expand a municipal sewer plant to meet its affordable housing obligation as Medford does.

In addition, Mount Laurel's Complaint is distinguished from Medford's Complaint based on the following:

Mount Laurel Township avers that its Fair Share Number of 1,420 affordable housing units under the revised 3rd Round COAH cannot be accomodated within the remaining vacant and undeveloped lands of this existing and largely built-out suburban municipality.

The only COAH compliance mechanism that does not require the expenditures of funds by Mount Laurel Township (and a concomitant increase in property taxes) is inclusionary development.  There are insufficient vacant lands in suburban Mount Laurel Township to meet its Fair Share Number of 1,420 affordable housing units through inclusionary development utilizing applicable COAH density requirements.  Moreover, in So. Burlington Cty. N.A.A.C.P. v. Mount Laurel Tp., 92 N.J. 158, 219-220 (1983)(Mount Laurel II), our New Jersey Supreme Court declared that the New Jersey Constitution does not require any municipality to lose or surrender its "suburban character" in order to meet its affordable housing obligation.  In Mount Laurel II, the Supreme Court explicitly declared that Mount Laurel need not "be paved over and covered with high-rise apartments as a result of today's decision." Id. at 219.

In addition, Mount Laurel does not have sufficient funds in its existing Affordable Housing Trust Fund to implement other COAH compliance mechanisms that would compensate or make up for the lack of available vacant lands in order to meet its Fair Share Number of 1,420 affordable housing units through inclusionary zoning.  The Council should note that COAH has determined by regulation that $160,000 currently represent the appropriate subsidy necessary to deed restrict the sales price of an affordable housing unit in New Jersey.

Consequently, for Mount Laurel Township to develop a Third-Round COAH Compliance Plan (which Mount Laurel must file in the Superior Court, Burlington County by December 7, 2009, pursuant to a December 22, 2008 Court Order), it will be required to implement other permitted COAH compliance mechanisms that will require the expenditure of funds through increased property taxes.  By way of example, Mount Laurel, as a practical matter to meeting its 1,420 affordable housing unit obligation in a nearly built out municipality, will be compelled to consider the option of 100% affordable housing projects, which, again, as a practical matter, must constructed by the Township or heavily subsidized by the Township, through loan/grant funding, to allow for such construction by a non-profit Mount Laurel developer.  Such projects would require the Township of Mount Laurel to incur expenses related land acquistion, development approvals, closing costs and construction.

The above summary is a quotation from the Complaint/Request to Appear filed on January 14, 2009, by Christopher Norman, Township Solicitor, on behalf of Mount Laurel Township.

Summary of Request to Appear filed on behalf of the NJ Department of the Public Advocate.

Before determining whether the actions contemplated by the Third Round COAH Regulations or the Fair Housing Act amendments (A500) are "unfunded," it is logically necessary to determine whether they constitute a "mandate."  Because participation in the COAH process is completely voluntary on the part of a municipality, the rules promulgated by COAH cannot constitute a "mandate."  And to the extent that the provisions of A500 merely predicate participation in a state-funded program upon compliance with certain conditions, it too does not impose a mandate, but merely offers the municipality a choice of whether or not to participate in that program.  Thus, in answer to the Council's inquiry as to "[w]hether the cited provisions impose direct unfunded mandates as opposed to speculative obligations," the Public Advocate believes that the imposition placed on municipalities by the challenged provisions are not only speculative, but in fact are not "obligations" at all.

Moreover, in construing its jurisdiction, the Council should be mindful of the exclusive role of the courts in exercising the judicial function, an in particular in defining those obligations "which implement the provisions of this Constitution."  Given the long and intimate involvement of the courts in determining whether the Third Round COAH Regulations comply with the constitutional Mt. Laurel doctrine, and the complementary power of the executive and legislative branches of government to craft appropriate remedies to address constitutional requirements, this Council should avoid extending its jurisdiction in a way that conflicts with the judicial or political functions vested in one of the three traditional branches of government.  The Public Advocate therefore contends, in response to the Council's inquiry, that the "revised Third Round COAH Regulations...and recent amendments to the Fair Housing Act...are exempt from Council action because they 'implement the provisions of [the New Jersey] Constitution.'''

