The New Jersey affordable housing world received some much-needed guidance on the status of the Council on Affordable Housing's (COAH) Third Round regulations, which used a "growth share" methodology to calculate municipal affordable housing obligations.

On September 26, the New Jersey Supreme Court upheld the invalidation of COAH's Third Round regulations in In re Adoption of N.J.A.C. 5:96 & 5:97 by N.J. Council on Affordable Housing. Rather than invalidate the regulations and the growth share methodology on constitutional grounds (as the Appellate Division did), the court held the regulations violated the New Jersey Fair Housing Act, which requires municipal affordable housing obligations to be based on "regional need." The court ordered COAH to adopt new regulations based on the Second Round methodology (as opposed to growth share) within five months. 

The key part of the decision, however, was not the court's holding on that specific issue but its invitation to the Legislature to step back into the affordable housing arena. The court noted that Mount Laurel decisions "should not be viewed as a constitutional straight jacket [sic] to legislative innovation" in creating a methodology to ensure towns provide their fair share of affordable housing.

Though the decision is a step toward clarifying the uncertainty over affordable housing, it by no means resolves the issue. Many people expect COAH will not adopt new regulations within five months. Further, it seems inevitable that the Legislature will reenter the affordable housing world. Since the court did not provide any real guidance as to what would be constitutionally acceptable, whatever legislation is adopted would likely result in further litigation.

Lastly, and separate from this decision, Fair Share Housing Center's appeal of the state's attempted seizure of municipal affordable housing trust fund money remains pending before the Appellate Division. Notwithstanding this appeal, the clock is still ticking on towns to spend affordable housing trust fund money within four years of collection; otherwise, it is subject to possible seizure by the state.

Though this battle over COAH's growth share methodology has concluded, the war over affordable housing continues.