2013 03 29 special master final compliance report

7/30/2019 2013 03 29 Special Master Final Compliance Report

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ELIZABETH C. McKENZIE ...P.P....P.A.COMMUNITY PLANNING AND DEVELOPMENT

9 MAIN STREETFLEMINGTON, NEW JERSEY 08822

TELEPHONE(908) 7825564TELEFAX(908) 7824056ecmcke@embarqma!l.com

REPORT OF THE SPECIAL MASTERFINAL COMPLIANCE REPORT

inLehigh Acquis it ion Corp. v. Township of Cranford. et al., Docket No.:UNN-L-0140-08, and Cranford Development Associates. LLC. et al . v.Township of Cranford. et al., Docket No.: UNN-L-3759-08

Township of Cranford, Union County, New Jersey

Submit ted toThe Honorable Lisa Chrystal , JSC

March 29, 2013

El izabeth C. McKenzie, AICP, PP License No. 33L100229400


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TABLE OF CONTENTS

INTRODUCTIONPage1

SUMMARY OF PROCEEDINGS TO DATE 2CRANFORD'S FAIR SHARE OBLIGATION 3CRANFORD'S PAST AFFORDABLE HOUSING ACTIVITIES 5CRANFORD'S PROPOSED COMPLIANCE PLAN

Repose Issues

12121516

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Prior Round ObligationRehabilitation ObligationThird Round ObligationAdministrative Issues

CONCLUSION 22

APPENDICES following page 26Fair Share Housing Center Letter of J une 5, 2012Appendix C of N.J .A.C. 5:97

CREDENTIALS following Appendices


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INTRODUCTION

This report evaluates the extent to which Cranford Township's amended Housing PlanElement and Fair Share Plan, scheduled for adoption on April 3, 2013, addresses andsatisfies the Township's known and anticipated fair share for low and moderate incomehousing.

It is the conclusion of this report that Cranford's 2013 Housing Plan Element and FairShare Plan ("the Plan" or "the 2013 Pian") addresses in full the Township's prior round(1986-1999) fair share obligation and its rehabilitation obligation calculated based onyear 2000 U.S. Census data and that the Township is eligible for a J udgment ofCompliance and Repose.

The Township's capacity to accommodate new development to meet a third roundobligation is severely limited, due to the lack of vacant and underdeveloped landremaining in the Township, and it is recommended that the Court approve anadjustment to the third round obligation based upon the Township's analysis of itsRealistic Development Potential (RDP) for meeting a third round obligation. Approval ofthis adjustment would not eliminate any additional third round obligation the Townshipmay have once new third round numbers have been assigned by COAH or a successoragency. If the third round obligation, once it is known. exceeds the Township's ability tosatisfy the obligation with its currently proposed affordable housing programs, then theTownship may have to further amend its Housing Element and Fair Share Plan toaddress the Unmet Need.

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SUMMARY OF PROCEEDINGS TO DATE

In J anuary of 2008, Lehigh Acquisition Corp. (Lehigh) filed a Mount Laurel lawsuitagainst the Township of Cranford alleging that the Township had failed to comply withits constitutionally mandated affordable housing obligations.

The property proposed for a builder's remedy by Lehigh was a 5.05 acre former Class IIrailroad property located at 555 South Avenue East (Block 511, Lot 1). The Lehighproperty had already been declared an area in need of redevelopment by the Townshipand a redevelopment plan had been adopted for it in J anuary of 2006 pursuant toN.J .S.A. 40A:12A-7. The Township's adopted redevelopment plan had permitted 80age-restricted condominium units, of which 9 were to be affordable. Prior to Lehigh'sfiling of the lawsuit, there had been a period of negotiations between Lehigh and theTownship during which time lehigh had presented proposals for a higher density ofdevelopment (and asked for removal of the age-restriction) but the density could not beagreed upon and the Township had not at the time consented to remove the age-restriction, so Lehigh sued, seeking the Court's approval for 186 units, with a 15% set-aside for affordable housing. Inaddition to the builder's remedy, Lehigh's complaintalso sought scarce resource restraints on land and sewer service capacity.

In November of 2008, while Cranford Township was still dealing with the Lehigh lawsuit,Cranford Development Associates (COA) filed a second Mount Laurel lawsuit againstthe Township of Cranford.

CDA is the owner of a 15.8 acre tract located at 215 and 235 Birchwood Avenue inCranford (Block 291, Lot 15.01, and Block 292, Lot 2). These lots were zoned 0-1;each contained an office building and associated parking lot(s). This tract had been thesubject of a hotly contested request for rezoning sought by a prior contract purchaser in2007. The rezoning sought in 2007 would have permitted a 128 unit age-restricted

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multi-family inclusionary residential development on the tract. That proposal failed togain municipal support (due to strong neighborhood opposition relating, primarily, todrainage and flooding concerns) and was ultimately withdrawn. The property ownersold the tract to CDA in 2008, and CDA made a number of unsuccessful attempts tohave the Township Committee consider its proposal before filing the lawsuit. CDA'slawsuit sought a 419 unit inclusionary residential project, with a 15 percent set-aside foraffordable housing.

The two lawsuits are captioned, respectively, Lehigh Acquisition Corp. v. Township ofCranford. et at, Docket No.: UNN-L-0140-08, and Cranford Development Associates.LLC. at al, v. Township of Cranford. et aI, Docket No.: UNN-L-3759-08.

Ultimately, the Township settled with Lehigh agreeing to a development of 163 units,including 24 low and moderate income housing units. A Consent J udgment approvingthe settlement was entered by the Court in J anuary, 2011, following a Fairness Hearingheld in November, 2010.

COA's proposal was the subject of a lengthy trial, and CDA was ultimately awarded abuilder's remedy permitting that site to be developed with 360 total units, of which 15percent, or 54, would be affordable to low and moderate income households. An Orderapproving the builder's remedy was entered by the Court on December 9,2011. As partof that Order, the Honorable lisa Chrystal, J SC, ordered Cranford to revise its HousingPlan Element and Fair Share Plan and adopt zoning regulations that would address itsfair share obligation.

CRANFORD'S FAIR SHARE OBLIGATIONAccording to the New J ersey Council on Affordable Housing (COAH), Cranford's fairshare obligation for the period between the end of 1986 and the end of 1999 is 148

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units. These 148 units represent an obligation for the construction of new affordablehousing units to meet regional low and moderate income housing obligations. TheTownship also has an obligation to provide for the rehabilitation of another 55 existinghousing units in Cranford that are already occupied by qualified low and moderateincome households, based on statistical data derived from the 2000 U.S. Census.In2008, COAH had also projected a third round "growth share obligation" for Cranfordof another 328 units, but the entire notion of using growth share as a means ofdetermining municipal low and moderate income housing obligations was invalidated bythe Appellate Court in 2010, so as of this writing, a growth share projection cannot berelied upon as a means of measuring Cranford's third round fair share obligation underthe 1983 Mount Laurel II decision and pursuant to the 1985 New J ersey Fair HousingAct.

In light of the void that currently exists at the State level with respect to valid regulationsfor the determination and fulfillment of municipal third round affordable housingobligations, it is not possible to assign Cranford a definitive third round fair shareobligation at this time. This does not mean that the Township does not have a thirdround obligation; it only means that the third round obligation has yet to be determined.

COAH never adopted revised third round Rules as it had been ordered to do by theAppellate Court in 2010, and it was subsequently abolished as a separate agency of theState of New J ersey under the Governor's Administrative Reorganization. TheAppellate Division ruled that the abolition of COAH was illegal and ordered itsreinstatement. In J une of 2012, the Supreme Court rejected the Governor's request tostay the Appellate Division's decision, effectively reinstating COAH. Nevertheless,COAH has yet to reconvene and resume its duties under the Fair Housing Act. The FairHousing Act invests COAH with certain powers and responsibilities, including thedetermination of municipal fair share allocations, which cannot be implemented unlessCOAH resumes its former role.

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The Appellate Division's 2010 decision invalidating large portions of COAH's third roundRules has been appealed, and the Supreme Court has accepted certification and heardoral argument, but it has yet to rule on the issues addressed by the Appellate Division.

In light of the uncertainty surrounding the assignment of third round affordable housingobligations, the focus of this report will be on Cranford's status with respect to its priorround affordable housing obligation as previously determined by COAH and therehabilitation share calculated by COAH based on the 2000 Census. Despite itsinvalidation of significant aspects of COAH's third round Rules, including thosepertaining to the calculation of the third round fair share obligation, the Appellate Courtspecifically upheld those portions of the Rules dealing with the prior round obligationand the rehabilitation share.

The report will also look at Cranford's capacity to address a third round obligation basedon its available vacant and underdeveloped land, and will evaluate the number ofpotential credits available to Cranford to satisfy both its Realistic Development Potential(as determined by the vacant land analysis) and any Unmet Need that may be found toexist once the municipal third round obligations have been issued by COAH or asuccessor agency.

CRANFORD'S PAST AFFORDABLE HOUSING ACTIVITIES

The Township of Cranford had not previously obtained approval of a housing planelement and fair share plan from COAH or from a Court. In fact, it adopted its firstHousing Element and Fair Share Plan in December of 2008, after both lawsuits hadalready been filed.The Township does have some affordable housing, however.

