IN THE MATTER RE-PETITION OF HOWELL TOWNSHIP

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1445-04T51445-04T5

IN THE MATTER OF THE

RE-PETITION OF HOWELL

TOWNSHIP FOR SUBSTANTIVE

CERTIFICATION.

_______________________________________

 

Argued May 15, 2006 - Decided June 28, 2006

Before Judges C. S. Fisher, Yannotti and Miniman.

On appeal from Final Decision of the New Jersey Council on Affordable Housing.

Jeffrey Kantowitz argued the cause for appellant Elon Associates, L.L.C. (Goldberg, Mufson & Spar, attorneys; Mr. Kantowitz, on the brief).

Pamela Gellert Deputy Attorney General, argued the cause for respondent Council on Affordable Housing (Zulima V. Farber, Attorney General, attorney; Michael J. Haas, Assistant Attorney General, of counsel; Ms. Gellert, on the brief).

Santina M. Bombaci argued the cause for respondent Township of Howell (DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, attorneys; Ms. Bombaci, on the brief).

PER CURIAM

Elon Associates, L.L.C. (Elon) appeals from a final determination of the Council on Affordable Housing (COAH) granting a petition by the Township of Howell (Howell or Township) for "second cycle" substantive certification of its affordable housing plan. We affirm in part, reverse in part and remand for further proceedings.

I.

In March 1995, Howell petitioned COAH for substantive certification of its plan to satisfy its "second cycle" affordable housing obligation. Howell proposed to satisfy its obligation in part with 79 units that would be included in a residential housing development on the so-called Weiner tract. In October 1998, COAH granted final substantive certification to Howell's plan. Elon appealed and challenged COAH's approval of credit for the units on the Weiner tract, arguing that it was not likely that those units would be built because of the presence of wetlands on the property and the absence of sewer facilities.

We reversed COAH's determination and held that Elon had presented sufficient factual information to raise a question as to whether the Weiner site afforded a realistic opportunity for the construction of the affordable housing units. In re Township of Howell Petition for Substantive Certification, No. A-1586-98T2 (App. Div. March 20, 2001) (Elon I), certif. denied, 169 N.J. 608 (2001). We remanded the matter to the agency to consider Elon's claim that the Weiner site was unsuitable. Ibid.

Following our decision in Elon I, Howell withdrew the Weiner tract from its plan and re-petitioned COAH for substantive certification. Elon filed three appeals addressed to COAH's delay in completing its review of Howell's plan. We addressed the appeals in In re Petition of Howell Tp. Monmouth County, 371 N.J. Super. 167, 170 (App. Div.) (Elon II), certif. denied, 182 N.J. 140 (2004). We determined that COAH's delay was "inexcusable and disturbing." Id. at 186. We rejected Elon's request for site-specific relief but ordered that the administrative process be completed and a final determination issued by October 5, 2004. Id. at 186-188.

Howell's "second cycle" affordable housing obligation consists of 1109 units. By September 2004, 96 units had been rehabilitated and Howell was committed to funding the program so that an additional 58 units would be rehabilitated. In addition, Howell sought credit for 625 units in completed projects, including four group homes and two age-restricted projects. Howell proposed to meet the shortfall of 330 units through regional contribution agreements (RCAs) with Belmar and Freehold.

Elon objected to the amended plan and asserted that Howell should not receive any credit for the group homes, credit should be disallowed for the RCAs with Belmar and Freehold and COAH erred by waiving its rules limiting the number of credits that a municipality may receive for age-restricted units. COAH's staff issued a pre-mediation report on May 28, 2004 and mediation sessions were held on July 20, 28 and August 4, 2004. Howell decided to reduce the number of units transferred to Freehold and executed an RCA with Asbury Park calling for the transfer of 102 units.

