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Appeals Panel’s Top Judge Scolds COAH for Stalling on New Municipal Quotas

jose fuentes
State Appeals Court Judge Jose Fuentes

An angry New Jersey appellate panel yesterday considered a number of actions -- including threatening a state agency with a finding of contempt -- to force the Christie administration to promulgate affordable-housing regulations in a case the lead lawyer said is unprecedented in testing the strength of the court.

It's unclear what action the three-judge appeals panel will take, but what was very clear was the judges' impatience and annoyance with the lack of action by the Council on Affordable Housing to set municipal housing quotas as ordered by the Appellate Division of state Superior Court and the state Supreme Court.

Appellate Division Presiding Judge Jose Fuentes repeatedly asked why COAH representatives haven’t met and what the council has been doing -- and the judge was not satisfied with the answers he received.

"COAH has not met to do anything that we ordered them to do," Fuentes said. "Why hasn't this agency met, not a person, not the commissioner, why hasn't this agency met and said, 'We need to address what the Supreme Court ordered, what the Appellate Division ordered in 2010?'"

Fair Share Housing Center was in court to argue its motion asking the Appellate Division to appoint a special master to write the housing regulations that COAH has failed to draft in what the organization’s attorney, Kevin Walsh, called "an outrageous, flagrant disregard of this court's order."

Last September, the Supreme Court struck down the state’s most recent affordable- housing regulations and, barring any legislative action, gave COAH five months to establish new quotas using a method similar to the one it used in the 1980s and 1990s to ensure that municipalities provide their fair share of low- and moderate-income housing. That affirmed an October 2010 appellate decision invalidating COAH's so-called "third-round" rules, which were based on future municipal growth.

"The very integrity of the judiciary is at risk if this court allows this agency to get away with what it has just done," said Walsh, referring to the council's refusal to follow the Supreme Court's order. "If that sounds overly dramatic, I apologize, but I don't think it is."

He called COAH "fundamentally dysfunctional" and uninterested in promulgating rules that comply with the Supreme Court's so-called Mount Laurel rulings.

"The appointment of a special master is unprecedented," Walsh conceded, "and while that's true, so is the outrageous disregard of a court order to this degree for this long unprecedented."

Fuentes said he was "a little hesitant as an appellate, intermediate court" to pronounce COAH broken and replace it with another system. He questioned whether such a move would be usurping power from the executive branch.

"What we're suggesting is the court enforce its order. When a government agency disregards a court order, it is not a separation of powers violation," Walsh said, citing actions taken by courts in the late 1950s to desegregate schools in Little Rock, Arkansas. "That was a civil rights issue, which is what this started as and what it still is today."

Fuentes acknowledged the uniqueness of the case at the start of the 90-minute hearing. He also made clear -- in his comments and in his questioning of Deputy Attorney General Michael C. Walters, representing COAH -- that he was annoyed over COAH's continued inaction despite several rulings made over the course of more than a decade.

When Jeffrey Kantowitz, a Totowa attorney specializing in land-use and zoning issues, searched for a word to describe his own feelings about the situation, Fuentes suggested, "Indignant?"

He seemed to share that feeling, when he asked Walters several times why COAH has not held a meeting and he did not get a straight answer to his question.

"My anger is not directed at you," Fuentes told Walters.

He explained that the appellate division had made clear -- in its ruling last year involving the state's effort to take some $165 million in municipal affordable housing trust funds to help balance the budget -- that the full council needs to take action, not just its director.

"It seems to me that the staff is taking a lot of unilateral liberties about doing things and the board seems almost perfunctory," Fuentes said, "like the staff is really running the show and the board meets to rubber stamp whatever they do."

Fuentes also grew tired of Walters' continually answering questions by saying the state's position is that the appellate division does not have jurisdiction to hear Fair Share's motion; Walters argued that only the Supreme Court should be able to hear the motion since it ruled last, when it overturned COAH's housing regulations last September.

"This is not a press conference," Fuentes admonished. "At a press conference, you ask a politician a question and they will give you their talking points. Even if you ask them, 'Is today Wednesday?' they will tell you the same thing over again. Please don't do this again."

Walters argued that since COAH asked the Supreme Court for an extension of its September ruling that the council promulgate new housing rules within five months, it cannot be said that COAH failed to act until the Supreme Court rules on that extension.

The state filed that extension request at 4:09 p.m. last Wednesday, which was the deadline by which COAH was to have written new rules. In its request, COAH stated it would formally propose regulations by May 1 so they could be published in the June 2 issue of the New Jersey Register, a requirement for all state rules.

Fuentes countered that since the Supreme Court upheld the Appellate Division's order of October 2010, COAH had five months from then to put forth regulations and was well past that deadline.

Attorney Edward Buzak, representing the New Jersey State League of Municipalities, said it "would have been nice" if COAH had proposed regulations by the deadline, to which Fuentes agreed, "That would have been nice."

Since that did not happen, but COAH has suggested an alternative schedule, Buzak suggested the appeals panel "hold them to it, but don't appoint a third party to usurp the agency that was created to eliminate what precisely now my adversaries in this case propose."

Walters said that COAH staff has been reviewing and updating data.

"Big deal," Walsh said. "They have done nothing for five months, except possibly peruse the Census website."

Walsh contended that allowing COAH to go ahead and propose rules on May 1 and let that process continue could mean new rules won't be in place until 2020.

"I am a pretty optimistic person, but ... I don't think they would be very good regulations that would be very true to Mount Laurel," Walsh said.

In supporting his call for a special master, Walsh said the methodology already exists to set new housing obligations using the rules used twice before to calculate the housing quotas. State law requires that those quotas be updated periodically. Walsh said a special master could calculate these updated quotas in 30 to 60 days.

In arguing for a special master, Kantowitz said low- and moderate-income residents have been treated poorly for too long.

"The protected class demands better and doesn't deserve to be treated as a doormat the way COAH has treated it as a doormat for 14 years," he said. "It's inexplicable that this agency can hold up an entire field of jurisprudence by its willful inaction."

Barring that, Walsh suggested the court remove the protection from lawsuits that COAH has provided to those towns that have agreed to abide by its rules. That would open municipalities up to a potential "builder's remedy."

Under the "builder's remedy" sanctioned by the Mount Laurel II ruling, a developer can ask a judge to set aside the zoning of a municipality that is not meeting its affordable-housing obligation and get approval to build development in which 20 percent of the units are set aside for low- and moderate income residents.

Walsh said municipalities should be allowed several months to apply to the court for approval of plans to provide affordable housing and be deemed immune from lawsuits.

"Our concern is that going case by case, you end up taking more time and the effort -- which is what I think it is -- to undermine the Mount Laurel doctrine succeeds" because of the amount of time it takes to set housing quotas and get units built, Walsh said.

While seeming to rule out the proposal for a special master, Fuentes asked questions about throwing the issue of affordable housing into the courts.

And he floated another option: Order COAH and each of its members to meet soon or be held in contempt of a court order.

It's still unclear what action the appeals panel might take. But Fuentes promised to take some action quickly.

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