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Lincoln Apartments

The Lincoln Apartments is an older (pre-1980s) affordable senior housing project towhich another 100 age-restricted units were added in the early 1990's. The entireproject is Township-owned and all of the units are affordable one-bedroom rental units.While not all 100 of the newer units will be eligible for crediting in the prior round, due toa 25 percent cap on the use of age-restricted units to meet the fair share obligation, asubstantial number (up to 50) will be eligible, and some of the remaining units can beused to fulfill up to 25 percent of the third round obligation (or, assuming the vacant landadjustment is approved, up to 25 percent of the third round Realistic DevelopmentPotential (RDP) and up to 25 percent of the third round Unmet Need). The Appendix tothe Township's Housing Element and Fair Share Plan contains the documentationrequired in COAH's Rules as to the qualification of this project for crediting, and I amsatisfied as to the creditworthiness of the 100 age-restricted rental units constructed in1994.

Even though these units were partially funded with Low Income Housing Tax Credits(LlHTC), under IRS Code Section 42, which regulates the occupancy of these units fora period of only 15 years (or, in this case, until 2009), the owner, Cranford LincolnAssociates, L.P., has executed a Deed of Easement and Restrictive Covenant forExtended Low Income Occupancy which extends these restrictions for a minimum of 30years, even after the disposition of the project by the LlHTC partnership, or until at least2024. Moreover, the Township owns the development, and thus it is unlikely that thecontrols on affordability will ever be released.

There is a provision in COAH's Rules, at N.J .A.C. 5:97-4.3.h., which reads as follows:Any affordable units where funding was allocated for construction by the Low-Income Housing Tax Credit Program (Internal Revenue Code Section 42h) orBalanced Housing Program (N.J .A.C. 5:43 during the period beginning on or

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after December 15, 1986 and before J une 6, 1999, and not included in a HousingElement and Fair Share Plan submitted to the Council as of May 6, 2008, shallnot be eligible for credit against any portion of the fair share obligation.

Although I had been aware of this provision in COAH's Rules, the issue of its impact onthe creditworthiness of a LlHTC project has not arisen in any other municipality in whichI have had occasion to work, largely because either the towns with LlHTC projects hadfiled housing elements and fair share plans with COAH prior to the May, 2008, cut-offdate or there were no LlHTC projects that would have been in jeopardy. I becameaware of the potential impact on Cranford only after re-reviewing the documentationsubmitted by the Township in support of the Lincoln Apartments development andnoting for the first time the references to the LlHTC funding.

In researching the reason for this provision in COAH's Rules, I learned that COAH hadused all LlHTC-funded units in excess of those reported in housing elements and fairshare plans COAH had on file as of May, 2008, to reduce the recalculated Statewideneed for the prior round period (1993-1999) back down to the level originally calculatedso that itwould not have to increase municipal prior round obligations across the boardto reflect the fact that growth had occurred at higher rates than originally projected (in1993). This explanation is found in Appendix C of 5:97 (on page 133 - see Appendix tothis report). Itwas confirmed in COAH's Comment and Response document defendingthe Rules (40 N.J .R. 6004).

For two reasons, however, I believe that Cranford should be entitled to claim credit forthese units, despite the use of LlHTC funding to help create the 100 units built in 1994and despite the Township's failure to file a housing element and fair share plan withCOAH declaring these units.The first reason is that, in 2009, the Legislature adopted a provision in P.L. 2009, Ch.82, (C.45:22A-46.16), also known as the "Sarlo bill", that reads as follows:

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Determination of credits granted against fair share obligation.14. For the purpose of determining credits to be granted against the fairshare obligation of a municipality under the requirements ofP.L.1985, c.222 (C.52:27D-301, et al.) and the regulationspromulgated to effectuate that act, a housing unit financed inwhole or in part through the allocation of federal Low-IncomeHousing Tax Credits shall be eligible to be credited if therequirements of federal law pursuant to 26 U.S.C. s.42 have beenmet for that unit. In the event the federal requirements have beenmet, the provisions of the Uniform Housing Affordability Controlspromulgated by the New J ersey Housing and Mortgage FinanceAgency shall not be applied to inhibit or prevent the crediting of thehousing unit against the municipal fair share obligation.

(emphasis added)This portion of the Sarlo bill that was adopted by the Legislature and signed into law onJ uly 2,2009, was clearly intended to override COAH's Rule at N.J .A.C. 5:97-4.3h. Evenif one were to argue that the Legislature's override has undermined the calculation ofthe prior round need obligation and its action should therefore be invalidated, there is asecond reason for awarding Cranford credits for these units.

Cranford had the foresight to impose "at least" 30 year affordability controls on theseunits (15 years longer than the 15 year controls the federal LlHTC program calls for), sothat they will continue to provide affordable housing opportunities through 2024, andbeyond (as it is quite unlikely that Cranford would ever release the affordability controlson its own affordable housing development after having invested municipal funds tocreate these units). COAH's Rules (at N.J .A.C. 5:97-6.14) do permit municipalities toclaim new credits against at least the third round portion of the fair share obligationthrough the extension of affordability controls in accordance with N.J .A.C. 5:97-9 andUHAC, provided the unit meets the criteria for prior cycle or post-1986 credits set forthin N.J .A.C. 5:97-4.2 or 4.3 (subject to the Legislature's subsequent modification of aportion of 4.3); the affordability controls are scheduled to expire during the 1999-2018period (which they were), the unit continues to meet all code standards and the

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Township obtains a certified statement from the municipal building inspector to thateffect (not done, but certainly do-able); and that any necessary repair or rehabilitationwork shall be funded by the municipality, which may use its affordable housing trustfund for such purposes.

Should the Court have any issues with whether or not these units have had a properextension of affordability controls per N.J .A.C. 5:97-6.14, the Court could require aninspection and certification as to the compliance of the units with the UniformConstruction Code and could also require the municipality to certify that the controls onaffordability will remain in effect until at least 2039, although I do not believe theseactions are really necessary in this particular case, since the units are and have beenowned continuously by Cranford. In my opinion, the Lincoln Apartments units arecreditworthy and should be allowed to be used to help fulfill both Cranford's prior roundand third round fair share obligations.

Riverfront Redevelopers, LLC

The Township also has a 108 unit redevelopment project ("Riverfront Redevelopers,LLC") which will yield 19 affordable family rental units. The Redevelopment Plan for thisproject has been adopted, the redeveloper has been selected, the project has site planapproval and construction has begun. The 19 affordable units represent a set-aside of17.6 percent, higher than normally required for a rental inclusionary development. Ofthese 19 units, 5 will be one-bedroom units, 10will be two-bedroom units and 4 will bethree-bedroom units. The bedroom distribution is a bit high on the one-bedroom units,which is limited by COAH regulations to not more than 20 percent of the total, but thenumber of two and three bedroom units to be provided is consistent with COAHsrequirements of 30 percent and at least 20 percent, respectively. Itappears that two ofthe three "extra" affordable units (over the 15 percent minimum) will be one-bedroomunits. Apart from the two "extra" one-bedroom units in the Riverfront Redevelopers,

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LLC, project, it will, in all other respects, comply fully with COAH's requirements forcreditworthiness. As the project is currently under construction, and no deed restrictionhas, as yet, been filed for any of the affordable units, it is recommended that two of thetwo-bedroom market units be redesignated as affordable units, and that two of the one-bedroom affordable units be redesignated as market units.

Needlepoint Homes

There is also one (1) affordable housing unit that was approved by the Zoning Board ofAdjustment in the Needlepoint Homes development. The unit has been completed andis occupied, but not, apparently, by an income-qualified applicant. The Township istaking steps to correct this situation and will seek credit for this particular unit as part ofits plan to address its third round obligation, once the unit has been deed restricted for aperiod of at least 30 years, has been affirmatively marketed and is occupied by aqualified low income household.

Specia l Need s Housing

The Township has three group homes for persons with special needs within itsboundaries.

Unfortunately, the Township has been unable to obtain all of the information needed todemonstrate that two of these facilities (the two that are owned by Community AccessUnlimited or CAUl comply fully with all of COAH's Rules pertaining to special needshousing. Although there is every indication that these units will probably be found to becreditworthy, once all of the documentation is provided, I cannot at this time represent tothe Court that they are compliant with COAH's Rules. Consequently, I haverecommended that the Township continue its efforts to obtain the requisite

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documentation, applying any credits earned on the two CAU facilities against the thirdround obligation.

The SERV facility has been completely documented and is creditworthy. It is coveredby a 20-year capital funding contract with the State of New J ersey, Department ofHuman Services, as well as annual operational funding, and provides housing for verylow income adults ages 18 and over, who are referred to SERV by the Division ofMental Health Services. The unit of crediting for special needs shared housing facilitiesis the bedroom. The SERV facility includes three special needs bedrooms. It is thuseligible for three credits and also for rental bonuses on all three units (or bedrooms).

Rehabilitated Units

Union County operates a housing rehabilitation program for the benefit of its constituentmunicipalities. Although the County had allegedly rehabilitated 15 properties inCranford Township that are owned and occupied by low or moderate incomehouseholds, Cranford's consultants have determined, based on a closer inspection ofthe documentation available from the County, that these 15 units would not qualify forcrediting against the rehabilitation obligation. The Union County rehabilitation programis limited to owner occupants (it is not available to rental units) and does not meet someof the other criteria in the current Rules for rehabilitation crediting, such as the minimumexpenditure for hard costs, the necessity of involving a "major system" in the scope ofthe rehabilitation, and the imposition of affordability controls on rehabilitated units.Consequently, Cranford has accepted its responsibility to implement and fund arehabilitation program to address its entire 55 unit rehabilitation obligation.