The mediator issued a report on September 2, 2004. The mediator noted that Howell determined that Elon's site was not suitable for inclusion in its affordable housing plan because the site was located in an area designated in the State Development and Redevelopment Plan in planning area 4B, which includes lands that are "rural, environmentally sensitive." The Township found that the proposed use of Elon's site was inconsistent with Howell's master plan and Howell satisfied its affordable housing obligation for the "second cycle" without including the Elon property. The mediator found that there were no contested issues of material fact that would require transfer of the case to the Office of Administrative Law (OAL) for a hearing. However, the mediator recommended that a COAH task force re-evaluate whether the Township should be permitted a waiver from the rule limiting the credits that could be given for age-restricted affordable units.

Elon renewed its previous objections and also argued that the RCA with Asbury Park required that Howell re-petition for substantive certification. In addition, Elon sought documents which addressed the issue of whether Belmar, Freehold and Asbury Park had sufficient substandard housing to justify the RCAs. COAH provided Elon with the documentation it requested. Elon's counsel asserted, however, that there was no proof that Asbury Park had 102 dilapidated units in need of rehabilitation. In addition, after receiving a copy of Asbury Park's structural survey, Elon's counsel inquired how COAH had determined that Asbury Park had 261 units in need of rehabilitation.

A compliance report was issued on September 22, 2004, which recommended approval of the Township's plan, as amended to include the Asbury Park RCA. The report noted that all of the units in the plan had been built and Howell had already transferred funds to complete the RCAs. The report recommended that COAH approve the waiver of the cap on credit for age-restricted units. Elon filed objections to the report. On October 5, 2004, after hearing argument from Elon's counsel and a presentation by its expert, COAH adopted a resolution granting substantive certification of Howell's plan. This appeal followed.

Elon raises the following contentions for our consideration: 1) COAH erred in refusing to transfer the case to the OAL for a hearing on Elon's claim that Howell had negotiated in bad faith; 2) the pre-mediation report did not conform to COAH's regulations and improperly prejudiced COAH's determination; 3) the mediation report omitted critical facts and information; 4) COAH improperly granted credit for group homes; 5) COAH erroneously granted credit for the RCAs; 6) the waiver of the limit of credits for age-restricted units was erroneous and contrary to the agency's regulations; and 6) several contested issues of material fact were never resolved and should have been referred to the OAL for a hearing. Elon further contends that, should the court reverse the grant of substantive certification, it should require the inclusion of Elon's property for inclusionary development in Howell's affordable housing plan.

II.

We turn first to Elon's contention that the mediation process was flawed and it should have been afforded a hearing at the OAL on its contention that the Township mediated the matter in bad faith. At the first mediation session, Howell was not prepared to respond to Elon's proposal to construct an inclusionary development on its site. During the second session, Howell asked Elon to prepare a concept plan showing a residential development with six units per acre rather than the proposed ten units. Howell advised Elon at the third session that a multi-family development would result in too much development and would be inconsistent with its master plan. Elon contends that the Township acted in bad faith by failing to inform Elon at the outset that it would not accept multi-family housing on Elon's tract and an evidentiary hearing should have been conducted on this claim. We disagree.

One of the purposes of the Fair Housing Act, N.J.S.A. 52:27D-301 to -329 (FHA), is to resolve disputes about exclusionary zoning through the "mediation and review process set forth in [the] act and not litigation." N.J.S.A. 52:27D-303. COAH will grant substantive certification if a municipality's affordable housing plan complies with the FHA and the agency's rules and there are no objections. N.J.S.A. 52:27D-314. However, the FHA requires that COAH engage in mediation "if an objection to the municipality's petition for substantive certification is filed" with the agency. N.J.S.A. 52:27D-315(a). "In cases in which an objection is filed to substantive certification, [COAH] shall meet with the municipality and the objectors and attempt to mediate a resolution of the dispute." N.J.S.A. 52:27D-315(b).

