Court Decides Two Highlands Cases: TDR and Affordable Housing

northern view from High Point trail

[8/16/11 – updates note in text]

The Appellate Division today posted two opinions on the Highlands.

Initial news reports muddy the water, so I thought I’d post links to the decisions and do a brief post on my take.

The first decision resolved a challenge to the adoption of the Highlands RMP and the Transfer of Development Rights (TDR) program.

Basically, this legal attack reflects the fact that builders and landowners have long sought to force growth into the TDR “receiving area”.

They argue that without mandatory receiving areas(of sufficient size/density to accomodate all the development potential from the sending areas), that towns will resist increased growth/density, and there will be little demand for TDR’s. With little demand, the TDR program would not adequately compensate property owners.

But the Highlands Act is clear here and the Court rejected that legal challenge to the RMP and TDR program (but, frankly, in the final paragraph of the decision, the court did essentially agree with the builders/landowners’ economic policy logic and even expressed some sympathy, in almost anticipating a takings challenge. The court almost said: “our hands are tied here until a takings challenge is sustained”). 

The Court held that the TDR program was valid – and most importantly, the receiving areas were VOLUNTARY. Haha! Now the builders/landowners know why I loath voluntary market based programs! They don’t work!

This means that the TDR program can not mandate growth. That’s a significant victory.

The second decision involved a challenge by affordable housing advocates (the Fair Share Housing Center) to adoption of the Highlands RMP and affordable housing obligations under COAH rules.

I just read the decision. This initial news story gets it wrong.

This is no legal victory for Highlands preservation or water supply protections.

[Update: the Court merely restated current law. 

Under the Highlands Act, COAH must “take into consideration the [RMP] prior to making any determination regarding the allocation of  the prospective fair share of  the [affordable] housing need of any municipality in the Highlands region.” (decision at page 2).

The Court further stated that COAH is responsible, not withstanding the Highlands Act, for determining affordable housing obligations, but must take the RMP into consideration.

The Court did not specify how COAH must take the RMP into consideration or provide ANY criteria or standards for how COAH must balance environmental factors versus affordable housing needs. So this decision has nothing to do with how the RMP effects COAH and the environment and can not be spun as a victory for the environment or the Highlands RMP. – end update].

The portions of the decision upholding the Highlands RMP were procedural straw men and will have no impact on policy.

Importantly, at a time when the Christie DEP is seeking broad power to waive rules, the Court invalidated a COAH Resolution that waived compliance (concluding that a “waiver may not be invoked to implement wholesale changes in administrative rules” (@ page 24).

The court also struck down a COAH Guidance document for calculating fair share obligations in the 88 Highlands towns.

The affordable housing obligations calculated under the struck down Guidance document were based on the Highlands RMP.

Under a Corzine EO #114 and a Council/COAH MOU, Towns that agreed to conform to the Highlands RMP were given new COAH obligations, which were calculated based on the Highlands RMP. It turned out that those revised RMP based affordable housing obligations were significantly less than under the prior COAH third round rules.

[Note: the key text is found on page 19, where the Court invalidates how affordable housing obligation in the Highlands was derived:

The Guidance document attached to the August 12 2009 Resolution sets forth complex formulas by which a municipality in the Highlands Region preservation area can calculate its  “RMP adjusted growth projections“.  Those RMP adjusted growth projections appear to be substantially lower than the growth projections for the Highlands Region municipalities set forth in  the revised third round rules. This document specifically states: “This RMP Adjusted Highlands Growth Projection may be used in place of the COAH Projected Growth Share Obligation pursuant to [the revised third round rules] in [a Highlands Region municipality’s] Fair Share Plan submission”. [emphasis supplied]

The Court struck down this informal process under the Guidance document, finding that it was substantive and constituted a rule that required rulemaking procedures.

[Update/clarification – the Court previously struck down COAH Guidance in its entirety in a February 24, 2011 decision.]

Reading between the lines of what went on here that the court rejected,  it seems like the Corzine Executive Order #114 set up a wink and nod process whereby COAH and the Highlands Council offered towns an “incentive” to conform to the Highland RMP by alleviating or reducing their COAH obligations.

This seems to put affordable housing and growth management as competing objectives, and allows upscale exclusionary Highlands towns to block affordable housing by using environmental protection as a pretext.

But that’s not how it is supposed to work. Affordable housing is a constitutional obligation, but it does not trump environmental regulation and must be built in a way that protects the environment. 

The Court’s decision now puts COAH in the drivers seat, as the Court said that the Highlands allocations must be done pursuant to COAH rules.

The court pushed the reset button, and has given the anti-COAH but pro-growth/anti-regulatory Christie Administration a new bite at the apple.

It will be intersting to see now how they come down: whether Christie will adopt a policy of  exclusion of affordable housing in the upscale Republican Highlands, or pursue his pro-growth/anti-Highlands regulation policy.

For the Christie, a real Sophie’s choice!

[End Note – If I didn’t make this abundantly clear, let me try again: I think it is bullshit to pit affordable housing against the environment like this. I also think it is bullshit for environmentalists to applaud a process whereby Government schemes behind the scenes to use avoidance of affordable housing as an incentives to Towns to “conform” to a land use plan. ENGO’s should not applaud when the Council schemes to “dilute” affordable housing obligations, particularly in one of the wealthiest – and whitest - region’s of the state. ]