SHORELINE MANAGEMENT DEVELOPMENT & REALTY CO., INC., et al. v. NEW JERSEY COUNCIL ON AFFORDABLE HOUSING, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-002174-04T32174-04T3

IN RE TOWNSHIP OF OCEAN: MOTIONS OF

SHORELINE MANAGEMENT SEEKING TO DISMISS

TOWNSHIP FROM COUNCIL'S JURISDICTION;

ACCELERATE DENIAL OF TOWNSHIP'S RE-PETITION

___________________________________________________

SHORELINE MANAGEMENT DEVELOPMENT &

REALTY CO., INC., and THE PETITION

FOR SUBSTANTIVE CERTIFICATION OF THE

TOWNSHIP OF OCEAN, OCEAN COUNTY,

NEW JERSEY,

Appellant,

v.

NEW JERSEY COUNCIL ON AFFORDABLE

HOUSING, TOWNSHIP OF OCEAN, TOWNSHIP

COMMITTEE OF THE TOWNSHIP OF OCEAN,

and OCEAN TOWNSHIP LAND USE BOARD,

Respondents.

______________________________________________________

 

Argued September 20, 2006 - Decided October 27, 2006

Before Judges Stern, Collester and Baxter.

On appeal from the final decision of the

New Jersey Council on Affordable Housing,

COAH 04-1608.

Ronald L. Shimanowitz argued the cause for

appellant (Hutt & Shimanowitz, attorneys;

Mr. Shimanowitz and Jonathan G. Burnham, on

the brief).

George N. Cohen, Deputy Attorney General,

argued the cause for respondent New Jersey

Council on Affordable Housing (Anne

Milgram, Acting Attorney General, attorney;

Michael J. Haas, Assistant Attorney General,

of counsel; Mr. Cohen, on the brief).

Steven E. Yost argued the cause for respondent,

Ocean County Land Use Board (Haines & Yost,

attorneys for respondent; David A. Clark,

on the joint).

Andrew Bayer, argued the cause for respondents,

Township of Ocean and Township Committee of the

Township of Ocean; (Gluck Walrath &

Lanciano, attorneys for respondents;

David A. Clark, on the joint brief).

PER CURIAM

Shoreline Management & Realty Co., Inc. ("Shoreline") appeals from the Council on Affordable Housing's ("COAH") denial of Shoreline's motion to dismiss Ocean Township ("Ocean") from COAH's jurisdiction.

In denying the motion, COAH rejected Shoreline's contention that Ocean's petition for substantive certification was so deficient as to render Ocean ineligible for the protection that filing a petition with COAH affords under the Fair Housing Act ("Act"), N.J.S.A. 52:27D-301 to -329. While Shoreline's appeal was pending before us, COAH filed a motion to dismiss Shoreline's appeal as moot. We conclude that Ocean's filing of a petition for a third round substantive certification does not render moot Shoreline's appeal from COAH's decision on Ocean's second round filing. Accordingly we deny COAH's motion to dismiss Shoreline's appeal. We further determine that COAH's denial of Shoreline's dismissal motion was supported by substantial evidence and was not arbitrary or capricious. In re Borough of Montvale, 386 N.J. Super. 119, 129 (App. Div. 2006). We therefore affirm COAH's denial of Shoreline's motion to dismiss Ocean from its jurisdiction.

I.

The Fair Housing Act was enacted to implement the Supreme Court's holding in the Mount Laurel decisions. The Act provides that "every municipality in a growth area has a constitutional obligation to provide through its land use regulations a realistic opportunity for a fair share of its region's present and prospective needs for housing." N.J.S.A. 52-27D-302(a). The Act established COAH, and required COAH to adopt criteria and guidelines to satisfy that constitutional obligation. N.J.S.A. 52:27D-305.

