Shift from COAH to State Courts Could be a Boon to Developers

On March 10, 2015 the New Jersey State Supreme Court issued a unanimous ruling allowing trial courts in the state, rather than the state Council on Affordable Housing (“COAH”), to decide if towns are providing enough low- and moderate-income housing.  The Court issued its decision after finding that COAH has repeatedly failed to establish new affordable housing guidelines.

The Court has delayed the implementation of its ruling for 120 days in order to allow parties to prepare “fair share” or “higher density” arguments.  Ninety days after the Court’s March 10th ruling, municipalities will have 30 days to file declaratory judgment actions seeking immunity from litigation.  Municipalities will need to show the court they have either (1) achieved substantive certification from COAH under prior iterations of the Third Round Rules before they were invalidated, or (2) had achieved “participating” status before COAH.  If at the conclusion of the 120 day period municipalities have not either filed for a declaratory judgment, or have not been granted immunity, “builder’s remedy” actions may be brought against the municipality.

Currently 314 of 565 municipalities in New Jersey have plans pending before COAH.  Developers and their counsel should remain vigilant as to how trial courts rule on declaratory judgment motions filed by these municipalities.  For developers seeking to begin real estate development projects in any of the 251 New Jersey municipalities that do not have plans pending before COAH, developers may seek the assistance of the courts after 90 days from March 10, 2015.

Time will be of the essence for developers as COAH can regain control of the process should they be able to create and approve adequate rules.  If you have any questions regarding how this decision may impact an existing or planned real estate development project, please contact a member of Lindabury’s Real Estate group.