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Caylen Payne Dr. Keating UST 609 Planning Law 5/6/2013 An Overview of The Mt. Laurel Saga In 1975 a case was brought against the township of Mount Laurel New Jersey that was to have a lasting impact on social welfare, affordable housing, and civil rights that remains hotly contested to this day. Beginning with the civil rights movement of the mid 60’s America had begun to turn its attention to the less fortunate and often discriminated members of its society. While the movement initially began with an emphasis on racial discrimination, by the end of the decade and the creation of the Fair Housing Act (Title VIII of the Civil Rights Act of 1968), civil rights had expanded in order to accommodate the myriad of other unjust social institutions of the era, in this case housing. While the FHA was not the first such act, (indeed California led the way in 1963 with the Rumford Fair Housing Act, which was eventually upheld by the United States Supreme Court in 1967 with the defeat of Proposition 14 in Reitman v. Mulkey,) it was still the first time the U.S. Federal government stepped in and provided a framework for housing equality. Of course one huge caveat remained, how to enforce and regulate this often ambiguous mandate. The first Mt. Laurel case, Mt. Laurel I was brought against the township by the Southern Burlington County NAACP on behalf of all low-income African-American peoples who had been denied the opportunity to build decent housing for themselves due to Mt. Laurel’s large-lot zoning ordinances. While most of us in the planning field are aware of exclusionary zoning practices, such as large-lot zoning, this was still a hotly debated issue at the time, with even
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Justice Hall stating first that, “There cannot be the slightest doubt that the reason for this course, large-lot zoning, of conduct has been to keep down local taxes on property…).1 He goes on to state that no non-fiscal considerations were taken into place when this code was developed, and was therefore a result of the current tax-structure under New Jersey law. It is even questionable that Justice Hall at no point brings up race in his first opinion in Mt. Laurel I, instead relying on accessibility and economic issues to point out that it may be impossible for the lower paid industrial and municipal employees of the region to actually live where they work. His decision to exclude race on behalf of diversity also brings up the sensitive situation of the region’s demographics. By sidestepping race and focusing on economic class, the region’s majority lowincome white population stood to be the dominant beneficiary of any new laws created from Mt. Laurel solely on the basis of numbers. While this side-note may not make or break Mt. Laurel it is still interesting to note. Whatever Justice Hall’s intentions were, the court decided in favor of the plaintiffs and ruled that the township’s zoning ordinances made it “economically and physically impossible” to create low and moderate income housing within the township.2 Of course the devil is in the details and Mt. Laurel I was no exception. Among the various shortcomings of the decision were such issues as: How to define low and moderate-income households, less than 50% of area median income was the accepted standard for low-income households at the time, but would this keep up with population growth and increased scrutiny? Additionally Justice Hall adverted to the then current paradigm that municipalities must “make realistically possible an appropriate variety and choice of housing.”3 This, in addition to the fairshare and region vs. developing municipality question, left everyone wondering exactly what 1 PCLD (459) 2 http://njlegallib.rutgers.edu/mtlaurel/aboutmtlaurel 3 PCLD (461)
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was meant by “realistically possible”, and “fair-share”. While the court’s decision was definitive, it lacked depth and clarity and perhaps any real, applicable remedy to the problem at hand. It would not be until 1983 with a second Mt. Laurel (II) that things became a little more tangible, however as we know even this second supreme court ruling would not stop the litigation, debate, and turmoil that has continued to this very day. Due to the ambiguity and lack of administrative remedies in Mt. Laurel I, a second case involving six separate appeals was brought before the Supreme Court in 1980 and finally in 1983 the court ruled in what has become known as Mt. Laurel II. While the first ruling relied on localities and municipalities to simply “comply”, ML2, was more about remedies and solutions. Obviously these were not all-encompassing solutions but still paved the wave for subsequent legislation, litigation and further controversy. One of the first positive aspects of the ML2 remedies was the distinction between “developing” areas and those designated as growth regions by the State Development Guide Plan. This was a step in the right direction in that it handed control over to long-range planning and development guidelines created by professionals in determining which areas had to comply with the “fair-share” guidelines. With this step forward came a step back in the appointment of a three-judge panel that would handle subsequent litigation produced from the decision. While at first glance this makes sense, seeing as it keeps the lower courts clear of costly court cases, it still does not put power back in the hands of elected officials, or planning professionals. If the first remedy was to satisfy the need for improved coordination and continuity of the decision making process the second one surely took a step backward in laying the groundwork for even more litigation and judicial intervention in what many other states and municipalities have decided is a legislative affair. The “builder’s remedy” of ML2 was intended to provide relief for those developers who had exhausted all