The Act directs COAH, upon voluntary petition by a municipality, to review a municipality's housing element and fair share plan and to grant or deny, with or without conditions, substantive certification. N.J.S.A. 52:27D-307,

-314. A municipality which has submitted itself to COAH's jurisdiction through the filing of a petition seeking substantive certification of an affordable housing plan falls within the exclusive jurisdiction of COAH. Sod Farm Assocs. v. Twp. of Springfield, 366 N.J. Super. 116, 124 (App. Div. 2004). No exclusionary zoning litigation can be instituted by a developer against a municipality if that municipality has submitted itself to COAH's jurisdiction. N.J.S.A. 52:27D-316(b), Fair Share Hous. Ctr. Inc. v. Twp. of Cherry Hill, 173 N.J. 393 (2002). If, after reviewing the petition, COAH grants substantive certification, the municipality receives substantial protection from exclusionary zoning litigation because substantively certified municipalities are presumed to be constitutionally compliant. Toll Bros v. Twp. of W. Windsor, 173 N.J. 502, 514 (2002) (Toll Brothers III).

In contrast, if municipality has not filed a petition for substantive certification, it subjects itself to a builder's remedy, which, if granted, overrides a municipality's zoning ordinances. N.J.S.A. 52:27D-328.

Accordingly, if as Shoreline claims, Ocean's May 1, 2003 petition for substantive certification was so deficient as to render it a nullity, Ocean would lose the protection that the filing of its second round petition for substantive certification would have afforded, and plaintiff could pursue a builder's remedy in the Law Division.

II.

On May 1, 2003 Ocean filed a petition with COAH seeking second round substantive certification with COAH. No objections were filed by Shoreline within the forty-five day period established by N.J.S.A. 52:27D-314. Shoreline, which owns a 128 acre parcel in Ocean, filed a complaint in lieu of prerogative writ in the Law Division seeking a builder's remedy. The Law Division ruled that Shoreline's complaint would be held in abeyance pending Shoreline's filing of a motion with COAH seeking a determination of whether Ocean Township's petition was adequate and sufficient to invoke COAH's jurisdiction. Nearly ten months later, on August 6, 2004, Shoreline filed such a motion. On September 13, 2004, Ocean Township filed an amended second round petition with COAH. On November 22, 2004, COAH denied Shoreline's motion to dismiss Ocean from its jurisdiction. When the second round expired on December 20, 2005, Ocean would have been unable to remain within COAH's jurisdiction. N.J.A.C. 5:95-15.1(a). In anticipation of that pending expiration on January 13, 2005, Ocean submitted its third round petition to COAH, and Shoreline was granted objector status pursuant to N.J.S.A. 52:27D-314. In August 2005, Ocean filed a motion before us seeking dismissal of COAH's appeal based on Ocean's assertion that Shoreline's appeal was interlocutory. By Order filed September 19, 2005, we denied Ocean's motion to dismiss the appeal as interlocutory.

In support of its claim that Ocean's May 1, 2003 submission was a nullity, Shoreline points to Ocean's failure to include some of the supporting documentation required by the New Jersey Administrative Code.

Shoreline claims that Ocean failed to specify which parcels are most appropriate for construction of low and moderate income housing (N.J.A.C. 5:93-5.1(b)(6)); failed to provide a map of all sites designated for the production of low and moderate income housing (N.J.A.C. 5:93-5.1(b)(7)) accompanied by a listing of owner, acreage, lot and block (N.J.A.C. 5:93-5.1 (b)(7)); failed to specify the location and capacities of existing and proposed water and sewer lines and facilities relevant to the designated sites (N.J.A.C. 5:93-5.1(b)(8)); failed to supply copies of necessary applications for amendments to, or consistency determinations regarding, applicable area side water quality management plans including wastewater management plans (N.J.A.C. 5:93-5.1 (b)(9)); and failed to provide copies of New Jersey Freshwater Wetlands maps where available for identified lands (N.J.A.C. 5:93-5.1(b)(11)) and of United States Geological Survey Topographic Quadrangles for designated sites (N.J.A.C. 5:93-5.1 (b)(12)).

