The next phase in the saga of affordable housing in New Jersey, as established by the state Supreme Court, has begun, and it's already shaping up to be a litigious and potentially expensive process.
Dozens of municipalities have filed papers asking the courts to prevent builders from suing them while they prepare affordable-housing plans.
An even larger number are joining forces to hire a Rutgers University professor to calculate how many units they will need to build.
Housing advocates, most notably the Fair Share Housing Center in Cherry Hill, are reviewing all of the filings and are already seeking to intervene in some of them.
And they will likely wind up in court contesting the municipal obligations being calculated by Professor Robert Burchell, co-director of the Center for Urban Policy Research at Rutgers.
"There is much more likely to be litigation if a town uses his numbers," said Anthony Campisi, a Fair Share spokesman.
"He got paid by the Christie administration to rejigger the numbers" when he calculated them last year for the now defunct Council on Affordable Housing, Campisi asserted.
Attorney Jeffrey Surenian, affordable housing counsel to 48 municipalities, said he sought out Burchell so that municipal officials would have the benefit of expert analysis to counter Fair Share's calculations of the number of housing units required, which are about three times larger than the numbers Burchell computed last year.
Surenian called Fair Share’s numbers "patently impractical and completely contrary to the public interest." Ultimately, the court will have to sort out the differences.
With the process just starting, it is unclear what direction the courts will take, or even whether judges will act on individual cases or consolidate them into groups or perhaps have one judge set obligations for all the municipalities. The only thing for certain now is that communities must fulfill any prior obligation remaining unbuilt when the 1999 rules expired, which the Supreme Court ordered.
Municipalities are racing to provide affordable-housing plans because the state Supreme Court ruled in March, on a motion from Fair Share, that COAH was "nonfunctioning" and stripped its authority to oversee low- and moderate-income housing efforts across the state.
The decision came 40 years after the court’s first decision establishing the so-called Mount Laurel doctrine, which holds that municipalities must provide their “fair share” of affordable housing. It returned to the courts the power to determine municipal affordable-housing obligations.
The issue is especially important here, as New Jersey was ranked the fourth-most-expensive state for housing last year by the National Low Income Housing Coalition, with six n 10 residents unable to afford their rent without creating an undue financial burden.
The court's order became effective earlier this month. During this initial 30-day period, through July 9, municipalities are able to go to court to seek approval for a housing plan that COAH had already approved or to submit a new plan and ask for immunity from lawsuits.
The court can grant that immunity while it considers the plan. If the court deems a municipality’s plan meets its constitutional obligation, it will continue to enjoy protection.
Winnie Comfort, a spokeswoman for the state judiciary, said that as of Wednesday morning, 28 municipalities had filed papers seeking immunity. Among those, according to Fair Share and the New Jersey Builders Association, are Colts Neck, Eastampton, Fanwood, Galloway, Hackensack, Marlboro, Monroe in Middlesex County, North Brunswick, North Hanover, Pine Beach, Pittsgrove, Roselle Park, Shrewsbury, South Orange and Willingboro.
Surenian was filing papers for another 40 municipalities Thursday. At least one judge in each of the 15 vicinages (the term for a court district) has been designated to hear these matters.
After this initial period ends, housing advocates, builders or other parties may go to court to try to force a municipality they believe has not met its obligation under the state Fair Housing Act to do so.
A judge could then order the municipality to accept a so-called builder’s remedy and accept higher-density development -- usually four market-rate units for every affordable unit.
There is trepidation among municipal officials about this process, which in some ways harkens back to the early days of Mount Laurel, before the Legislature created COAH.
"The court decision is a bit confusing, especially in terms of figuring out the best way for us to proceed," said Princeton Mayor Liz Lempert.
She said the borough has created a task force to evaluate vacant or soon-to-be empty municipal facilities to determine their possible suitability as affordable housing sites.
"We have long waiting lists for our current affordable housing units, and there is clearly a need for more affordable options here," Lempert said.
"It is my personal opinion that taking a regulatory responsibility away from a regulatory agency and placing it in a judicial environment is a recipe for trouble," said Bernards Township Mayor John Malay. "Other than the specific prohibition from using growth share, we are left to our own devices to determine how we should proceed. Every other municipality is faced with the same dilemma. The Mount Laurel judges will be receiving a patchwork quilt of plans. I don't envy them their job."
Bernards is one of dozens of municipalities hiring Burchell to calculate how many units of low- and moderate-income housing they need to provide.
Another is Mount Laurel, the South Jersey township synonymous with the affordable-housing battle in the state after the Supreme Court ruled it -- and all municipalities -- could not use exclusionary zoning to keep out low- and moderate-income residents and, in fact, had an obligation to provide its fair share of affordable units.
COAH hired Burchell last year to calculate municipal obligations as part of the new Third Round rules the council was preparing on the order of the state's highest court. His report estimated the total projected new need statewide over the next decade at about 31,000 units, with a total need -- including unfulfilled past obligations -- of 115,000 units.
By contrast, Fair Share's expert David Kinsey, a visiting lecturer at Princeton University's Woodrow Wilson School of Public and International Affairs, placed the prospective obligation at more than 200,000 units and the grand total -- including past and present unfulfilled -- at nearly 350,000 units.
Campisi said the complexities of housing laws that give bonuses for building certain kinds of housing mean the actual number of units built will be much lower.
Surenian, who argued before the Supreme Court in the case that led to the March ruling, said municipalities need their own expert to counter Fair Share's estimates, first released in April.
