NJ Appeals Court Upholds Hoboken’s Affordable Housing Ordinance

In Fair Share Housing Center v. Zoning Board of Hoboken, et al., the Appellate Division considered five consolidated appeals filed to determine the enforceability of an affordable housing ordinance adopted by the City of Hoboken. The appeals court ultimately determined that the ordinance was enforceable, overturning the trial court’s ruling.

NJ Appeals Court Upholds Hoboken’s Affordable Housing Ordinance

The Facts of the Case

The four developers named as defendants in the lawsuit received significant relief from the City of Hoboken’s zoning laws in the form of variances from the Zoning Board of Adjustment (Zoning Board), conditioned upon the developers’ compliance with the City’s affordable housing ordinance. The Fair Share Housing Center (“FSHC”) filed four individual actions in lieu of prerogative writs seeking declaratory and injunctive relief against the Zoning Board and the private developers. FSHC specifically sought compliance with the City’s affordable housing ordinance in the form of a judicial declaration that any zoning approvals the developers received be deemed void or enjoined, unless each one filed a “plan of compliance” with the affordable housing ordinance.

In response to the suits, the developers asserted a number of affirmative defenses, which included challenging the validity, enforceability, and constitutionality of Hoboken’s affordable housing ordinance. The trial court held the ordinance was unenforceable because it had not been submitted to the Council on Affordable Housing (COAH) for review. Accordingly, the court invalidated the zoning approval conditions imposed by the Zoning Board of Adjustment, relieved the developers from their obligation to provide affordable housing, and enjoined the City from imposing any requirement to construct affordable housing units and/or collect any monetary contribution related to affordable housing.

The Court’s Decision

The Appellate Division reversed. The court noted that with the Supreme Court decision in March effectively eliminating the requirement of submitting ordinances to COAH, and delegating that responsibility to the courts, that option was now moot. The Supreme Court’s decision was rendered subsequent to the decision of the trial court. The Appellate Division also held that the trial court erred in invalidating the zoning approval conditions related to compliance with the affordable housing ordinance’s provisions.

“The trial court misconstrued the [Fair Housing Act] and the case law applying it. There is no provision in the FHA or regulations promulgated by COAH requiring municipalities to submit all ordinances that impact a municipality’s affordable housing obligation to COAH for approval,” the opinion states. The Appellate Division also reversed the invalidation of a section in the ordinance providing for voluntary payments in lieu of compliance with the ordinance’s affordable housing obligations. The court held that the payment in lieu section of the ordinance did not need COAH’s approval.

According to the Appellate Division, the trial court interpreted the New Jersey Supreme Court’s decision in Holmdel Builders Ass’n v. Holmdel, 121 N.J. 550 (1990) too broadly, erroneously concluding that every municipality with an affordable housing obligation must submit to COAH for approval of its plan to meet that need.

“[T]he trial court misconstrued the purpose and role the Legislature intended COAH to play in assisting municipalities in fulfilling their constitutional obligation to provide a realistic opportunity for the construction of their fair share of the present and prospective regional need for low and moderate income housing,” the Appellate Division explained. “The substantive certification process available to municipalities under N.J.S.A. 52:27D-313(a) is entirely voluntary.” The Appellate Division remanded the case back to the trial court for further proceedings “to adjudicate the remaining legal issues raised by the parties.”

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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