Shoreline further contends that the operative section of Ocean's second round petition submitted May 1, 2003, failed to specify the strategy Ocean would use to satisfy its present and prospective low and moderate income housing obligation. In particular, Shoreline asserts that Ocean's May 1, 2003 fair share plan consisted of nothing more than vague promises about what Ocean intended to do, combined with a listing of the generic tools available to any municipality. Ocean's fair share plan consisted of the following:

Rehabilitation Component

The Township will use Ocean County to undertake a continuing rehabilitation program with the Township to address its 18-unit rehabilitation obligation.

New Construction Component

The Township will address its 236-unit new construction obligation through a combination of the following methods: (1) a regional contribution agreement; (2) construction of new affordable housing units within the Edgemont, Village Center and Route 9 Redevelopment Areas; (3) the construction of age-restricted housing in the Township's proposed Village Center;

(4) the creation of an accessory apartment ordinance; (5) credits without controls; and (6) a development fee ordinance. The Township will also explore the Township's eligibility for credits without controls pursuant to COAH's regulations.

In urging COAH to dismiss Ocean from its jurisdiction, Shoreline argued:

The Township's fair share plan is so deficient and noncompliant with the rules and regulations of COAH, that it should be deemed as a non-filing. Accordingly, the Township of Ocean should not be afforded the protection that accompanies a valid submission to COAH thus invoking the substantial protections available to a municipality. In short, the Township has disparaged the COAH process and should not be allowed to benefit from its contempt of the process.

Were the Township of Ocean to be afforded the substantial COAH protection based upon its submission, such action would send a signal to other municipalities that they can simply throw together anything, term it a housing element and fair share plan, petition for certification and receive the protection of a COAH umbrella without the slightest plan or intention of actually providing affordable housing. Such action would render the Mt. Laurel decisions, the Fair Housing Act, and the COAH process a virtual nullity.

Shoreline also pointed to COAH's failure to issue a compliance letter in response to the first petition, or alternatively request that Ocean submit further documentation, as authorized by N.J.S.A. 52:27D-314, as evidence that COAH must have treated Ocean's May 1, 2003 filing as a non-event and the petition as being so inadequate as to be unworthy of any response.

In reply, Ocean argued before COAH that Shoreline was procedurally barred from seeking dismissal of Ocean's COAH filing because Shoreline had failed to object to Ocean's COAH filing within the forty-five day period specified by N.J.S.A. 52:27D-314. Ocean further pointed to the substantial efforts it had made shortly after the filing of its second round petition to meet its affordable housing obligations. As COAH noted in its decision denying Shoreline's motion to dismiss, Ocean's efforts included working with the Department of Community Affairs, Office of Smart Growth, to obtain Village Center designation for Waretown Village, preparation and adoption of development plans for three redevelopment areas where new construction of affordable housing would be effectuated, and approval of a regional contribution agreement with Neptune Township and enactment of a development fee ordinance.

After reviewing the submissions of both parties, including the reports of their respective land use planners, COAH denied Shoreline's motion to dismiss. COAH's opinion reasoned that:

[b]ased on the jurisdiction granted to COAH under the Fair Housing Act and the affirmation of that jurisdiction in the Appellate Division's recent decision in the Sod Farm Associates case, COAH maintains exclusive jurisdiction over Ocean Township's second round affordable housing obligation as a result of Ocean Township's voluntary filing of a petition with COAH seeking second round substantive certification from COAH. Ocean Township filed its petition on May 1, 2003, seeking substantive certification from COAH for Ocean Township's second round affordable housing obligation for the period from 1987-1999. The Township filed a re-petition with the Council on September 13, 2004, to reflect changes in its original affordable housing plan.

Pursuant to N.J.S.A. 52:27D-314, any municipality that has submitted itself to COAH's jurisdiction through the filing of a petition seeking substantive certification of an affordable housing plan, falls within the exclusive jurisdiction of COAH. This position has been asserted by COAH and has been upheld by the courts on a regular basis.