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CRANFORD'S PROPOSED COMPLIANCE PLAN

Cranford's proposed compliance plan is embodied in its 2013 Housing Plan Elementand Fair Share Plan, which is scheduled for adoption on April 3, 2013. The 2013 Planutilizes the affordable units that will be generated by both of the plaintiffs' sites (Lehighand COAl as well as the affordable units that already exist or have been approved inCranford to address the prior round obligation and its Realistic Development Potentialfor fulfilling the third round obligation.

Prior Round Obligation

The Township proposes to use the following credits to fulfill its prior round obligation:

1. 50 age-restricted units at Lincoln Apartments. The 50 units of age-restrictedhousing is permissible based upon the formula set forth at N.J .A.C. 5:97-3. 1O(c)1,whichis 25 percent of the prior round obligation plus the rehabilitation obligation less anyrehabilitation credits). Since the Township is not claiming credit for any of the unitsrehabilitated as a result of Union County's rehabilitation program, it is eligible to claimcredit for 50 of its existing age-restricted units as part of its prior round compliance plan,based on COAH's formula. As previously indicated, the necessary documentation hasbeen provided demonstrating the creditworthiness of the Lincoln Apartments units, andthese 50 credits are acceptable.

2. 16credits for 19of the affordable units in the Rivenront Developers, LLC,project. All of the documentation needed to demonstrate the creditworthiness of the19affordable units in this development has been supplied. With the exception of thenumber of one bedroom affordable units, which exceeds by two units the limit set forthin COAH's Rules, this project complies with all of COAH's requirements. Since theTownship is only seeking prior round credit for 16 out of the 19 affordable units in the

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Riverfront Developers, LLC, project, the excess one-bedroom units can be among thoseexcluded from the prior round, and the 16 credited units (4 th~bedroom units; 3one-bedroom units and 9 two-bedroom units) will comply fully with COAH'srequirements and are acceptable.

3. 54 credits for the family affordable rental units to be constructed by CDAon the builder's remedy site. As this project was the subject of a lengthy trial withextensive site suitability documentation, no further documentation is needed to justifythe creditworthiness of this project, although the project will have to comply with UHACRules regarding administration, affirmative marketing and affordability controls, as wellas all provisions of the December 9, 2011, Order Granting Relief in Exclusionary ZoningLitigation, all conditions of site plan approval, and all requirements of N.J .A.C. 5:97-6.4pertaining to inclusionary developments. These 54 credits are acceptable.

4. 22 out of24 possible credits for the family affordable rental units to beconstructed by Lehigh on the settlement site. As this project was the subject of aFairness Hearing, and sufficient site suitability documentation was presented insupportof the settlement, no further documentation is needed to justify the creditworthiness ofthis project, although the project will have to comply with UHAC Rules regardingadministration, affirmative marketing and affordability controls, as well as all provisionsof the J anuary 28, 2011, Consent J udgment for Builder's Remedy, all conditions of siteplan approval, and all requirements of N.J .A.C. 5:97-6.4 pertaining to inclusionarydevelopments. All 24 of the units in this project are eligible for crediting, althoughthe Township plans to apply only 22 of the credits from this project toward theprior round.

5. 3 group home bedrooms (SERV). The three bedrooms in the SERV facilityhave been demonstrated to be creditworthy. In addition, they are eligible for rental

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bonuses at the rate of one bonus credit per unit (or bedroom), earning theTownship a total of six (6) credits for this project.

In the December 1, 2010, Supplementary Report of the Court Master to the Courtresponding to the testimony presented in the CDA trial, I had indicated to the Court thatI did not believe that Cranford was eligible for any rental bonuses arising from units thatwere built after 1999 in fulfillment of the prior round obligation. I had based this opinionon a strict reading of the Appellate Division's October 8,2010, decision invalidatinglarge portions of COAH's Rules, including its Rules pertaining to the award of rentalbonuses for rental units that had been proposed as a way to meet the prior roundobligation but that remained unbuilt more than a decade after the expiration of the priorround period.

At the time I offered my opinion to the Court, the Appellate Division's decision was stillrelatively new and was still being interpreted by other Court Masters and by otherSuperior Court J udges. Since the submission of my Supplementary Report, I have hadan opportunity to reconsider my original position in light of how the Appellate Court'sruling is being applied elsewhere, and I have modified it accordingly. It is now myrecommendation that Cranford be permitted to take rental bonus credits for eligiblecompleted affordable units (but not from affordable units that are proposed but remainunbuilt) up to the maximum number of units for which rental bonuses can be claimed inthe prior round, which is 25 percent of the prior round obligation or, in this case, 37units. Consequently, Cranford may claim rental bonuses for the three eligible grouphome bedrooms, since they exist.

Based on the foregoing projects and credits, which include the Court-approvedsettlement with Lehigh and the Court-awarded builder's remedy to CDA, it is myconclusion and recommendation to the Court that Cranford be found to be in fullcompliance with its prior round obligation of148units.

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Rehabilitation Obligation

As to the Township's 55 unit rehabilitation obligation, the Township is no longer claimingcredit for the 15 units rehabilitated by the County of Union. Thus, the rehabilitationobligation remains at 55 units. The Township proposes to establish its ownrehabilitation program, funded in part by any development fees the Township collects asa result of a newly proposed Development Fee Ordinance, in part by any outsidesources of funding the Township is able to access, and by Township funds or bondingto cover any shortfall. The documentation provided within the Housing Element andFair Share Plan includes a proposed resolution of intent to fund such shortfall, whichresolution sets forth a funding schedule for the rehabilitation program (at the rate of 11units per year for the next five (5) years beginning in 2014) as well as a draftDevelopment Fee Ordinance and a draft Spending Plan. The Township will commit byresolution to appoint a qualified rehabilitation administrator before the end of 2013. Adraft rehabilitation manual has been prepared by Cranford. The draft manual tracksCOAH's model. It is expected that the appointed rehabilitation administrator willcustomize the manual to Cranford's program before it is adopted by the governing body.

As long as the Township hires a rehabilitation administrator and adopts a customizedrehabilitation manual before the end of 2013 and fulfills its funding commitments, it isrecommended that the Court find Cranford to have created a compliant rehabilitationprogram. Cranford has indicated that it may implement a shared services program withone or more other municipalities in the same housing region. This is a perfectlyacceptable means of accomplishing a rehabilitation program, as long as the sharedservices program also complies with COAH's Rules with respect to funding,administration, program rules and procedures. Subject to the Township~stimelyfulfillment of a/Iof the conditions set forth in this paragraph, its proposedrehabilitation program complies with applicable requirements and isrecommended for approval by the Court.

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It is noteworthy that, even though the 2010 U.S. Census data should be available now,the Department of Community Affairs/COAH has yet to publish new municipalrehabilitation obligations based on these data. When the municipal rehabilitationobligations are updated based on the 2010 data, and new rehabilitation share numbersare issued, they will supersede those that were determined based on 2000 Censusdata, and Cranford's new rehabilitation obligation may rise or fall accordingly.

Third Round Obligation

The Housing Element and Fair Share Plan includes an analysis of Cranford's growthpotential based on its remaining vacant developable land.

The raw data pertaining to the vacant parcels of land in Cranford were assembled byT&M Associates and broken out by lots that are privately-owned and lots that arepublicly-owned but uncommitted to a public use. Birdsall Engineering revised theanalysis originally undertaken by T&M Associates and eliminated any sites ofinsufficient size to accommodate a development of at least five (5) units based on adensity of at least 8 units per acre (COAH's minimum presumptive density for sites inPlanning Area One, the Metropolitan Planning Area, in the State Development andRedevelopment Pian), unless the undersized sites were located adjacent to and ownedin common with other lands that could be merged to create a sufficiently sized parcel ofland. Additionally, sites were eliminated that were subject to known environmentalconstraints.

Birdsall Engineering came up with a total of 3.09 acres of land in two separate parcels(both made up of a number of smaller parcels). These 3.09 acres of land could, at adensity of 8 units per acre, yield a total of 24 dwelling units, five of them affordable,resulting in a Realistic Development Potential (RDP) of 5 units.

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It is not suggested that this 5 unit ROP will or should be the sum total of the third roundobligation assigned to Cranford. The Township could well be assigned a much higherobligation - depending on the methodology ultimately used. Ifthe Supreme Courtupholds the Appellate Court's ruling that growth share is not an appropriatemethodology to use in calculating third round fair share obligations, then Cranford willundoubtedly be able to rely on its vacant land capacity (its calculated RDP) to satisfy itsthird round obligation within the repose period. Any portion of the third round obligationultimately assigned to Cranford that the Township does not have the capacity toaddress within the repose period will remain as its Unmet Need obligation. The UnmetNeed is that portion of the obligation that may be fulfilled over an extended period oftime through opportunities that are not currently anticipated, such as privateredevelopment proposals.