"Someone needed to take the bull by the horns so we could have another view," said Surenian, who worked on the particulars of a joint services agreement with several other lawyers who represent municipalities on affordable-housing issues.
In a May 19 letter to Bernards Township's planning board attorney, Surenian announced Burchell's availability and wrote: "Municipalities facing the prospect of entering a Court proceeding where FSHC and the NJBA will have an expert report setting forth their views of your responsibility now have the prospect of having its own expert report for the Court to consider."
The letter goes on to state that Burchell "has agreed to prepare an expert report within 60 to 90 days of being retained to establish his view of the proper way to determine each municipality’s fair share obligation."
Surenian anticipated that "at least 50 municipalities will sign up to retain Dr. Burchell so that the cost will be no more than $1,000 to $2,000 per municipality for the preparation of the report."
But Burchell stands to make a lot of money on this deal because he will be paid not just for the report, but also to testify as an expert witness.
Shared services agreements municipalities have been approving put the total cost of the report at $70,000. Surenian said on Wednesday that he is unsure how many had signed up because he has been busy preparing immunity requests due in court this week. A cursory Google search found at least 10 municipalities, in addition to Bernards and Byram, agreeing to hire Burchell. Campisi said as many as 200 may be considering joining that effort.
"At the end of the day, only those who sign up and pay will be able to call him as their expert in their case," Surenian's letter further states. "In addition to preparing an expert report, Dr. Burchell will need to prepare to testify, to be deposed and assist in deposing the FSHC/NJBA expert and possibly other witnesses and then to testify. The charges for these services will be on an hourly basis and will be in addition to those for the expert report."
According to the Municipal Shared Services Agreement on the Byram Township website, if Burchell testifies as an expert on behalf of the municipality, his fee will be $231 an hour.
Burchell did not return a request for comment.
"Professor Burchell is working on a research contract through the university," said Steve Manas, a Rutgers spokesman. "He will be calculating the housing unit requirements via his model. He has done the numbers many times previously for the state." He said he was unaware of how much Burchell would be paid.
Surenian said he negotiated an agreement between Rutgers University and the consortium of municipalities and expects that will be signed soon.
One benefit of signing onto the "Common Defense agreement," according to Surenian's letter, is "the ability to retain Dr. Burchell on a priority basis (as compared to communities who do not participate in the payment of his study) as a primary witness pursuant to a separate agreement between such community and Dr. Burchell. In addition, participating municipalities will be able to secure the benefit of a preliminary indication of the number as his report is taking shape."
Fair Share attorneys said last year that Burchell's estimates did not meet the Supreme Court's mandate that new housing rules follow essentially the same formula as the prior rules, which expired in 1999.
The court never ruled on the validity of those estimates because COAH did not adopt them -- instead, the council deadlocked 3-3, which is what precipitated the court's taking away its jurisdiction over the matter.
Fair Share’s lawyers also pointed out that Burchell wrote COAH's first attempt at Third Round rules, which the Appellate Division invalidated in 2007.
"We think that these towns are going to be really aggressive in trying to argue their towns' obligations down -- likely following Burchell's 2014 COAH methodology," said Adam Gordon, a Fair Share attorney. "We never got to the point of how good Burchell's numbers were. The court did rule that the numbers have to follow what was done in the prior round. He diverged from that substantially. We don't know if he is selling the exact same thing to the towns, or something different."
Surenian acknowledged the criticism of Burchell's 2014 estimates. He said the professor will have to take that into consideration as he calculates obligations for this new report.
Malay said Bernards Township, which is one of 60 municipalities statewide to be certified by COAH as having drafted an affordable-housing plan that meets its Third Round obligation, joined in hiring Burchell because of his expertise and the ambiguity about what is ahead.
"Given the uncertainty as to which methods of compliance will be accepted, the attitudes and decisions of different judges and the efforts of the Fair Share Housing lobby to influence those decisions in an extreme way, we thought it best to bring as many experts on board as we could," he said. "We are not looking for a lower obligation, since no obligation has been set for us. It is up to us to determine what we think is a fair number and submit to a judge how we will fulfill that obligation. In doing so, we hope that our plan will be accepted. After that, so long as we adhere to the plan, immunity from builder's suits will follow."
In his filings, Surenian is asking the courts to give municipalities immunity for five months after they find out their obligation, which could be as late as September.
Campisi said that seems to be a tactic designed to further delay the process of starting to build affordable housing again.
Surenian said it makes no sense to force a municipality to draft an affordable-housing plan without knowing how many units for which to zone.
"The position we have taken is eminently sensible to every citizen in this state," he said. "We shouldn't send towns into the planning process blind. If you don't know the rules, you're going to waste a lot of time and money for nothing ... I'm hoping the courts are going to be practical about this and see the sense in proceeding in a practical way."While municipalities are filing papers, little has been decided so far. In one instance, involving Monroe Township in Middlesex County, a judge agreed to give the township immunity through November 9 and set a schedule for hearing its defense of its plan and Fair Share's contention that its obligation -- capped at 1,000 units -- is less than half of what it really needs to provide. The judge also named a special master to help mediate any disputes among the parties.
Despite the uncertainty, advocates are confident the new affordable-housing rules will work better than what they have faced over the last decade with two sets of invalidated rules and, more recently, inaction by COAH.
Since taking office, Christie has taken a number of actions to try to eliminate COAH, and he vetoed in 2011 an affordable housing reform bill, calling it worse than “the current failed COAH system.” After that veto, the Legislature has done little to change the system, despite loud invitations from the court.