. . .

In this case, the issue before the Council concerns its exclusive jurisdiction regarding a municipality that is seeking substantive certification. Ocean's re-petition to the Council in September 2004 is of no consequence in determining the Council's jurisdiction over the Township's efforts to obtain substantive certification. Ocean's re-petition super[s]edes its prior petition, making that petition moot. Therefore, Shoreline's motion in regard to Ocean's original petition is also moot. However, the Council notes that Shoreline should be permitted to continue to raise any objections it has to the Township's re-petition. Shoreline has filed objections to the re-petition in a timely fashion and as a result, has been granted objector status to Ocean's re-petition.

III.

We first address COAH's motion to dismiss Shoreline's appeal as moot. We agree with Shoreline that it is entitled to a ruling on the merits of its claim that COAH's November 22, 2004 decision, maintaining COAH's jurisdiction over Ocean's petition, was arbitrary and capricious. If Shoreline is correct in its challenge to COAH's decision, then COAH's decision would be reversed and vacated. Were that to happen, Shoreline would be free to continue the Mt. Laurel litigation it filed in the Law Division in October 2003 and to there seek a builder's remedy. Stated differently, if Shoreline prevails in its attack on COAH's November 2004 decision, the later filing by Ocean of a third round petition for substantive certification on January 13, 2005, would be irrelevant because as of November 22, 2004, Ocean would be deemed dismissed from COAH's jurisdiction and from its protection. We therefore conclude that Ocean's subsequent filing of its third round petition does not negate Shoreline's arguments about the second round, and we deny COAH's motion to dismiss Shoreline's appeal as moot.

We turn to the merits of Shoreline's appeal from COAH's November 22, 2004 decision. COAH's denial of Shoreline's motion to dismiss Ocean from its jurisdiction must be affirmed if it is supported by substantial and credible evidence and is not arbitrary and capricious. Borough of Montvale, supra, 386 N.J.Super. at 129.

In denying Shoreline's dismissal motion, COAH determined that Ocean was entitled to submit an amended petition to COAH, such as the one Ocean submitted on September 13, 2004, to cure any deficiencies in Ocean's May 1, 2003 petition. COAH concluded that the amended petition "super[s]edes its prior petition, making the [first] petition moot." COAH also determined that in the exercise of its exclusive jurisdiction over a pending affordable housing plan, it is entitled to continue to work with a municipality and monitor the municipality's affordable housing activities even after the

petition is filed, and while the petition is undergoing review

by COAH's professional staff. In so finding, COAH rejected Shoreline's argument that COAH cannot consider anything other than the initial petition of May 1, 2003.

The method an administrative agency such as COAH uses to address an application pending before it should be afforded a strong presumption of validity and reasonableness. New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 561 (1978). As we determined in Sod Farm, supra, 366 N.J. Super. at 130, "[h]ow an agency chooses to implement legislation is the agency's primary responsibility, not the court's. We give agencies wide discretion in deciding how best to approach legislatively assigned administrative tasks, especially when the task falls within a particular agency's expertise. . . ." The Sod Farm decision emphasizes the strong State policy requiring exclusionary zoning disputes to be resolved through the COAH process rather than through litigation:

Courts have recognized and deferred to COAH's exclusive primary jurisdiction over Mt. Laurel compliance issues. [citation omitted]. . . Assumption by the courts of the agency's functions fosters the potential for mischief and the prospect of conflicting and contradictory results in the court system and in the administrative proceedings. Moreover, it would eventually lead to the court having to micromanage quotas and policies which the Legislature entrusted to COAH. . . . [C]ourts are ill-equipped to micromanage an agency's activities. . . .

Id. at 129-130.

In Sod Farm, we concluded that once a municipality files an initial petition with COAH, continuation of COAH's jurisdiction over the municipality's petition is warranted even if the initial plan was deficient. Id. at 125. Specifically, this court stated: "Clearly, the nature of COAH's legislatively mandated jurisdiction, the discretion and expertise involved, and the statements of legislative intent make waiver of the exhaustion of administrative remedies rule inappropriate where COAH is working with the municipality and reviewing its submission." Ibid.