Cranford will be able to fulfill its five (5) unit RDP with one of the Lincoln Apartmentsage-restricted units (which is less than 25% of the ROP), the Needlepoint Homes unit(once the occupancy and deed restriction issues have been corrected), the remainingtwo (2) Lehigh units and one (1) of the remaining three (3) Riverfront Developers, LLCunits. This is a total of five (5) units, all of which are rental units and only one of whichis age-restricted. Assuming that there will be an Unmet Need for the third round ofsome magnitude, the Township can apply some or all of the remaining two (2)Riverfront Developers, LLC, units and the remaining 49 Lincoln Apartments age-restricted units, subject, of course, to whatever rules and statutes will apply at that time.

Cranford cannot now access any rental bonus credits for units fulfilling the prior roundobligation that are not yet built. However, once the Lehigh, COA and RiverfrontDevelopers, LLC, projects are constructed, the Township may receive rental bonusesfor the units in these projects - but only up to the amount of the prior round rentalobligation (37 rental units). In Cranford's case, this would mean a potential to accessup to 37 rental bonuses less the 3 rental bonuses already taken for the three (3) SERV

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bedrooms, or 34 more rental bonuses. This would enable Cranford to rearrange itsallocation of units between the prior round and the third round, adding 34 rental bonuscredits to the prior round plan and moving 34 actual units from the prior round plan intothe third round plan to help address the Unmet Need.

Additionally, Cranford will have some time to attempt to document the creditworthinessof the Community Access Unlimited (CAU) special needs bedrooms, which couldproduce as many as 10 additional credits toward the third round Unmet Need, ifnecessary.

Finally, the Township could explore the development potential for the Myrtle Avenueand Grant/Arthur Streets sites and either sell these sites to one or more prospectiveinclusionary developers or find a developer/partner and sponsor one ormore municipalaffordable housing developments.

It is not necessary or even possible at this time to determine how far the Township willneed to go in addressing any third round Unmet Need, as we do not know what the thirdround obligation will be. What we do know is that the Township can satisfy its thirdround RDP, in addition to its prior round and rehabilitation obligations. It is suggestedthat within a specified time after the third round numbers are issued, Cranford berequired to return to the Court with an amended Housing Element and Fair Share Planthat quantifies its third round fair share obligation and that includes proposals foraddressing any Unmet Need it may have.

Administrative Issues

Cranford's Housing Element and Fair Share Plan includes (in Appendix F) a proposednew Affordable Housing Ordinance, which I have reviewed and find to be consistent

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with COAH's Rules and the Uniform Housing Affordability Controls (found at N.J .A.C.5:80-26.1, et seq.).

The Housing Element and Fair Share Plan also includes (in Appendix K) a proposedResolution adopting an Affirmative Marketing Plan covering all affordable housingprojects in the municipality (except those that are specifically exempted by Rule). Ihave reviewed the Resolution and find it to be acceptable and consistent with COAH'spolicies.

A proposed Development Fee Ordinance has been drafted for Cranford. It is includedin Appendix G of the Housing Element and Fair Share Plan. I have reviewed thisdocument, and find that it generally tracks COAH's model, although there are sectionsof the model that require a choice to be made between certain alternatives, and this hasnot yet been done by Cranford. The Township will need to decide whether it intends toopen an affordable housing trust fund or allow development fees and other affordablehousing revenues to be paid into the State of New J ersey Cash Management Fund. If itchooses the first option of opening an affordable housing trust fund, then the Townshipwill be required by COAH to enter into a three-way escrow agreement with COAH andthe Bank to give COAH access to the funds in the account in the event that funds arenot spent in accordance with an approved Spending Plan. Additionally, the Townshipwill need to decide whether to collect the entire development fee at the time theCertificate of Occupancy is issued or to collect half of itwhen the building permit isissued and the balance at the time of the C. of O. The Ordinance is also silent onwhether itwill charge a residential development fee on improvements to existingresidential structures and whether itwill charge a non-residential development fee (oncethe moratorium has been lifted) on changes or improvements to existing non-residentialstructures. Finally. limiting the applicability of an exemption (from payment of a fee) toonly owner-occupied residential structures that are demolished and replaced as a resultof a fire, flood or other natural disaster may not be constitutional.

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Appendix H of the Housing Element and Fair Share Plan includes a proposed SpendingPlan as well as a proposed Resolution of Intent to Cover any Shortfall in the funding ofits affordable housing programs (specifically. the Rehabilitation Program). TheResolution is ready for adoption. There are still a few editorial changes needed in theSpending Plan before itwill be ready to submit to COAH for approval (primarilychanging some of the tables to reflect a start year of 2013 and balances as of 2012).Apart from these editorial corrections. however, I believe that the Court can approve theSpending Plan for submission to COAH for its final review and approval.

Appendix L of the Housing Element and Fair Share Plan includes drafts of theOrdinance the Township will need to adopt to create the position of Municipal HousingLiaison and the Resolutions that will be needed to appoint both a Municipal HousingLiaison and an Administrative Agent. It also includes a draft contract with anAdministrative Agent that names Birdsall Services Group as the Administrative Agent.have reviewed each of these documents and find them to be in order. but I haveadvised the Township that itwill need to contract with an Administrative Agent that hasspecific experience in the field of affordable housing administration and that has beenaccepted by COAH as a duly qualified Administrative Agent.

It is recommended that the Court's approval of the Township's compliance plan beconditioned on the adoption of all of these Ordinances and Resolutions, subject tocertain changes being made to the Development Fee Ordinance and Spending Planbefore they are adopted and forwarded to COAH for review and approval.

Repose Issues

In the Supplementary Report of the Special Master dated December 1. 2010, I hadrecommended that the Court consider permitting Cranford to submit a revised HousingElement and Fair Share Plan covering not only the prior round obligation and the

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rehabilitation obligation, but a/so an "adjusted" third round obligation. The revised Planwould encompass the settlement with Lehigh, the CDA builder's remedy, some LincolnApartments units, the group home bedrooms, the Riverfront Redevelopers, LLC, units,and the Needlepoint Homes unit, along with a program for addressing the Township'sremaining rehabilitation obligation. Any "excess" new construction units from the priorround would be treated as third round units. Some or all of the remaining LincolnApartments units could also be applied to the third round Unmet Need, if there is one.

t had recommended this rather unorthodox approach in Cranford's case because of myconviction that no matter what the Township's third round obligation is determined to be,it is unlikely that the Township will be able to address it fully, and a vacant landadjustment will be warranted. Cranford would be able to rely on an extended repose (tothe end of 2018) now, would see an end to the litigation, and would have the ability tofocus municipal planning efforts and resources on other important local issues.

I had pointed out at the time that while itwould be a relatively simple matter todetermine what Cranford's adjusted third round number (or RDP) should be, therewould still be uncertainty regarding the extent of the Unmet Need once Cranford's thirdround obligation has been determined by COAH or a successor agency.

This issue of the uncertainty associated with the Unmet Need had been raised on behalfof Fair Share Housing Center in a letter to me from Kevin D. Walsh, Esquire, datedJ une 5,2012 (appended to this report). I do not agree with all of the argumentspresented by Mr. Walsh in support of his position that the Township should not begranted extended repose (or, indeed, any repose as to the third round obligation), and Ibelieve that he has misinterpreted the Court's December 9, 2011, Order and my originalrecommendation. The sixth point in his letter, that mechanisms for addressing theUnmet Need should be part of any third round plan, is valid, however. Since we do notknow the extent of the Unmet Need as this point, it is not possible to address it fully at

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this time, but the Township's Housing Element and Fair Share Plan does evaluate thepotential availability of credits to satisfy an Unmet Need, should there be one.

I remain convinced that it is appropriate for the Court to approve a third round vacantland adjustment with a calculated RDP of five (5) units. In response to the Unmet Needissue raised by Fair Share Housing Center, however, it would also be reasonable torequire Cranford to return to the Court or to COAH or its successor agency within a yearof the issuance of third round fair share numbers and present its proposals foraddressing whatever Unmet Need obligation itmay have based on the third roundobligation assigned to it. Meanwhile, Cranford should be able to proceed with theCourt's blessing to implement its RDP - which is that portion of the third roundobligation that the Township can readily satisfy within the repose period and that is notsubject to change. The plan to address the Unmet Need, once the third roundobligation has been quantified, can be reviewed and approved as an amendment orsupplement to the Court-approved Housing Element and Fair Share Plan on which theTownship's J udgment of Compliance and Repose is based.

CONCLUSION

Based upon my review of Cranford's 2013 Housing Element and Fair Share Plan, I ampleased to be able to recommend that the Court grant a Final J udgment of Complianceand Repose to Cranford subject to certain terms and conditions, each of which isdiscussed more fully in the body of this report. Should the Court concur with theseterms and conditions and make them part of the Order granting a Final J udgment ofCompliance and Repose, and should Cranford thereafter fail to satisfy any of theseterms and conditions within the time periods set by the Court, such failure could becomea basis for challenging the Township's continuing entitlement to Repose. As long asCranford continues to fulfill all of the terms and conditions of the Final J udgment, it is

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my recommendation that the Township be entitled to Repose as to both its prior roundand third round fair share obligations through December 31, 2018.

1. All inclusionary developments in the Compliance Plan will have to beappropriately deed restricted and administered by the Township's Administrative Agentto ensure that they comply with UHAC Rules regarding administration, affirmativemarketing and affordability controls and all other requirements of N.J .A.C. 5:97-6.4,pertaining to inclusionary developments. As well, the CDA development will have tocomply with all provisions of the December 9, 2011, Order Granting Relief inExclusionary Zoning Litigation and all conditions of site plan approval, and the Lehighdevelopment will have to comply with all provisions of the J anuary 28, 2011, ConsentJ udgment for Builder's Remedy, all conditions of the amended Redevelopment Plan forthat site and all conditions of site plan approval.

