In re Failure of the Council on Affordable Housing to Adopt Trust Fund Commitment Regulations, 440 N.J. Super. 220 (App. Div. 2015). The Fair Housing Act, N.J.S.A. 52:27D-329.2(a), states that the Council on Affordable Housing (“COAH”) “may authorize a municipality that has petitioned for substantive certification … to impose and collect development fees from developers of residential property.” That section also provides that municipalities “may not spend or commit to spend any affordable housing development fees … without first obtaining [COAH’s] approval of the expenditure,” and further requires that COAH “shall promulgate regulations regarding the establishment, administration and enforcement of the expenditure of affordable housing development fees by municipalities.”
Though COAH had expressed the intent to promulgate such regulations, it did not do so, just as it has not acted in other respects, as a result of which, in In re Adoption of N.J.A.C. 5:96 and 5:97, ___ N.J. ___ (2015), discussed here, the Supreme Court recently reassigned to the courts other key powers of COAH. The Fair Share Housing Center, the same party that won that relief in the Supreme Court, sought to redress COAH’s inaction regarding the municipal development fee regulations.
Today, in an opinion by Judge Fisher whose discontent (to say the least) with COAH was palpable, the Appellate Division similarly ruled that since “COAH has ignored the considered wisdom of our Legislature by failing to promulgate rules,” the courts will now decide issues relating to the application or disposition of affordable housing development fees. The panel declined to make that decision itself, due to the lack of a full record or a contested case. Additionally, Judge Fisher enjoined “COAH or any other part of the executive branch from engaging in any further attempt to seize affordable housing trust funds,” noting that the 2012 budget as signed into law had provided that uncommitted municipal development fees, which were trust funds that had been transferred to a state trust fund, were to be “deposited in the General Fund as State revenue.”
COAH had justified its failure to promulgate regulations by contending that no regulations were needed. Judge Fisher found that “not a serious response to the problem at hand.” The Legislature had mandated regulations, using “shall” instead of “may.” That disposed of COAH’s contention.
This opinion was foreshadowed, and practically compelled, by the Supreme Court’s recent ruling in In re Adoption of N.J.A.C. 5:96 and 5:97. As was so there, with COAH having effectively forfeited its power to act by having failed to enact regulations, the Appellate Division had no realistic alternative but to step in. Judge Fisher noted that no party had disputed the court’s power to intervene to review agency inaction and to prevent any resulting denial of fundamental procedural fairness.