The above summary is a quotation from the Request to Appear filed on January 16, 2009, by Ronald K. Chen, Public Advocate, on behalf of the NJ Department of the Public Advocate.

Summary of Request to Appear filed on behalf of the New Jersey State League of Municipalities.

The matter raised by the Township of Medford concerning the New Jersey Council on Affordable Housing ("COAH") Third Round Regulation creating an unfunded mandate on municipalities is an issue of Statewide concern to the over five hundred sixty (560) New Jersey municipalities who are members of the NJLM.  In the context of the pending New Jersey Superior Court Appellate Division appeal involving the COAH Third Round Rule being pursued by the NJLM, we have developed statistical information from municipalities throughout the State which supports the position that implementation of the Third Round COAH Regulations will result in a negative and overwhelming financial burden on municipal taxpayers.  We believe this burden is contrary to the provisions of the New Jersey Fair Housing Act, N.J.S.A. 52:27D-302(h) and 311(d).  This burden soon could be exasperated with the introduction on January 31, 2009 of Senate Bill 2485 which would impose a moratorium on the collection of the two and one-half (2.5%) percent non-residential development fee imposed by the Statewide Non-Residential Development Fee Act, P.L. 2008,c.46, for eighteen (18) months whille allowing the municipal fair share obligation to continue to accrue during this time frame for non-residential construction triggering the need for affordable housing.

Consequently, NJLM seeks permission to appear Amicus Curiae and file a Brief on the substance of the Medford appeal on or before February 6, 2009.  We would at that time share with the Council our position on behalf of our member municipalities concerning the financial impact of the Third Round COAH Rules.

The threshold issue which the Council will be called upon to address in this matter is whether or not the COAH Third Round Regulations are exempt from your jurisdiction pursuant to Article VIII, Section II, 5(c)(5) of the New Jersey Constitution as a constitutional mandate.  NJLM certainly agrees that the Mount Laurel decisions dating back to 1975 have created a constitutional mandate on municipalities to provide for affordable housing opportunities within their jurisdictions.  The Mount Laurel decisions, however, do not provide that the cost of meeting this constitutional mandate should be borne by municipal taxpayers.  Consequently, we would like an opportunity on behalf of those taxpayers to argue to the Council that indeed the application of the COAH Third Round Rules is indeed a matter over which the Council can and should take jurisdiction.

The NJLM has appeared before the Council in the following matters:  In Re Borough of Jamesburg (02-04); In Re Ocean Township (Monmouth County) and Frankford Township (10-01); In Re Complaints filed by the Mayors of Shiloh Borough and the Borough of Rocky Hill and by Southampton Township, Deerfield Township, Shamong Township, Upper Deerfield Township and Buean Vista Township (7-08).

In these above-referenced matters, we believe we have been able to provide valuable information to the Council and would hope to do the same in connection with the above-referenced pending matter.

The above summary is a quotation from the Request to Appear filed on January 16, 2009, by Edwin W. Schmierer, Assistant Counsel to the New Jersey State League of Municipalities, on its behalf.

 Claimant Medford Township's summary of Motion for Summary Judgment:

The Legislature has violated the Unfunded Mandate Clause by requiring municipalities to provide affordable housing to very low income households (those earning 30% or less of a region's median income) without appropriating funds to enable municipalities to meet the mandate.  The Council on Affordable Housing (COAH) has adopted regulations that contravene the Unfunded Mandate Clause by requiring that municipalities utilize municipal revenues to fund the construction of affordable housing in non-inclusionary developments.  The Mount Laurel Doctrine imposes a constitutional obligation on municipalities to adopt land use ordinances that create a realistic opportunity for the construction of a municipality's fair share of the regional need for low and moderate income housing.  There is no constitutional requirement that municipal taxpayers bear the burden of financing the construction of affordable housing.

The above summary is a quotation from the Motion Information Sheet filed on January 23, 2009, by Richard W. Hunt, Township Solicitor, on behalf of Claimant Medford Township.