If mediation is successful, COAH shall issue substantive certification after the submission by the municipality of an appropriate fair share plan. Ibid. If the mediation is not successful, the agency must transfer the matter to the OAL for hearing as a contested case, as defined in the Administrative Procedure Act (APA). N.J.S.A. 52:27D-315(c). The APA generally defines the term "contested case" to mean any proceeding, in which the "legal relations" of "specific parties" are required by statute or constitutional right to be determined by an agency after an opportunity for a hearing. N.J.S.A. 52:14B-2(b). An agency is not required to hold a trial-type hearing unless material adjudicative facts are in dispute. In re NJPDES Permit No. NJ0025241, 185 N.J. 474, 486 (2006).

Here, COAH correctly found that Elon's claim that the Township mediated in bad faith did not present any issue of material fact which required an evidentiary hearing at the OAL. The parties to the mediation agreed in writing that offers and counteroffers submitted during mediation would not be disclosed in "this or any other proceeding." A hearing on Elon's claim would necessarily involve the disclosure of confidential information, in contravention of the parties' expressed agreement not to disclose such information.

Moreover, the facts as alleged by Elon do not raise a prima facie case of bad faith. The Township had consistently taken the position that Elon's property is not suitable for the high-density residential development that Elon proposed. However, in the mediation, Howell suggested that Elon propose a development with six units per acre rather than ten. On further consideration, Howell determined that even six units was too dense. There is no evidence that Howell acted in bad faith when it asked Elon to submit a new concept plan with less density. There is no evidence that Howell failed to consider Elon's plan in good faith. The fact that Howell decided to adhere to its previously stated position that the Elon site was not suitable for high-density development is not evidence of bad faith.

We therefore conclude that COAH did not err in denying Elon's request for an evidentiary hearing on its bad faith claim.

III.

Elon next contends that COAH's pre-mediation report tainted the mediation process because it concluded that Howell would be eligible for substantive certification if it submitted additional information. Elon also argues that the mediation report was flawed because it contained certain factual errors. We find no merit in either contention.

COAH's regulations provide that after a petition for substantive certification has been filed, the agency's staff must prepare either a report requesting additional information or a pre-mediation report. N.J.A.C. 5:91-6.2(b). The report requesting additional information

shall determine if there are problems associated with the municipal submission that require designation of additional sites, a change in inclusionary sites, a substantial increase in density, a fundamental change in approach and/or missing documentation. While the problems are being addressed, the Council shall direct the parties to mediation.

[N.J.A.C. 5:91-6.2(c).]

In this matter, COAH's staff prepared a report seeking additional information, not a pre-mediation report. The report thoroughly analyzed the history of Howell's petition and its revised plan. The report concluded that additional information was required, including an amended RCA with Freehold, Howell's latest master plan, evidence regarding certain affordability restrictions, and confirmation that the objections regarding the Weiner site had been withdrawn. The report concluded that, subject to the receipt of the additional information, Howell's plan met its "second cycle" affordable housing obligation.

The report complied in all respects with the requirements of N.J.A.C. 5:91-6.2. Although the report concluded that Howell's plan qualified for substantive certification, the report did not foreclose consideration of Elon's objections in mediation and ultimately by COAH. We therefore reject Elon's assertion that the report tainted the mediation process.

We likewise reject Elon's contention that the mediator's report was flawed. COAH's rules provide that a mediation report must "list all issues that remain in dispute between the municipality and the objectors" and summarize "the stipulations and other agreements reached by the municipality and the objectors." N.J.A.C. 5:91-7.3(a). The report issued in this matter complied with the rule. It summarized all of the agreements reached in mediation and detailed the remaining disputed issues.

Elon says that that the report did not accurately describe its property. The report stated that Elon's property is situated in a "rural, environmentally sensitive" area and is not currently included in an approved sewer management area. Elon asserts that the report failed to mention that sewer service is "proposed" for its property, did not mention that the property was located near a densely developed area and failed to note that Howell has not designated any "centers" in the Township through the State planning process. The report may not have mentioned these points but Elon brought this information to COAH's attention in the written objections to the report. In the circumstances, Elon could not have been prejudiced by the omission of this information from the report.

IV.

