As anticipated, New Jersey Gov. Chris Christie conditionally vetoed S-1 (A3447), a bill passed by both houses of the Legislature that would have abolished the Council on Affordable Housing (COAH) and significantly modified New Jersey’s Fair Housing Act pertaining to a municipality’s constitutional obligation to provide affordable housing. In his message to the lawmakers, the governor gave his support to an earlier version of the bill, which the Senate adopted back in June 2010. The governor objected to the changes made by the Assembly to S-1, which were endorsed by the Senate in January of this year. Specifically, the governor cited the following problems with the proposed legislation:

  • S-1 as passed by the Assembly and Senate required 10 percent of the total housing units in most municipalities to be dedicated to affordable housing. The governor indicated that such a blanket quota would impose an overwhelming burden on a number of municipalities, including Brick, Cherry Hill and Toms River, each of which, according to the governor, would have an affordable housing obligation of more than 2,000 units. Under the prior version of the bill supported by the governor, one out of every 10 newly constructed housing units in a municipality would have been required to be affordable housing. Consequently, if a municipality elects not to have growth, it would be exempt from an affordable housing requirement. (This approach is essentially the “growth share” formula that the New Jersey Appellate Division has found to be unconstitutional).
  • The legislation required that new developments be inclusionary, which meant that they would contain a 20 percent set-aside of affordable housing units mixed with market-rate units. The governor found that this legislated sprawl because for each affordable housing unit required, the municipality would have to permit the construction of an additional five market-rate housing units. (For example: if Cherry Hill were to build all 2,000 of its affordable housing units as part of inclusionary developments, this would mean the construction of an additional 10,000 market-rate units). •The governor believed that the presumptive minimum densities mandated in the bill to encourage affordable housing of between 6 to 20 units per acre were a direct interference with home rule and the local planning process.
  • The governor believed that the bill’s establishment of a “housing compliance professional” paid for by municipalities to certify fair-share plans was an unnecessary expense to municipalities, who must already hire a planner to prepare their compliance plans, and it did not adequately protect municipalities from builder’s remedy lawsuits.
  • The Highlands, Pinelands, Fort Monmouth and Meadowlands districts were required to have 15-20 percent of all new housing construction as affordable. In the governor’s view this was much too high in these environmentally sensitive areas.

In summarizing his criticism of the bill the governor stated: “All in all, the latest version of Senate Bill No. 1 places far too heavy a burden on many municipalities and amounts to a legislative codification of many of COAH’s practices, instead of simply eliminating COAH as does the version of Senate Bill No. 1 that was passed in June of 2010.”

It is unclear at this time whether the Senate and Assembly are willing to enact new affordable housing legislation to address the governor’s concerns. The legislative process appears to have reached a stalemate.

All eyes are now turned to the judiciary. In October 2010, the Appellate Division struck down key portions of COAH’s Third Round rules as unconstitutional, finding that the growth-share methodology employed by the rules allowed municipalities to avoid their obligations to provide affordable housing by simply electing to significantly reduce the future growth of market-rate housing within its borders. The court ordered COAH to enact new rules within five months using a formula similar to the court-approved methodologies of the prior-round rules. Several parties petitioned the New Jersey Supreme Court to review the Appellate Division decision. In January, the Appellate Division ordered COAH to begin preparation of revised regulations in compliance with its October opinion, but this order was stayed by the Supreme Court. As of this writing, the Supreme Court has not acted on the appeal requests. Meanwhile, New Jersey affordable housing policy remains in a state of confusion with no prompt judicial or political solution on the horizon.