Respondents' summary of Motion for Summary Judgment:

COAH's regulations and the New Jersey Fair Housing Act ("FHA"), as amended by A500, is not an unfunded mandate.  Both the FHA and its implementing regulations by COAH are carrying out the constitutional mandates as set forth in the New Jersey Supreme Court's Mount Laurel doctrine.  Accordingly, the FHA and COAH regulations are exempt from consideration by the Council on Local Mandates pursuant to Article VIII, Section II, ¶5(c)(5) of the New Jersey Constitution.

Moreover, participation in the certification process establish by the FHA and implemented by COAH is voluntary.  No municipality is required to submit a petition to COAH seeking substantive certification of a municipal affordable housing plan.  Thus, no mandate is involved and summary judgment should be granted.

The above summary is a quotation from the Motion Information Sheet filed on January 23, 2009, by George N. Cohen, Deputy Attorney General, on behalf of Respondents State of New Jersey and COAH.

Amicus Fair Share Housing Center's (FSHC's) summary of legal argument in support of summary judgment against Claimant Medford Township:

The laws and regulations implementing the Mount Laurel doctrine, including the amended Fair Housing Act (FHA) and Third Round Council on Affordable Housing (COAH) regulations, are not unfunded mandates.  First, the laws and regulations implement the requirements of the constitutionally based Mount Laurel doctrine, and so are specifically exempted from Council on Local Mandates jurisdiction.  Second, neither FHA nor COAH regulations impose any obligation on Medford or other municipalities because municipalities can opt out of the Mount Laurel requirements by not zoning or opt out of the FHA/COAH system by not filing a Fair Share Plan.  Finally, FHA and COAH provide options that enable Medford and other municipalities to meet requirements without expending municipal or taxpayer funds, as well as ample sources of earmarked affordable housing funding to offset any expenses a municipality voluntarily incurs to meet requirements.

The above summary is a quotation from the Motion Information form filed on January 23, 2009, by Kevin D. Walsh, Esq., on behalf of Amicus FSHC.

Claimant Medford Township's summary of Reply Brief:

The Mount Laurel doctrine applies to all municipalities.  The doctrine does not require municpal taxpayers to subsidize the cost of the production of affordable housing.  It is immaterial that participation in the COAH process is voluntary, since to comply a municipality must follow COAH regulations.  Compliance mechanisms that do not require a direct taxpayer subsidy, like inclusionary zoning, are not viable options for fully developed municipalities or municipalities that lack sewer or other infrastructure.  Consequently, most municipalities must rely on other mechanisms to satisfy their fair share.  COAH's bonding/funding regulations and the Legislature's requirement that housing be provided for the very low income require that municipalities which lack suitable sites for inclusionary development look to local taxpayers to fund any shortfall in federal or state financial assistance.

The above summary is a quotation from the filing by Richard W. Hunt, Esq., on February 11, 2009, on behalf of Claimant Medford Township.

Respondents' summary of response in opposition to Claimant's motion for summary judgment:

Medford's motion for summary judgment unsuccessfully argues that COAH's regulations and the New Jersey Fair Housing Act ("FHA"), as amended by A500, create an unfunded mandate.  As noted in COAH's brief previously filed with the Council, both the FHA and COAH's regulations implement the constitutional mandate set forth in the New Jersey Supreme Court's Mount Laurel doctrine.  See Burlington County, N.A.A.C.P. v. Mount Laurel, 67 N.J. 151 (1975) (Mount Laurel I) and Southern Burlington County N.A.A.C.P. v. Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II).  Accordingly, the FHA and COAH regulations are exempt from consideration by the Council on Local Mandates pursuant to Article VIII, Section II, par. 5(c)(5) of the New Jersey Constitution.

Medford's contention that the amendments to the FHA and COAH's revised regulations impose a mandate for the expenditure of municipal funds, and thereby are not implementing the Mount Laurel doctrine, is incorrect.  There is no requirement for the expenditure of municipal funds in the FHA or COAH's regulations.  Further, participation in the COAH process is voluntary.  No municipality is required to submit a petition to COAH seeking substantive certification of a muncipal affordable housing plan.  A muncipality may instead decide to go it alone, abstaining from placing itself under the jurisdiction of either COAH or the court in fulfilling its affordable housing obligation.