We turn next to Elon's assertion that COAH erred in granting credit to Howell for the group homes. COAH granted Howell thirteen "first cycle" credits for two group homes built prior to 1986 and twelve credits for two group homes built after 1986. Elon contends that, in calculating the affordable housing obligations for 1987-1999, COAH did not include persons living in group homes. Elon argues that granting Howell credit for group homes is inconsistent with COAH's methodology and "perniciously diminishes the remedy" for those in need of affordable housing.

COAH's regulations expressly permit municipalities to address their affordable housing obligation with so-called "alternative living arrangements." N.J.A.C. 5:93-5.8(a). An "alternative living arrangement" is defined as one in which individuals live in separate bedrooms but share kitchen, plumbing and heating facilities as well as common areas. N.J.A.C. 5:93-1.3. One such "alternative living arrangement" is a group home for the developmentally disabled or the mentally ill. Ibid. The regulations provide that the unit of credit for an "alternative living arrangement" is the bedroom. N.J.A.C. 5:93-5.8(b).

We upheld COAH's regulation providing credit for group homes in In the matter of Petition for Substantive Certification Filed by Freehold Township, No. A-2521-01T2. (App. Div. October 23, 2003). There we rejected the contention that the rule violated express or implied polices in the FHA. We stated:

In our view, COAH reasonably met the goals of the FHA by encouraging municipalities to zone for alternative living arrangements as a means of providing housing to those who otherwise might not be able to obtain it. For example, the four group homes operated by Easter Seals of New Jersey are occupied by the handicapped homeless. A number of credited bedrooms are in homes designed to house people with developmental disabilities. We can reasonably assume that the occupants of these homes generally would not be able to afford even deed restricted apartments. COAH has been criticized for not encouraging the construction of housing for the very poor. See [Toll Bros., Inc. v. Tp. of W. Windsor, 173 N.J. 502, 569-75 (2002) (Stein, J., dissenting)]. By crediting each bedroom as a housing unit COAH encourages municipalities to create realistic opportunities for housing for some of the very poor. The regulation is not arbitrary, unreasonable or in violation of the

legislative policies embodied in the FHA.

[Id. slip op. at 33.]

In this matter, COAH followed the dictates of N.J.A.C. 5:93-5.8(b). Since the regulation has been upheld by this court as a valid exercise of the agency's rulemaking authority under the FHA, COAH can hardly be faulted for awarding Howell credits for the group homes. We agree with the reasoning and conclusion reached in Freehold Township and therefore uphold the award of credits in this case.

V.

Elon also argues that COAH should not have permitted Howell to satisfy 330 units of its affordable housing obligation with RCAs with Belmar, Freehold and Asbury Park. Elon asserts that COAH failed to substantiate that the receiving municipalities had sufficient number of deteriorated units to support the programs funded by the RCAs. Elon also contends that COAH erred by failing to require Howell to re-petition for substantive certification after it entered into the RCA with Asbury Park.

The FHA provides that a municipality may transfer up to fifty percent of its housing obligation to another municipality within the region by means of an RCA. N.J.S.A. 52:27D-312(a); N.J.S.A. 52:27D-311(c). The agreements are reviewed by the county planning board and the New Jersey Housing and Mortgage Finance Agency (HMFA). N.J.A.C. 5:93-6.4. In addition, the receiving municipality is required to provide COAH with detailed information concerning the proposed project to be funded with the RCA. N.J.A.C. 5:91-11.3. COAH may approve the RCA if it will create a realistic opportunity for affordable housing with convenient access to employment opportunities and is consistent with sound regional planning. N.J.S.A. 52:27D-312(c).

COAH granted Howell 86 credits for the RCA with Belmar as part of its substantive certification of Howell's "second cycle" plan. COAH had initially approved the Belmar RCA on December 6, 1995. Thereafter, Howell transferred $1,720,000 to Belmar to implement the project plan, which entails rehabilitation of existing housing scattered throughout Belmar. As of September 2005, Belmar had rehabilitated 58 units and another 17 units were being rehabilitated.

