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Supreme Court sides with builders, housing advocates in COAH ruling

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In a long-awaited decision, the state Supreme Court has sided with builders and affordable-housing advocates in a battle over a decade-old policy dictating how towns must meet obligations for low- and moderate-income units.

The panel today affirmed a lower court's ruling that struck down guidelines adopted by the controversial Council on Affordable Housing. In doing so, the high court also ordered the agency to come up with new rules within five months that it said can be implemented quickly, and help the state's decades-old push to prevent exclusionary zoning laws.

The case centered largely on COAH guidelines that say a municipality accrues its affordable housing obligation as a percentage of the residential building and job growth that occurs within its borders. Under that so-called growth share formula, the ratios are based on statewide data on projected housing need, employment and residential growth.

But the court today agreed with opponents of the concept, noting towns can effectively avoid building affordable units by not allowing development. The 3-2 majority also took issue with the formula because its initial calculations are not specific to individual regions.

The formula was established in 2004 under COAH's "third round" of rules —and then revised in 2008 — aiming to carry out the 28-year-old Fair Housing Act and the Mount Laurel court decisions that go back to 1975.

The rules were intended to address a second round that expired in 1999.

COAH has been a frequent subject of legal battles in recent years. In July, the Supreme Court rejected Gov. Chris Christie’s attempt to abolish the agency. And in May, an appeals court blocked his administration from taking $164 million in unspent affordable housing fees, which towns collect from developers, to balance the state budget.

In its opinion today, the state Supreme Court wrote, "The policy adopted by the Legislature cannot be rewritten by COAH to the degree it has done through the growth share methodology." But it also acknowledged that new guidelines may be in order based on factors such as the housing downturn and other changes over the past three decades, while ordering COAH to come up with a new framework that was more consistent with the standards of prior rounds.

"We hold that our remedy, imposed 30 years ago, should not now be viewed as a constitutional straightjacket to legislative innovation," the judges wrote, later adding: "A remedy must be put in place to eliminate the limbo in which municipalities, New Jersey citizens, developers and affordable-housing interest groups have lived for too long."

The opinion was cheered by a coalition of housing and planning advocates.

"This decision will allow New Jersey municipalities to move ahead with the critical mission of planning for and ensuring the construction of needed affordable homes," Charles Latini, New Jersey chapter president of the American Planning Association, said in a prepared statement. "It removes the confusion and uncertainty that has plagued COAH for 14 years."

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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