In addition, where a municipality chooses to place itself under COAH's jurisdiction, COAH's regulations provide numerous techniques, including inclusionary developments, for the municipal provision of realistic opportunities for the development of affordable housing at no cost to a municipality.  In addition to inclusionary developments, there are numerous sources of public and private funding available for affordable housing opportunities.  A list of these sources is provided on COAH's website.  COAH's previously submitted brief in support of its motion for summary judgment also describes some of the other methods available in COAH's regulations for the provision of affordable housing opportunities without the expenditure of municipal funds.

Medford's assertion that there is a lack of vacant developable land within its borders is irrelevant to its unfunded mandate assertion.  COAH's regulations provide for a vacant land adjustment to the affordable housing obligation of a municipality that is able to demonstrate a lack of developable land.  N.J.A.C. 5:97-5.2.  As a result, while its affordable housing obligation remains, that obligation is adjusted to provide that a portion of the obligation is met on the available vacant land, with the remainder of its obligation to be provided by overlay zoning for future development of sites not yet available.

In addition, Medford contends that its location within the jurisdiction of the Pinelands Commission burdens its ability to meet its affordable housing obligation.  Again, this does not impose an unfunded mandate.  In addition, in the amendments to the FHA, new residential developments within the Pinelands are to reserve at least 20 percent of the residential units for low and moderate income households.  This demonstrates the FHA's commitment to the use of inclusionary developments as a major source of affordable housing opportunities that will assist municipalities in meeting their obligations without expenditure of municipal funds.  In addition, COAH is working with the Pinelands Commission in coordinating their respective regulations.

Finally, as noted in COAH's summary judgment brief, the challenges to A500 and COAH's revised regulations raised by Medford are also raised in its appeal, as well as other appeals pending in the Appellate Division and, therefore, are not properly before the Council as an unfunded mandate challenge.  As a result, Medford's motion fo summary judgment should be denied and its Complaint should be dismissed by the Council.

The above summary is a quotation from the filing by George N. Cohen, Deputy Attorney General, on February 11, 2009, on behalf of Respondents State of New Jersey and COAH.

Amicus Fair Share Housing Center's (FSHC's) summary of Reply Brief:

In our reply, we argue (1) The Mount Laurel doctrine may require municipal expenditures.  COAH's regualtions have done so since prior to the effective date of the unfunded mandates prohibition; (2) Medford's inclusion in the Pinelands provides it with additional ways to adjust its obligation; and (3) Medford has produced no evidence to support most of its claims regarding scarce land, a lack of sewer capacity, and its inability to meet its obligation through inclusionary development and redevelopment.

The above summary is a quotation from the filing on February 11, 2009, by Kevin D. Walsh, Esq., on behalf of Amicus FSHC.

Amicus Mount Laurel Township's summary of Brief in support of Claimant Medford Township's Complaint:

Mount Laurel Township avers that its Fair Share Number under the Revised 3rd Round COAH regulations of 1,421 affordable housing units violates the unfunded mandate clause.

In support, Mount Laurel submits to the Council a February 9, 2009 report of its Township Planner, which concludes that Mount Laurel taxpayers will be required to fund the production of a minimum of 482 affordable housing units.  This planning report contains all liberal assumptions in favor of COAH, including: a) a full development and buildout of the entire municipality by 2018; b) no open space acquisitions by the municipality; c) development of every residential parcel that could be subdivided in the municipality, including 168 lots already containing a single-family dwelling; d) full utilization of inclusionary development for all remaining vacant and residentially zoned land in accordance with COAH presumptive densities; e) full non-residential buildout and collection of all developer fees through 2018; f) full expenditure of all affordable housing trust fund monies, including developer fees collected through 2018; g) maximum utilization of COAH bonus and double credits; and h) utilization of all COAH compliance mechanisms most efficiently to maximize the potential affordable housing credits to the municipality at the least cost permitted by COAH regulations.

This comprehensive planning report supports Mount Laurel Township's argument that this "unfunded mandate" is real and not speculative.