COAH granted Howell 142 credits for the Freehold RCA, which COAH initially approved on April 1, 1998. To implement that agreement, Howell transferred $2,840,000 to Freehold, the equivalent of 142 units. Freehold used the monies for the construction of 138 new affordable units at the so-called "Rug Mill" project. Freehold intends to rehabilitate four additional units to meet the terms of the RCA.

We are convinced that there is no merit to Elon's challenge to the credits awarded by COAH for the Belmar and Freehold RCAs. As we pointed out previously, the Belmar and Freehold agreements were approved by COAH in 1995 and 1998, respectively. In approving those agreements, COAH expressly found that the RCAs provided a realistic opportunity for low and moderate income housing. The record does not reflect that Elon ever objected to the RCAs or the credits that were awarded to Howell as part of the initial grant of substantive certification in this case. Howell has fully funded these two RCAs and the receiving municipalities have substantially completed the projects funded under the agreements. In our view, it would be manifestly unjust to deny Howell credits for the units built or rehabilitated pursuant to these agreements.

Furthermore, to the extent that Elon is asserting that there are insufficient substandard units in Belmar and Freehold to justify the credits, its contention is completely without merit. As of September 2005, Belmar has already rehabilitated 58 units and another 17 were in the process of being rehabilitated. Belmar submitted a project plan which lists 91 low and moderate income applicants who are seeking to rehabilitate their homes. Thus, the record provides sufficient factual support for COAH's determination that the Belmar RCA will provide a realistic opportunity to rehabilitate the 86 units for which Howell was given credit.

There is also ample support in the record for COAH's determination that the Freehold RCA will provide a realistic opportunity for the construction or rehabilitation of 142 affordable housing units. Elon asserts that there are only 147 units in need of rehabilitation in Freehold. COAH disputes this number but the disagreement between the parties on that point is inconsequential. Freehold already has used the funds from the RCA to construct 138 new affordable housing units. It will rehabilitate only four units. Clearly, even under Elon's calculation, there are enough dilapidated structures in Freehold to rehabilitate the remaining four units needed to complete the RCA.

Elon's challenge to the Asbury Park RCA is similarly lacking in merit. We reject Elon's assertion that COAH erred by failing to require Howell to re-petition for substantive certification after it amended its plan to include the Asbury Park RCA. The record shows that initially Howell proposed to satisfy its "second cycle" need in part with RCAs for 270 units, specifically 86 units in Belmar and 184 in Freehold. Howell later decided to limit the Freehold RCA to 142 units and add the Asbury Park RCA with 102 units. The change to Howell's plan was neither substantial nor fundamental. Therefore, Howell was not required to re-petition for substantive certification.

The record additionally supports COAH's determination that the Asbury Park RCA provides a realistic opportunity for the rehabilitation of 102 affordable housing units. The City's building inspector performed a structural conditions survey. Some 783 units in the City were reviewed and it was determined that 380 units were in need of rehabilitation. It was also determined that 261 of those deteriorated units were occupied by low and moderate income households. Consequently, the record establishes that there is a sufficient number of units in need of rehabilitation to satisfy the Howell RCA as well as the other RCA's entered into by Asbury Park.

Elon argues that COAH improperly denied it an opportunity to investigate whether the person who surveyed the units in Asbury Park was qualified. Elon also contends that it should have been afforded an opportunity to determine whether enough individuals would participate in the proposed rehabilitation program. However, COAH's regulations require municipalities entering into an RCA to submit data to ensure that the project is implemented as planned. N.J.A.C. 5:91-11.7; N.J.A.C. 5:93-6.6. Asbury Park provided the required information and Elon was afforded an opportunity to comment on the City's submission. The information provided by Asbury Park was sufficient to support COAH's finding that the RCA would create a realistic opportunity for the creation of the 102 units or affordable housing transferred by Howell.

VI.

Elon next contends that COAH erred by waiving its rule limiting the number of credits that may be awarded for age-restricted units. COAH's rules provide that it may grant a waiver from any provision of its rules if it determines:

1. That such a waiver fosters the production of low and moderate income housing;

2. That such a waiver fosters the intent of, if not the letter of, its rules; or

3. Where the strict application of the rule

would create an unnecessary hardship.