2. The Township shall adopt its new Affordable Housing Ordinance within 45 daysof the entry of a Final J udgment of Compliance and Repose.

3. The Township shall adopt its Affirmative Marketing Plan Resolution within 45days of the entry of a Final J udgment of Compliance and Repose.

4. The Township shall perfect and adopt its draft Development Fee Ordinancewithin 45 days of the entry of a Final J udgment of Compliance and Repose. Should theTownship elect the option of establishing an Affordable Housing Trust Fund, it shallenter into a three-way escrow agreement with COAH and the Bank. The DevelopmentFee Ordinance (and the executed escrow agreement) shall be forwarded to COAHwithin seven (7) days of the adoption of the Development Fee Ordinance and/or theestablishment of the Trust Fund, whichever occurs later, and no fees shall be collecteduntil COAH has approved these documents.

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5. The proposed Spending Plan shall be corrected and adopted by Resolution ofthe governing body within 45 days of the entry of a Final J udgment of Compliance andRepose. Similarly, the Township shall adopt the proposed Resolution of Intent to Fundany Shortfall in the moneys available for its affordable housing (rehabilitation) program,also within 45 days of the entry of a Final J udgment of Compliance and Repose.Approval of these documents by the Court is for the purpose of directing Cranford tosubmit them to COAH for review and approval, as COAH has exclusive authority toreview and approve Spending Plans for the disposition of funds from an AffordableHousing Trust Fund. Submission of these documents to COAH shall occursimultaneously with the submission of the adopted Development Fee Ordinance andexecuted escrow agreement addressed in condition 4. herein.6. The Ordinance to create the position of Municipal Housing Liaison and theResolution appointing someone to fill the position of Municipal Housing Liaison, as wellas the execution of a contract with a duly qualified Administrative Agent shall all occurwithin 45 days of the entry of a Final J udgment of Compliance and Repose. The costsof the Administrative Agent shall be paid by the owners of inclusionary developments oraffordable units for all services rendered in connection with their particulardevelopments or units.

7. The Township shall retain the services of a Rehabilitation Administrator andadopt a customized rehabilitation manual before the end of 2013 and shall continuouslyfulfill the funding commitments reflected in the approved Spending Plan and theResolution of Intent to Fund any Shortfall. Additionally, Cranford shall regularlyadvertise the availability of its housing rehabilitation program. As a minimum, fliersadvertising the availability of the program shall be included with the annual municipaltax bills. Nothing herein shall prevent the Township from entering into a shared

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services agreement for the administration of the rehabilitation program, as long as theprogram complies fully with COAH's Rules.

8. Cranford shall have an adjusted third round fair share obligation (ROP) of five (5)units. Inaddition, Cranford shall be required to return to the Court or to COAH (orCOAH's successor agency) within a year of the issuance of third round fair sharenumbers and present its proposals for addressing any Unmet Need obligation it mayhave based on the third round obligation assigned to it. The plan to address the UnmetNeed, once the third round obligation has been quantified, may be reviewed andapproved as an amendment or supplement to the Court-approved Housing Element andFair Share Plan on which the Township's Final J udgment of Compliance and Repose isbased.

9. In order for the remaining three units (not used to satisfy the prior roundobligation) in the Riverfront Redevelopers, LLC, project to qualify for crediting againstthe third round RDP, the filed deed restriction shall reflect the following bedroom mix forall 19 affordable units: a maximum of three (3) one-bedroom units, a minimum of four(4) three-bedroom units and twelve (12) two-bedroom units. This will require two of thetwo-bedroom market units to be redesignated as affordable units and two of the one-bedroom affordable units to be redesignated as market units.

10. Inorder to claim credit for the affordable unit in the Needlepoint Homesdevelopment against the third round ROP, the Township must ensure that when theaffordable unit is vacated by its current (non-qualified) occupant, itwill be affirmativelymarketed (for a period of 120 days), will be rented only to a qualified low incomehousehold at an affordable rent, and will be deed restricted as a low income unit for aperiod of at least 30 years from the time the unit is leased to a qualified low incomehousehold.

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11. If the Township is able to obtain all of the necessary documentation for the twoCommunity Access Unlimited special needs homes, it should be able to apply anycredits available for these facilities against any portion of the third round obligation.

12. Within 60 days of the entry of the Final J udgment of Compliance and Repose,the Township shall provide COAH with copies of all materials and records of the Courtproceedings needed for COAH to undertake annual monitoring of the implementation ofthe Housing Element and Fair Share Plan.

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FAIR SHARE HOUSING CENTER LETTEROF J UNE 5, 2012


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Peler J . O'Connor, Esq.Kevin D. Walsh, Esq.Adam M. Gordon, Esq.

Lauro Smith-Denker, Esq.FA J R 5 l- - IA R .E

HO US ING C ENTE R

J une 5, 2012Elizabeth C. McKenzie, P.P., P.A.9 Main StreetFlemington, New J ersey 08822

Re: Cranford Development Associates, LLC v. Township of Cranford, DocketNo. UNN-L-37S9-0S.Dear Ms. McKenzie:Please accept this letter as Fair Share Housing Center's (FSHC) comments regarding CranfordTownship's recently adopted fair share plan. FSHC, founded in 1975, is New J ersey's onlypublic interest organization dedicated solely to the preservation and growth of the Mount Laureldoctrine. We work to ensure that every municipality in New J ersey provides its fair share of low-and moderate-income housing in order to promote housing opportunities for all New J erseyansand racially and economically diverse communities. As you know, we appear regularly in MountLaurel proceedings as a plaintiff or objector or as part of a fairness hearing,We submit these comments without formally intervening in the above-captioned matter andwithout appealing Cranford's adoption on May 22,2012 of its fair share plan. We do sowith thegoal of avoiding the need for adversarial proceedings given that our prlnclpat concern is easilyaddressed as part of your review of Cranford's fair share plan and the Court's response to thatreport. We reserve our right to intervene and to file an action in lieu of prerogative writchallenging the Township's May 22,2012 adoption of a fair share plan.Our principal concern involves a court order indicating that Cranford will receive ten years ofrepose and, apparently, not have to comply with the Council on Affordable Housing's (COAH)Third Round regulations. The Honorable lisa F. Chrystal, J .S,C. by order dated December 9,2011 awarded Cranford ten years of immunity from Mount Laurel litigation, stating at paragraph6 that upon the adoption of the necessary implementing orders Cranford "will have satisfied,"among other things, "its prospective (post-1999) need obligation." The order further suggests(but does not explicitly state) at paragraph 12 that Cranford will receive immunity throughDecember 31, 2018. We object to these findings and urge the Court to adopt a revised positionthat does not adjudicate the Township's Third Round obligations or provide an extended periodof immunity for six reasons.First, we note that the builder's remedy did not rely in any way on the failure of Cranford to meetits Third Round obligation. Paragraph 1 of the December 9,2011 order states that Cranfordfailed to meet its Prior Round obligation by 54 units "regardless of what its prospective (post-1999) need obligation might be." The fact that the Third Round obligation was not needed todemonstrate the violation of the doctrine suggests that the prospective repose is unnecessaryand that Cranford should simply await the Third Round regulations. Further, anything that is notnecessary to the adjudication of the builder's remedy matter would appear to be properlysubjected to a fairness hearing at which the municipality's compliance with the doctrine isevaluated. A Prior Round builder's remedy need not and should not adjudicate Third Roundissues and thus unnecessarily exclude the public from the process.

510ParkBlvd.' Cherry Hill,New J ersey 08002856-665-5444' fax: 856-663-8182' WVvW.fairsharehousing.org