Mount Laurel also avers that the "constitutional exception" of the Council Local Mandates statute does not apply.

Mount Laurel argues that the Fair Housing Act (FHA) and COAH regulations implement legislation, rather than the Constitution.  No better example of this is the Regional Contribution Agreement (RCA) which was adopted as compromise legislation that has since been repealed.  Moreover, the FHA statutory provisions and COAH's regulations are on par with other enabling statutes regulating land use in New Jersey by other state agencies, including the Department of Environmental Protection (DEP), Department of Transportation (DOT), Pinelands Commission, CAFRA and the Highlands Council.

Alternatively, Mount Laurel avers that, if the FHA codifies and implements the decisional law and constitutional principles of Mount Laurel, Section 311(d) of the Act specifically incorporates an unfunded mandates provision requiring no municipality to expend municipal funds to provide a realistic opportunity for affordable housing.  Thus, any unfunded mandate imposed by the application of the FHA and COAH regulations would violate the New Jersey Constitution and implementing FHA statute.

The above summary is a quotation from the filing on February 11, 2009, by Christopher Norman, Esq., on behalf of Amicus Mount Laurel Township.

Amicus N.J. Department of the Public Advocate's summary of Brief in support of Respondents' Motion for Summary Judgment:

Before determining whether the actions contemplated by the COAH third round rules or the recent Fair Housing Act amendments (A500) are "unfunded," it is logically necessary first to determine whether they constitute a "mandate."  Because participation in the COAH process is completely voluntary on the part of a municipality, the rules promulgated by COAH cannot constitute a "mandate."  And to the extent that the provisions of A500 merely predicate participation in a state-funded program upon compliance with certain conditions, this does not impose a mandate either, but merely offers the municipality a choice of whether or not to participate in that program.  Thus, in answer to the Council's inquiry as to"[w]hether the cited provisions impose direct unfunded mandates as opposed to speculative obligations," the Public Advocate believes that the imposition placed on municipalities by the challenged provisions are not only speculative, but in fact are not "obligations" at all.

Moreover, in constuing its jurisdiction, the Council should be mindful of the exclusive role of the courts in exercising the judicial function, and in particular in defining those obligations "which implement the provisions of this Constitution."  Given the intimate involvement of the courts in determining whether the COAH third round rules comply with the constitutional Mount Laurel doctrine, and the complementary power of the executive and legislative branches of government to craft appropriate remedies to address constitutional requirements, this Council should avoid extending its jurisdiction in a way that conflicts with the judicial or political functions vested in one of the three traditional branches of government.  The Public Advocate therefore answers in the affirmative the Council's inquiry whether, in view of the Mount Laurel doctrine, the challenged provisions of the Fair Housing Act amendments and COAH's revised third round regulations fall within an exemption to the Council's authority because they "implement the provisions of [the New Jersey] Constitution."

The above summary is a quotation from the filing on February 11, 2009, by Ronald K. Chen, Esq., on behalf of Amicus NJ Department of the Public Advocate.

Amicus NJ State League of Municipalities' summary of Brief in support of Claimant Medford Township's Complaint and motion for summary judgment:

As Amicus Curiae in support of the Township of Medford's ("Medford's") complaint and motion for summary judgment, the NJSLOM argues that the Council on Local Mandates has jurisdiction over Medford's complaint because the challenged provisions burden local government with direct, unfunded mandates in direct contrast with the Mount Laurel doctrine.  While the NJSLOM acknowledges that the Fair Housing Act ("FHA") requires the provision of affordable housing through land use regulation, the challenged provisions, along with the current iteration of the FHA and the Council on Affordable Housing's Regulations as a whole, impose State mandates beyond the scope of land use regulation without the provision of adequate funding.  As such, Medford and municipalities across New Jersey must expend municipal revenue to meet their affordable housing obligation.  Thus, the NSLOM argues that the challenged provisions should be declared as unfunded mandates and, therefore, unconstitutional.

The above summary is a quotation from the filing, on February 11, 2009, by Edwin W. Schmierer, Esq., on behalf of Amicus NJ State League of Municipalities.