[N.J.A.C. 5:93-15.1(b).]

Elon argues that COAH's findings fail to satisfy the requirements of the rule. We agree.

COAH's regulations limit the number of age-restricted units that may be credited toward a municipality's affordable housing obligation. N.J.A.C. 5:93-5.14 and N.J.A.C. 5:93-6.1(b). For sending municipalities, the number of units that may be age-restricted is calculated according to the following formula:

RCA sender = .25 (municipal pre-credited need - rehabilitation component - prior cycle credit - transferred or proposed RCA units) - any first round age restricted units.

[N.J.A.C. 5:93-6.1(b)(1).]

When COAH initially granted Howell's petition for substantive certification in 1998, it granted Howell a waiver of the cap on age-restricted units by deleting the rehabilitation component from the formula, which increased the age-restricted units in the plan by 38 units and provided credit for all 184 age-restricted units that had been built or were then under construction.

After the Township re-petitioned for substantive certification, Elon again objected to the waiver, arguing that with the deletion of the Weiner tract from the plan, there was "very little housing for the general low and moderate income population." Following mediation, the mediator recommended that the waiver be re-evaluated by a COAH task force, in view of the changes made to the Township's plan.

The matter was considered by a Task Force, which issued a report recommending that COAH re-affirm its earlier decision granting the Township's waiver of the age-restricted cap. The report stated:

Under the 2003 Plan, there is no increase in the number of age-restricted units proposed to be credited by the waiver (38 units), and there is a one-unit reduction in the number of age-restricted units and a reduction in the number of rental bonuses for age- restricted rental units. The waiver in the 2003 Plan is not for zoned units but for units that have actually been built and occupied, demonstrating the need for these age-restricted units. All the new construction in Howell's 2003 Plan have been constructed and are occupied (421 units) and Howell has completed the transfer of the funds for the RCAs with Belmar and Freehold Borough (228 units). Besides completing the rehabilitation component, the only element of the new construction component to be completed by Howell is the 102-unit RCA with Asbury Park.

The COAH Task Force noted that although there has been no change in the Plan upon which the original waiver was granted, the change is not substantial, and with the units already constructed and the funds for two of the three RCAs already transferred, the plan has demonstrated a realistic opportunity to provide affordable housing and has fostered the production of low- and moderate-income housing pursuant to N.J.A.C. 5:93-15.1(b). The Task Force further found that granting the waiver continues to meet the criteria outlined in N.J.A.C. 5:93-15.1 as the waiver fosters the production of low- and moderate-income housing through a range of affordable housing options, including rehabilitated units, group homes, family rental units, age-restricted rental units and RCA units. Moreover, the Task Force determined that the waiver fosters the intent, if not the letter of COAH's rules. The Task Force recommends that the waiver continue to be granted for Howell's 2003 Housing Element and Fair Share Plan and that the Township be permitted to include 183 age-restricted units in its plan.

In its resolution granting Howell substantive certification, COAH cited the Task Force's conclusions and found that the deletion of the Weiner site and the increase in the number of RCA units were not substantial changes in the plan. COAH determined that the waiver fostered the production of a range of affordable housing "including rehabilitated units, group homes, family rental units, age-restricted rental units and RCA units."

COAH's findings fail to establish grounds under N.J.A.C. 5:93-15.1 for the waiver. COAH found that the waiver fostered the production of low and moderate income housing through a range of affordable housing options. COAH also found that the waiver fostered the intent if not the letter of the rules. However, there is no evidence in the record for these findings. In 1998, when the waiver was first granted, the age-restricted units had already been built or were under construction. Thus, the waiver was not needed to foster the construction of affordable housing for senior citizens. Moreover, there is nothing in the record to show that waiver for the age-restricted cap fostered the production of other low and moderate income housing options under Howell's plan.