In essence, as this court found, once the township "has subjected itself to COAH's jurisdiction by filing a housing element and fair share plan, the longstanding rule that administrative remedies must be exhausted prior to bringing the case to court is applicable." Id. at 124. The Sod Farm decision provides ample support for COAH's decision to permit Ocean to supplement its May 1, 2003 submission. Sod Farm makes it clear that COAH's acceptance of Ocean's amended second round petition in September, 2004 was neither arbitrary or capricious.

Any remaining doubt whether COAH's conclusion was arbitrary or capricious should be laid to rest by our decision in Elon Assocs., LLC v. Twp. of Howell, 370 N.J. Super. 475 (App. Div. 2004), certif. denied, 182 N.J. 149 (2004). There we squarely decided that COAH should maintain ongoing jurisdiction over

affordable housing petitions, even when they are deficient:

[E]ven though a municipality's initial compliance plan was deficient and the municipality had submitted a series of amended plans to correct those deficiencies and to revise the plan in various other respects, the legislative policy to assign primary responsibility for enforcement of affordable housing obligations to COAH mandated continuation of COAH's jurisdiction over the municipality's petition.

[Id. at 483]

Finally, we reject Shoreline's claim that COAH's failure to promptly approve the Township's initial petition somehow constitutes proof either of the deficiency of the petition or of arbitrary action by COAH. The argument that COAH should forfeit its jurisdiction over a municipality's fair share plan because of COAH's failure to either request Ocean to submit further documentation, pursuant to N.J.S.A. 52:27D-313, or to issue a compliance letter is the type of argument rejected by this court in Sod Farm. There, the plaintiff-developer argued that it should be allowed to proceed with a builder's remedy lawsuit in Superior Court because no action had been taken by COAH on a petition for substantive certification filed by Springfield Township despite the passage of a substantial amount of time. Sod Farm, supra, 366 N.J. Super. at 134. We rejected this argument, concluding that "Springfield's efforts to comply with the FHA should not be penalized by delay in COAH's administrative process." Id. at 128.

Here, Shoreline has cited no meritorious reasons why our decisions in Sod Farm and Elon Associates should be disregarded or distinguished. As those decisions make clear, COAH had not only the prerogative, but indeed had the duty, to work with Ocean and to accept any revisions, supplements or amendments that Ocean presented. The choices COAH made in deciding how to evaluate Ocean's initial filing, and the pace and timing of COAH's review of that petition, fall well within the broad discretion afforded to COAH under Sod Farm. Shoreline has been granted objector status on Ocean's third round petition, which as we note above (see fn. 2) includes any unmet second round affordable housing obligations. It is before COAH and through its mediation process, that Shoreline should raise any objections to Ocean's fair share plan.

Accordingly, because we determine that COAH's denial of Shoreline's motion to dismiss was not arbitrary and capricious, and was based on substantial evidence, we reject Shoreline's claims. Borough of Montvale, supra, 386 N.J. Super. at 129.

Affirmed.

 

Southern Burlington County NAACP v. Mount Laurel Township, 67 N.J. 151, cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975) (Mount Laurel I) and Southern Burlington County NAACP v. Mount Laurel Township, 92 N.J. 158 (1983) (Mount Laurel II)

COAH's regulations calculate a municipality's affordable housing obligation for specific time periods: The cumulative second cycle obligation includes 1987 to December 20, 2004. The third round regulations became effective on December 20, 2004 and require a municipality to propose an affordable housing plan from 1999 through 2014, which must also include any prior 1987-1999 cumulative second round affordable housing that has not been previously satisifed.

Although we do not revisit the issue of our denial of the motion to dismiss Shoreline's appeal as interlocutory, we have serious reservations about that decision.

(continued)

(continued)

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A-002174-04T3

October 27, 2006