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June 5, 2012

Second, we note that as a practical matter, the Township is already planning to apply to reduceits obligation if it is assigned a lower Third Round obligation. The Township notes as muchrepeatedly in its fair share plan, stating, for instance, at page 4 that it "reserves the right toamend all portions of this Plan, including Prior and Third Round portions of the Plan and thethird round vacant land adjustment based upon any new affordable housing regulations,legislative action, or court decision." As framed by the Township, its ability to return to court is aone-way ratchet; the obligation can only go down during the next decade. The Township'sinterest in amending its fair share plan should cut both ways. Requiring the Township to file anamended fair share plan for the Third Round is thus consistent with the Township's overallexpectations.Third, demonstrating the practicality of requiring the municipality to return to court is that theTownship already acknowledges that itmust return to court when the new regulations areadopted because of incomplete details regarding part of its Third Round plan. Itwrites on page29 of its fair share plan that it plans to develop a nine-unit special needs development, howeverthe township has not provided sufficient information to demonstrate a realistic opportunity. Itsplan states that U[t]heTownship will provide a detailed Plan for addressing the 9-unit componentof its potential third round obligation upon the adoption of amended affordable housingregulations." In short, its existing plan is not intact and needs to be finalized. In light of the gapand the municipality's failure to provide sufficient credits, the court cannot grant repose.Granting credits for sites whose realistic nature cannot be determined would violate theAppellate Division's decision in In re Adoption of N.J .A.C. 5:96 and 5:97, 416 N.J .Super. 462,487-88 (App. Div. 2010).Fourth, the Township's Third Round obligation will change and in all likelihood will not be basedon the invalidated approach of growth share and the growth projection adjustment schemeauthorized by N.J .A.C. 5:97-5.6. Itwould be especially anomalous if the trial court immunizedCranford from litigation based simply on the remnant of a need allocation scheme that wasinvalidated by the Appellate Division. There is no reason to rely on an invalidated scheme whenthe municipality could simply be required to amend its fair share plan when new regulations arereleased.Fifth, numerous other courts have required municipalities to meet parts of their Third Roundplans and to likewise return to court or COAH when revised Third Round regulations arereleased. This approach was used in Cinnaminson, a matter in which you are involved as thespecial master and likely more than ten other matters in Burlington and Gloucester Counties.See, for example, attached orders. Those courts provide "immunity and repose againstexclusionary zoning litigation through the time for submission of a third round Compliance Plan,if any, once established by regulation, statute, or decision of a court with appropriatejurisdiction."Sixth, the Township has proposed no mechanisms for meeting what is likely to be a significantunmet need once the Third Round regulations are adopted. This is inconsistent with COAH'sregulations on unmet need, which are entitled to considerable deference. COAH does not"intend 'unmet need' to become 'a permanent adjustment to municipal affordable housingobligations.'" In re Adoption of N.J .A.C. 5:94 & 5:95,390 N.J . Super. 1,87-88 (App. Div.), certif.denied, 192 N.J . 71 (2007)(quoting 36 N.J .R. 5770 (December 20,2004)). Based on thatrepresentation and COAH's history of requiring plans to meet unmet need, the AppellateDivision has found that COAH's approach to unmet need met the requirements of the MountLaurel doctrine. Ibid. See also In re Fair Lawn Borough, 406 N.J . Super. 433, 445 (App. Div.

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June 5. 2012

2009) (noting in case inwhich COAH required overlay zoning that COAH "carefully scrutinized"a municipality's "plan to be sure the vacant land adjustment did not become a hollow promise").COAH has indicated that its regulations are intended to "require meaningful plans for unmetneed." 40 N.J .R 5965(a), 6005 (October 20,2008). It is also important to note that COAH andthe courts have taken the requirements that municipalities impose overlay zoning very seriously,going so far as exposing a municipality to builder's remedy litigation because it failed to providea mechanism to meet unmet need when directed to do so by COAH. See In re Fair Lawn,supra, 406 N.J . Super. at 444-45. This demonstrates that the adoption of overlay zoning is animportant part of the fair implementation of the Mount Laurel doctrine.We therefore respectfully suggest that you advise the court that the Township's fair share plandoes not entitle it to ten years of repose and that instead the municipality should be directed toreturn to court or to COAH when new regulations are adopted to demonstrate its compliance inthe Third Round with the Mount Laurel doctrine.Thank you for your attention to this matter.

Staff Attorneyc: Stephen Eisdorfer, Esq.Philip Morin, Esq.

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J U DG E B OOK B I N DE R Fax : 609- S1B - 2852 P .01e c 6 2 0 1 1 1 5 : 0 6

File No. 04719-0137Law OfficesPAlUCER M(CAY, P.A.9000 Mldlantic Drive, Suite 300P .O . Box 50 54.Mount Laurel, New Jersey 08054-1539(856) 596~8900A ttorneys for P etitio ner, T ow nship o f C innam inso n

F l E O w i t h t h e C o c r tD E C - S ' 2 0 1 1

R o a a I d ' ! . B o a i d a d . , AJ 10.

SuPERIOR COURT OF NEW JERSEYLAWDMSIONBU RLING TO N CO UN TYDOCKET NO. BUR-L-000476-06

IN THE MATTER OF THEAP PLICATION OF 1 1 IE TOW NSHIPO F C :IN NAMIN SO N) a m unicipalCorporation of the State of New Jersey,

C iv il A ctio n(Mount Laurel)

ORDER GRANTING STAY OFTHIRD ROUND PROCEEDINGSAND PROVIDING CONTINUEDIMMUNITY ANDREPOSE

Petitioner

TlD S MATTER having been b roug ht b ef or e tbe C ourt on the application ofPetitioner Township of Cinnam. ins~n e 'TownshipJl and/or ~Cinnami~') pursuant to theSuperior Court, Appellate Division' s decision inInth~Matt~Qf tJ y; Agoption QfNJ.A.C.5:96 and 5:971n' t i l l : New lruey Coweil on Aff9.rdable Ho~ (416 NL~. 462 (App,Div. 2010)~hereupoD the Court invalidated the revised third round growth share rulesadopted by the New Jersey Council on Affordable Housing ("COAH~) and directed COAHto complete new rulemaking and release revised third round fair share numbers for all NewJersey municipalities by March 8,2011;

And it appearing that the Appellate Division "declinejd] to issue a blanket stay ofP ro ce edin gs b efo re COAH or inthe courts pending completion of a remand to COAH" inview of "the fact that more than ten years have now elapsed since expiration of the second


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J U DGE B OOK B I N DE R Fax : 6G9 - 51B- 2852 D e c 6 2 0 1 1 1 5 : 0 7 P . 0 2

r ound r ule s" , Instead, th e Appe lla te C ou rt in dic ate d that" ... an y m un icip ality o r o th erinterested party m ay apply for a stay to CO AH or the Court inwhich a M 9unt Laurel case ispending, A ny such application should be decided in light of the status of the individualm un icip ality 's comp lian ce w ith its affo rd ab le h ou sin g o blig atio ns an d all o th er relev an tcircumstances." Ihld. at 512;

And it f u rthe r appea ring that th e S up reme Cou rt g ra nte d p etitio ns fo r c ertific atio nfiled b y variou s parties seek in g reversal of the 201 0 A ppellate D iv ision decision andth ereafter g ran ted a stay of C OAH' s M arch 8, 2011 rulem aking deadline and that none of the566 munic ipa li tie s inN ew Jersey currently have know ledge of th e m agnitude or nature of't he ir t hi rd r ound fair s ha re numbe rs ;

And it f ur the r appear ing that the pet iti on s f or c er ti fi ca ti on b ef or e the S up rem e C ou rtrem ain p ending and u ndecid ed w hich impedes th e ability of trial courts to dispose of the thirdro un d c omp lia nc e p ro ce ed in gs that are u nd er th e Court's jurisdiction;

And it f ur the r appear ing that COAH elected to stay the review of the th ird roundC om plian ce P lan s fo r th e m un ic ip alities u nd er its admin istrativ e rev iew ju risd ictio n inresponse to the A ppellate D ivisio n's 2 010 d ecisio n pend in g th~esolution of the appeals oftha t deci sion that we re fi le d with. th e S up rem e C ou rt;

And it furth er ap pearing that both C OAH and the C ou rt determ in ed during priorro un d affo rd ab le h ou sin g comp lian ce p ro ceed in gs that C in nam in so n is n earin g fu ll b uild -o utan d that vacant develop able land is a scarce reso urce inthe Township;

And it fu rth er a pp earin g th at th e G ov ern or issu ed A dm in istrativ e A gen cyR eorganization Plan N o. 001-2011 on June Z9~2011 w hich elim inated CO AH as the stateadmin istrativ e ag en cy resp on sib le fo r g uid in g m un icip al affo rd ab le h ou sin g comp lian ce

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J U D G E B O O K B I N D E R F ax : 6 09 - 5 18 - 2 85 2 Dec 6 2011 15: 09 P . 0 3

effective August 29,2011 and transferr~d the Obligation to assist municipalities with theiraffo rd ab le h ou sin g comp lian ce in itiativ es to th e N ew Jersey Department o f Commun ityAffairs ("DCA");

And it furtber appearing that DCA elected to continue COAH's prior stay of reviewof third round Compliance Plans until the disposition of the appeals pending before theSupreme Court;

And it further appearing that DCA b eg an im plem en tin g interim p olic ie s a ndguidelines on September 15, 2011 which were challenged and stayed by the AppellateDivision on October 18, 2011 through litigation filed by Fair Share Housing Center becausesaid interim policies and guidelines have the effect of rules which were not adopted inaccordance with the Administrative Procedures Act;

And it further appear ing , based upon (a) the Appellate Division's invalidation of therevised third round growth share rules, (b) th e rulemaldng stay ordered by the Supreme Courtand the pending undecided appeals of the Appellate Division decision, (c) the met that noneof the municipalities inNew Jersey know what their third round fair share obligations are, (d)th e Governor' s elimination of COAlI as a state administrative agency and the transfer of itsfunctions to DCA, (e) the stay of review of third round Plans implemented by COAH and itscontinued application. by DCA, and (f) the stay of the application of DCA's interim rules,policies and guidelines imposed by the Appellate Division on October 18, 2011; thatCinnaminson wilt not be able to comprehend what its affordable obligation is for the third

round and realistically prepare a third round Housing Element and Fair Share Plan(collectively "Compliance Plan") until the aforementioned issues are resolved by the courts,the Legislature and/or DCA;

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J U DGE B OO K BI N DE R F a x : f i O ~- 5 1 B - 2 8 5 2 D8C 6 2 0 1 1 1 5 : 1 0 P .O I !