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attempts to gain site approval for low-moderate housing projects, but did little more than create costly and prolonged court battles, some of which continue to this day.4 Of course Mt. Laurel II was only yet another chapter in the saga that is New Jersey’s affordable housing conundrum; however it did yield concrete results in terms of providing for the framework to move forward. By moving forward I mean yet again back to the courts. Due to the hundreds of developer suits that came to court the New Jersey legislature enacted the New Jersey Fair Housing Act of 1985 which in turn spawned the creation of a state agency, the infamous Council on Affordable Housing, or COAH. The goal of COAH was to establish 10 year obligation goals for local governments as well as the power to certify plans adopted by said municipalities, thus granting them immune to builder’s remedy litigation.5 Before delving into COAH and the myriad of events that bring us up to the current state of affairs, it is necessary to note some of the more interesting aspects of the fair housing debate that ML2 brought up. The first of which is the removal of excessive restrictions and exactions as to remove barriers to affordable housing for New Jersey’s poor. While at first glance this seems like obvious political rigmarole, it might have more far reaching consequences then originally intended. It is assumed that several factors go into housing prices, including the price of the land, the actual cost of development, and the meeting of local regulations and provisions, for which the later can make or break certain projects. Given the chance to build most developers will if there is a profit to be made, and in the case of the West-Coast and North Atlantic states most did, but in turn shuffled off the cost of meeting regulatory requirements to the tenants, those of which
4 http://njlegallib.rutgers.edu/mtlaurel/aboutmtlaurel 5 Mt. Laurel and Perils of Social Policy
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like the low-medium income class became excluded.6 It took until 1991 with the publication of a federal advisory report on Removing Barriers to Affordable Housing for this issue to be fully addressed but yet it still remains an issue given that a 10% reduction in housing prices may benefit the rich more than the poor given the ratio of housing prices to household income. However intriguing this issue is, there are two others from ML2 that still echo in planning law to this day. The first of which is the affirmative measures remedy which states basically that a municipality must actively seek ways to incentivize their fair share of affordable housing by providing for the timely dispersal of government aid as well administrative and legislative reform in order to create real housing opportunity, whether or not they are “growing”.7 The other remedy of mandatory set-asides touches upon the idea of inclusionary zoning in that it requires developers and municipalities to “set aside” anywhere between 5 and 25 percent of new housing units to low-moderate income individuals within designated areas. While this seems like the affirmative action described above it still lent itself to intense debate as to the best way to go about this; rent-control, contract-zoning, and maximum footage zoning were all tools used to comply with the new remedy but all still failed to stop the flood of litigation that followed. Back to 1985 with the NJFHA and the creation of COAH the following year the New Jersey state legislature had taken the bull by the horns and created legislative action that would allow for true implementation of the Mt. Laurel doctrines of fair-share and realistically possible variety and choice of housing, or so it would seem. With COAH came the controversial creation of the Regional Contribution Agreement (RCA) which allowed municipalities within the same zone, (New Jersey law had created six housing regions to be administered by COAH with the 6 PCLD (463) 7 PCLD (472)
