An Administrative Rule by Any Other Name Must Still be Properly Adopted

In re Adoption of Regional Affordable Housing Development Program Guidelines, 418 N.J. Super. 387 (App. Div. 2011).  In 2009, the Council on Affordable Housing (“COAH”) adopted Regional Affordable Housing Development Program Guidelines, in order to implement an amendment to the Fair Housing Act, N.J.S.A. 52:27D-301 to -329.19, that the Legislature had passed in 2008.  The Fair Share Housing Center, a public interest group that advocates for affordable housing policies, challenged the Guidelines on various grounds.  One of those arguments was that the Guidelines were in fact administrative rules that were required to be adopted in accordance with the Administrative Procedure Act (“APA”), N.J.S.A. 52:14B-1 to -15.  COAH had not followed the APA.  Writing for the Appellate Division, Judge Skillman agreed that the APA had to have been followed and that, therefore, the Guidelines were invalid.

Judge Skillman applied the six-factor test of Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313, 331-32 (1984), in determining that the Guidelines were in fact administrative rules that were subject to the APA.  The Guidelines were “intended to have wide coverage encompassing a large segment of the [municipalities] regulated by” the Fair Housing Act.  The Guidelines were to apply “generally and uniformly to all” and on a prospective basis.  Moreover, the Guidelines embodied a policy “not previously expressed in any official and explicit agency, determination, adjudication or rule,” and reflected a decision “in the nature of the interpretation of law.” 

COAH argued that the APA was inapplicable because the Guidelines were merely “non-binding recommendations.”  The Appellate Division observed, however, that “nearly every section of the Guidelines uses mandatory terminology such as ‘shall’ and ‘must.'”  But even if the Guidelines were not mandatory, they would still have been adminstrative rules under the Metromedia criteria and, therefore, subject to the APA.  Accordingly, the Appellate Division remanded to COAH for the adoption, in accordance with the APA, of rules and regulations to implement the 2008 amendment to the Fair Housing Act.