And it fu rth er a pp ea rin g, d es pite the aforementioned c on fu sio n a nd tu rm o ilsu rro un din g th ird ro un d m un ic ip al affo rd ab le h ou sin g comp lia nce, that Cinnaminson hasb ee n d ir ec te d by th e C ou rt and t he Spec ia l Master to provide opportunities to m eet its as yetunquantiied third round obligation and has entered into an A greem ent w ith Lutheran SocialMinistries ("LSM") to co nv ey th e 2.7 5-acre C in nam inso n H om e p roperty on R iv erto n R oadthat the T ow nship acquired in 2005 to enable L SM to create 54 affordable units insatisfaction, inwhole or inpart, of the Township's third round fair share obligation when thatobligation is eventually e sta blis he d b y the judic ial , legis la t ive or ex ecutive branch es o fgovernment;

And it fu rth er a pp ea rin g th at the New Je rse y D ep artm en t o f E nv iro nm en tal P ro tectio ne'DEP ") h as taken the po sition th at the C innam inso n H om e parcel is considered byDEP tobe on the Tow nship's G reen A cres Recreation O pen Space Inventory ("RO SI") and m ay notbe u sed fo r affo rd ab le h ou sin g u nless the T ownsh ip In itiates th e G reen A cre s d iv ersio np ro ce ss ev en th ou gh the property was no t a cqu ir ed with G reen A cres O pen Space fu nding;

And it fu rth er ap pe arin g th at C in nam in so n d isp utes DE p s d eterm in atio n inthisre ga rd , wh ic h re su lte d inth e T ow nsh ip filin g Order to S how Cause proceedings ag ain st DE Punder D ocket N o. B UR -L-2688-11 (M ount L aurel) seeking a Court O rder com pelling D EPto remove th e Cinnaminson Home parcel from the ROSI so that the Township can conveythe property to LSM to facilitate th e co nstru ctio n o f S4 a ff or da bl e uni ts inth e th ird ro un d;

And it further appearing that the trial court in the a fo remen tio n ed p ro ce ed ing entered

an Order on September 28,2011 transferring th e m atter to th e A pp ellate Division;And it f ur the r appea ring that C in namin so n h ere to fo re te nta tiv ely a gre ed to convey a

v acan t lo t that it ow ns o n Inm an Street th rough tax fo re clo su re to Habitat f or Human ity,

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J U DGE B OOK BI NDE R F a x : 6 0 9 - 5 1 8 - 2 B 52 D e c 6 2 0 1 1 1 5 : 1 2 P . O S

Burlington County C~pter eHabitaf') to enable Habi ta t to construct two (2) affordableduplex units to apply against its unknown third round fait share obligation, but is nowimpaired in its ability to do so because that propertymay have to be added to the ROSllistand encumbered with a DEP-imposed open space restriction inexchange for DEP's.willingness to remove the larger Cinnaminson Home property from the ROS! to enable LSMto produce 54 affordable units;

A n d i t fu rt he r a p pe arin g t ha t t he a fo re m en tio ne d c irc um s ta nc es involving D EP andthe Township's ROS! negatively impact the Township's ability to produce affordablehousing on the Cinnaminson Home parcel and the Inman Street lot until the Townsbip' slitigation is disposed of by the Appellate Division and/or the Supreme Court.

Inlight of the foregoing the trial Court bas found and determined good cause hasbeen shown for entry of a stay of Cinnaminson Township' s third round affordable housingcompliance proceedings, dismissal of the Township's third round declaratory judgmentComplaint and providing extended inununity and repose against exclusionary zoninglitigation through the time for submission of a 1hird round Compliance Plan, ifany, onceestablished by regulation, statute, or decision of a court with appropriate jurisdiction.

IT IS, onhis _ _ _ _ ; { P = - + _ " _ _ day of D(q.e.m ~c _, 2011.ORDER.)ID as follows:

1. Cinnaminson Township's Petition for a Stay of third round complianceproceedings is granted subject to the Township's continued implementation of its Court-

t.AwomG approved prior cycle Compliance Plan.P4JUCl!IlJo'lcCAY,.A.

2. This case is hereby dismissed without prejudice. Cinnaminson Township isgranted extended immuni ty and repose against exclusionary zoning litigation through the

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J U DGE B OOK B I N DE R F a x : 6 0 9 - 5 1 t l - 2 S5 2 D e c 6 2 0 ' 1 1 5 : 1 4 P . OG

tim e for subm ission of a third round Compliance Plan, ifany, once established byregulation,statute, or decision of a court with appropriate jurisdiction.

3. Cinnaminson shall be freely permitted to refile with the Court for third rounddeclaratory judgment relief pursuant to NJ.S.A. 52:27D-313(a) once its third round fair shareobligation is known or, inthe alternative, m ay elect to invoke the DCA administrative reviewprocess pursuant to the Governor's June 29,2011 Reorganization Plan.

4. D CA shall continue to monitor, review a n d a pp ro v e the Township ' saffordable housing development fee ordinance, Trust Account and Spending Plan and the

Township shall file all required accounting balances and monitoring forms ..5. Cinnaminson may continue its efforts to compel DEP to permit the removal of

th e C in na m in so n H om e pa rce l f rom th e R OSI so that it m ay be u se d fo r a ffo rd ab le h ou sin gproduction purposes subsequent to the dismissal of the within proceedings and shall report tothe Master and Fair Share Housing Center on a quarterly basis regarding the status o f thiseffort. Inthe event the Township changes its course of action, it shall notify the Court.

6. T h e T o wn sh ip shall appoint a qual i f ied administrative agent byApril 1, 2012.7. T h e Townsbipshall cons ide r the bills of Elizabeth C. McKenzie, Special

Master, by December 23, 2011. The Township shall notify M s. McKenzie o f any questionson her bills by January 13, 2012. The Township shall pay those bills whi.c.hit does notquest ion by J a nuar y 3 1.2 01 2. n \."-'t.-..

RONALD E. BOOKBINDER. A.I.S.C.JUDGE'S CHECKLlST__ ---'-__ Opposed

Unopposed-----6 -.


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R E C E I V E D A U G 3 '1 2 0 1 1

JEFFREY R. SURENIAN AND ASSOCIATES, LLC ..... . . - : -~ : - i : . : : - I " ;~ ;~ : !~ \ ; : 0 '. I : :~~~ ~ :n : \Brielle Galleria \ V \ J ~( ;" , ; , U ~ : : {~j;!~, ..,,'I.~'\707 Union Avenue, Suite 301 \ \Brielle, NJ 08730 \ F I J t': , i 9 2 . U i t(732)612-3100 \ ." ''''' ~Attorneys for the Borough of Swedesboro I, . ", .J ('(')1 i , : : - ~ - r 0':: \~:~).I ;'llcli=RIUf\ ~! .. ~ ',. '" ", ,. ~ .: :J~ .. , """ ,,, .' '1-~~';'"'. I" , l "'" , : : (. L0 r: r)U~'J, ' .v". ..'L,.~..":-...~"~'~~.... & _ . , ., .' .

SUPERIOR COURT OF NEW JERSEYLAW DIVISION: GLOUCESTER COUNTYDOCKET NO. L-2233-08In the Mattei' of the Application of theTownship of Swedesboro, County ofGloucester

Civil Action(MOUNT LAUREL)

ORDER GRANTING PIUOR ROUNDJUDGMENT OF COMPLIANCE ANDREPOSE AND STAY OF THIRD ROUNDOBLIGATIONS

Whereas, the Borough of Swedesboro ("Borough") adopted a Housing Elementand Fair Share Plan ("Affordable Housing Plan") in December of2008; and

Whereas, the Borough filed the Affordable Housing Ph1 with COAH and broughta declaratory relief action seeking approval of said plan 'pursuant to N.J.S.A. 52:27D-313;and

Whereas, 11 0 objections were filed with respect to the Affordable Housing Plan;and

Whereas, tile Court entered an Order on December 5, 2008 granting the Boroughtemporary immunity from Motmt Laurel lawsuits; and


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Whereas, tile Appellate Division decided In re the Adoption of 5 :96 and 5:97 onOctober 8, 2010; and

Whereas, the Court invalidated the growth share component of eachm unicip ality's fair sh are obligation an d validated the rehab component and prior cyclecomponent of the fair share obligation; and

Whereas, the Appellate Division specifically contemplated that a stay would beappropriate under certain circumstances because of its invalidation of the round threeregulations and various other regulations:

[Ajny municipality or other interested party may apply for a stay toCOAI-I or th e co urt in which a M ount Laurel case is pending. Any suchapplication should be decided in light of the status of the individualmunicipality's compliance with its affordable housing obligations andall other relevant circumstances. InRe Adoption of N . .T.A.C. 5:96 and5:97 by the New Jersev Council on Affordable Housing, 416 N.J. Super.462,476 (App. Div. 2010) (emphasis added).Whereas, several municipalities resp on ded to th e A ppellate Division's invitation

for towns to move for a stay; andWhereas, on December 8,2010, COM! granted all of the motions, and issued a

resolution in favor of the six towns that took a ctio n; a ndWhereas, COAH eliminated the need for a municipality to file a motionfor a stay if the municipality was not seeking to stay its rehab and priorcycle components of its affordable housing plan; "Whereas, ... goingforward municipalities are not required to seck a stay from COAHpl'oceedingsconcerning third round prospective growth shareobligations"; andWhereas, the Borough sought a stay of its third round obligation from the Court

on November 24, 2010; andWhereas, the Court has adopted an alternative procedure which was

recommended by the master, Phil Caton, in light of the Appellate Decision and reflected

2

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in this Court's Case Management Order on June 3, 2011. Under this procedure the COUlthas considered the Borough's application for a slay in light of the status of its satisfactionof its rehabilitation and prior cycle fair share obligations and the extent to which it ismaking a reasonable effort to address its - as yet unspecified - third round obligation.