COAH's decision here also is at variance with its comments concerning the rule establishing a cap on credits for age-restricted units. When COAH adopted its "second cycle" regulations, it received the following comment and gave the following response:

COMMENT: The Council should increase the limits on senior citizen housing to at least 33 percent.

RESPONSE: The Council believes that the 25 percent requirement provides adequate protection to those low and moderate income senior citizen households that may be viewed as an at-risk population. It should be noted that senior citizens are eligible to occupy all low and moderate income units. The Council believes that increasing the limitation would have a negative impact on other segments of the low and moderate income population.

[ 26 N.J.R. 2307, comment and response 51 (June 6, 1994).]

In addition, COAH issued a publication entitled "Questions and Answers" in which it stated that the 25% cap on credits for age-restricted units had been adopted to ensure that there would be no negative impact on the housing needs of other segments of the population requiring affordable housing. COAH stated that it will:

entertain a waiver if, at a minimum, the municipality demonstrates that the number of age-restricted units is necessary to meet a regional housing need and where the proposed or certified plan provides for a wide array of affordable housing options including family units. Any request for a waiver must address the components of N.J.A.C. 5:93-15.1 and must provide specificity as to why that criteria have been addressed and met. COAH will consider the municipality's past exclusionary practices and the percentage of low and moderate [income] households in the age-restricted group in the municipality as compared to the housing region.

COAH will only consider granting a waiver in very limited and compelling circumstances that meet the above requirements.

Suffice it to say, COAH did not follow this analytical approach when it considered Howell's request for a waiver. The Township never demonstrated that an increased number of age-restricted units was necessary to meet a regional housing need. In addition, Howell's plan included an array of housing options but the number of units available for families was diminished by the additional age-restricted units. Furthermore, Howell never addressed the specific components of the waiver regulation and there were no findings by COAH as to the percentage of households in the age restricted group in Howell when compared to the region.

The record does not support COAH's finding that the waiver fostered the development of affordable housing. N.J.A.C. 5:93-15.1(b)(1). The record also does not support COAH's finding that the waiver fostered the intent of, if not the letter of the rules. N.J.A.C. 5:93-15.1(b)(2). In addition, Howell made no showing that denial of its request for a waiver would create a substantial hardship. N.J.S.A. 5:93-15.1(b)(3). We therefore conclude that COAH erred by waiving its regulation in this case.

VII.

Last, we consider Elon's contention that, if COAH's decision is reversed, COAH should be divested of jurisdiction and the matter transferred to the Law Division for a hearing on whether Elon is entitled to site-specific relief to construct its inclusionary development. We are convinced that such relief is not warranted.

In our view, the Township should be afforded an opportunity to amend its plan to provide an additional 38 units of affordable housing to address the shortfall resulting from our decision. Howell has the responsibility to determine in the first instance how it will satisfy its obligation for affordable housing. Hills Dev. Co. v. Bernards Tp., 103 N.J. 1, 22 (1986); N.J.S.A. 52:27D-311(a). We recognize that the proceedings on Howell's "second cycle" plan have been protracted but we are not convinced that COAH's erroneous decision to waive its regulation on age-restricted units justifies denying the Township opportunity to amend its plan to provide for the additional units.

Affirmed in part, reversed in part and remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction.

 

In its regulations, COAH established municipal affordable housing obligations for the "first cycle" from 1987 to 1993 and then for the "second cycle" which covers the cumulative period from 1987 to 1999. N.J.A.C. 5:93-2.1 to -2.20 and N.J.A.C. 5:93, Appendix A.

The number of units occupied by persons with low and moderate incomes was arrived at by multiplying the number of deteriorated units by 68.8%, which is the poverty percentage for the Asbury Park sub-region, as determined by the Center for Urban Policy Research at Rutgers University.

We note that Elon objected to the waiver and raised that issue in its appeal from the initial grant of substantive certification. In Elon I, we reversed COAH's decision on other grounds and did not address Elon's arguments on the waiver issue.

(continued)

(continued)

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A-1445-04T5

June 28, 2006