Whereas, the Case Management Order required a hearing on: 1) the Borough'sapplication f O T a judgment of compliance and repose on the Borough's rehabilitationobligation and prior round obligation; and 2) the Borough's request for a stay on its thirdround obligation; an d

Whereas, the Case Management Order further required the Borough to provide a45 day notice of the hearing to local housing advocates and Fair Share Housing Center;and

Whereas, the Case Management Order further required the submission by theMaster of a Master's Report by July 20, 20 II and required any objections to theBorough's applications to be submitted in writing to the Court, the Borough and theMaster by July 27, 2011; and

Whereas, i t also required the Borough to make the changes to it s AffordableHousing Ordinance as requested in the Master's Report dated January 18,2010; and

Whereas, on June 16, 2011, the Borough submitted its application for a priorround judgment of compliance and repose (hereinafter "JOR") and stay of its third roundobligations to the COl.Ut; and

Whereas, the Borough made those docu!,nents available for public inspection andprovided public notice in the Gloucester County Times of the availability of thosedocuments and the hearing date; and

3

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Whereas the Borough also prepared a letter enclosing a copy of that legal noticeto Fair Share Housing Center, the known affordable housing advocacy groups in theregion and all developers in the Borough who expressed an interest in affordable housing;and

Whereas, 110 objections were received , although Fair Share Housing Centersubmitted a Jetter dated July 28., 20 I I which did not object to tile relief sought, but ratherobjected to the logic employed by the Borough in seeking a stay; and

Whereas, the Master issued his report On July 20, 2011 ("Report"); andWhereas, the Report acknowledged the Borough's 9~un.it rehabilitation obligation

and 23-un.it prior round obligation; andWhereas, as to the rehabilitation obligation, the Report recognized tbe Borough's

participation in the Gloucester County Rehabilitation program, and recognized 8 creditsresulting therefrom; and

Whereas, the Master recommended the granting of a waiver of the $10,000average per-unit rehab cost because, among other reasons: 1) the $9,379.00 average perun.it cost was a de minimus departure from the $10,000.00 per uni t requirement; and 2)the Borough had exceeded the average cost requirement on its separate RCA rehabpr0I;.TfW11 with Woolwich; and

Whereas, the Master deemed the rehabilitation obligation satisfied as long as tileBorough agrees to rehabilitate an y rental unit not covered by the County program untilsuch time us the Borough completes its rehabilitation obligation; and

"Whereas, the Master also deemed the 23-urut prior round obligation satisfied withsix (6) senior rental units from the King's Way apartments which have already been

4


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constructed, one (1) bonus rental credit from the Kings Way apartments; and eighteen(I8) affordable units from Valley View Land Company, Inc.; and

Whereas, the Master recommended that the Affordable Housing Plan be revisedto satisfy the prior round obligation in the manner set forth above; and

Whereas, the Master recognized two surplus units from Valley View and the 30surplus credits from King's Way Apartments to be carried over to future housingobligations; and

Whereas, the Master recommended spending plan approval and required theBorough to conduct monitoring of its affordable housing trust fund using the CTMsystem to ensure that funds are properly tracked; and

Whereas, th e Master approved th e revised Affordable Housing Ordinance andrequired th e Borough to adopt an Affirmative Marketing Plan; and

Whereas, the Master also required a resolution appointing an affordable housingadministrator and a contract with an affordable housing administrator when the VaJleyView affordable units are ready for occupancy; and

Whereas, the Master also required a for-sale operating manual for Valley Viewwhen the units when the units are ready for occupancy; and

Whereas, the Muster also recommended the grant of a third round stay noting thatthe Borough has credits for more than twice its prior round obligation (55 credits VS. a23-unjL obligation); and

Whereas, the Master concluded his report by recommending: 1) approval of theplan subject to the six conditions noted therein; 2) that the period of repose and immunityfrom exclusionary zoning litigation run until the municipality's deadline for submission

5

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of a third round Pail' Shore Plan pursuant to revised third round rules or a deadline createdby revised third round rules or the New Jersey State Legislature; and 3) a stay of planningfor implementing a Fair Share Plan for the third round obligation; and

Whereas, the Borough (appearing through Donna A. McBarron, Esq.), the Masterand Fair Share Housing Center (appearing through Kevin Walsh, Esq.) participated in ahearing before the Court OL l August 3 , 2 01 1 at 1 :3 0 p .m .; and

Whereas, no party objected to the relief sought by the Borough, although FairShare Housing Center reiterated its concern regarding !he logic employed by the Boroughin seeking a s t ay; an d

Whereas, in view of the foregoing, the Court's review of the documents submittedinto evidence identified on the Table of Contents attached hereto as Exhibit "A," aconsideration of the arguments of th e B oro ug h and the comments of FSHC and aconsideration ofthe report and testimony ofthe Court appointed master,

It is on thjs').~ay of August 2011 ordered as follows:l , The Borough is entitled La a judgment of compliance and repose on its

rehabilitation and prior round obligations.2. The Borough shall rehabilitate any rental unit if rehabilitation is requested (to

the extent the County program remains closed to rental units) until such timeas the Borough completes its rehabilitation obligation.

3. The Borough Planning Board shall adopt and amended Affordable HousingPial] to satisfy tbe prior round obligation inthe manner indicated i.n Table I of

the Master's Report, including the maximum permitted bonus credits, within90 days of the date of this Order.

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4. The Borough shall conduct monitoring of its affordable housing trust fundusing the CTM system to ensure that funds are properly tracked.

5. The Borough shall adopt an Affirmative Marketing Plan, via resolution of theGoverning Body, to set forth t he a ff ir m ati ve marketing requirements within9 0 d ay s of the entry ofthis Order.

6 . The Borough shall adopt the revised Affordable Housing Ordinance within 90days of the date o f th is O rd er.

7 . The Borough shall adopt a resolution appointing an affordable housingadministrator and enter into a contract for same prior to the Valley View unitsbeing ready for occupancy.

8. The Borough shall prepare an operating manual for sale units on the ValleyView project prior to the units being ready for occupancy.

9. The Borough's Spending Plan (revised September 14,2010) is consistent withthe third round substantive rules, N.J.A.C. 5:97-8; however, approval of theS p en din g P la n must be g ra n te d by COAH or its successor.

10. The Borough is granted a stay of its third round planning obligation subject tot he B o rough maintaining tbe current zoning of the Valley View property ..

11. The Borough shall remain immune from exclusionary zoning challenges andbuilder's remedy suits until the time for submission of a third roundc om p lia nc e p la n, ifany , is establish ed b y regu latio n, statute or decision of acourt with appropriate jurisdiction, provided that immunity will be extendedupon the filing by the Borough of a duly adopted and endorsed housingelement and fair share plan for the third round for such time as COAl-I, the

7


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DCA Commissioner or the Court, with the input of its Master, may deemappropriate.

12. The Borough shall submit annual reports to the Court and Master, with a copyto Fail Share Housing Center, on the status of the rehab obligation and theValley View project commencing on the one-year anniversary of the entry ofthis Order.

13. Valley View Land Company, Inc. shall pay tile sum of $9,675.00 to ClarkCaton Hintz within 30 days of the entry of this Order for services owed in

connection with the Valley View project.

Anne McDonnell, PJ. Ch.

8


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APPENDIX C OF N.J.A.C. 5:97


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AppendixCCOUNCIL ON AFFORDABLE HOUSING (COAH)PRIOR ROUND AFFORDABLE NEED UPDATED METHODOLOGYCONTENTS

INTRODUCTION

THE ADJUSTED BASE

DEMOLITIONS

FILTERING

RESIDENTIAL CONVERSIONS

REACHING AN UPDATED PRIOR ROUND AFFORDABLE HOUSING NEED

Prepared byWHARTON GIS LABUNIVERSITYOF PENNSYLVANIAPHILADELPHIA, P APr in c ip a l Con su lt an tsSUSAN MWACHTER, Ph.D.PAUL AMOSPRA VINMATHURKENDRA GoLDBASKAREN BECKPOOLEY, Ph.D.MAy 1, 2008

. 127


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INTRODUCTION

As part of this effort, researchers also reviewed prior round obligation numbers and updatedthose numbers based on the latest data available for measuring secondary sources of supply.Replicating the existing methodology with updated data (described in detail below) increasedmunicipalities' collective prior round obligation by 992 units in comparison to the 1993unadjusted obligations. COAH is adopting municipalities' unadjusted 1987to 1999obligations,first published in 1993,which totaled 85,964,as shown in this Appendix. These are the numbersunder which municipalities received substantive certification for their second round newconstruction obligations (prior round obligation). The methodology description below detailsthe process researchers undertook to validate and update (where indicated) the prior roundobligation numbers.THE ADJUSTED BASE

In 1993,COAH released municipal-level affordable housing obligations that consisted ofIndigenous Need plus Reallocated Present Need plu

2013 03 29 special master final compliance report

Documents