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1985 FHA and the adoption of the State Development and Redevelopment plan of 1986), to sell fair-share obligations to other municipalities for an agreed upon dollar amount. In turn the receiving municipality agreed to absorb up to 50% of the sender’s fair-share obligation.8 While it would be easy to deride this approach based upon previous evidence of segregation and exclusion there are interesting economic and social implications of such an arrangement. First off, economically it creates a closed market of buyers and sellers of low-income housing units, with market equilibrium being somewhat determined by externalities like negotiating power, geography, and the racial and social fabric of a municipality instead of a free-market approach as traditional economic theory would dictate. These “buying” municipalities are likely responding to their residents’ perceived desire to maintain property values and certain standards of living while effectively excluding at least half of the low-moderate income strata from attaining a reasonable variety and choice of adequate housing.9 While in some circumstances it may seem advantageous to a municipality with an abundance of dilapidated housing units to receive financial consideration for the re-building and maintenance of such limits, does it not also maintain the status-quo of housing segregation to some extent, not to mention the affect on the housing market? It is this willingness to pay to exclude coupled with a buyer’s market, (due to the fact that many selling municipalities must compete with one another in the same region, in addition to lacking the capital necessary to re-build on their own,) that seems wholly out of line with the Mt. Laurel doctrine. Besides the additional bureaucracy and questionable ethical considerations, perhaps in some ways it is realistic; if cities are going to do all they can to exclude anyway, one might as well tax them for it and setup a system by which at least some benefit from this behavior, although it really doesn’t feel like a step in the right direction, does it? 8 A Market for Exclusion, (211) 9 A Market for Exclusion, (213)
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Aside from the RCA which was upheld by the Supreme Court and the addition of development fees extracted from those developers unwilling to accommodate low-income housing, COAH can be seen as a significant step forward from Mt. Laurel I in that it had legislated authority to oversee long-range planning and development efforts and a schema in place to determine fair-share. By the year 2000, 29,000 units had been completed or were under construction with another 7,000 in the pipeline; in addition over 7,000 affordable housing units had been rehabilitated.10 While this was still far short of the demand for such units, New Jersey was at least building at the national average. It was around this time that COAH was to enact its third round fair-share formulas for determining municipal affordable housing quotas. It was also at this time that the political landscape began to change with the election of a new governor and head of COAH, both of which were former mayors and outspoken critics of COAH. In the end the council did not adopt new rules until 2004 and in doing so removed the fair-share obligations set forth by ML2 and instead devised a “growth share� formula. With this new formula in hand, as well as complacency, statistical manipulation, and irreverence COAH had its hands tied until a suit was brought in 2007 that sought to strike down the third round rules.11 In 2008 the appellate courts struck down the provision, but by this time support for COAH had begun to erode, not only in the state legislature but by municipalities that had their hands tied in litigation and administrative ambiguity. Around this time legislation was enacted that essentially abolished the RCA component of the NJFHA, instead opting to force municipalities to use their development fees or lose them in four years. This was based on the reasoning that around 75% or these said fees were just being used as RCA’s instead of actually building A.H. in the region which needed it. This had the detrimental effect of not only alienating municipalities but now developers who 10 The Mount Laurel Doctrine, (851) 11 The Mount Laurel Doctrine (853)
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relied upon the agreement to keep a steady income of new projects coming their way. In addition, while the RCA might have been ethically questionable, it still provided for a concrete and tangible way for housing to be built, regardless of intention. At this point we have entered the “Great Recession” and the election of Governor Chris Christie, both of which seemed to be an end to COAH and a return to frivolous law-suits and unending litigation. Indeed, by 2010 COAH’s 2008 revision had been struck down yet again in appellate court, that in addition to its moratorium by the governor in favor of a task-force assigned to come up with alternatives, had effectively silenced the affordable housing council. It was around this time that the state legislature came up with a proposed S-1 legislation that gave municipalities more power in determining their fair-share and opted for a flat 20% rate if they could not come up with one. Affordable housing advocates never allowed the law to come to vote, instead A-3447 was introduced which offered an approach comparable to Massachusetts 40-B plan which called for a 10% set aside as well as other provisions for enforcement and enactment.12 While this new bill seemed to be a reasonable compromise, the governor has vetoed it, putting COAH again in limbo, while currently the Supreme Court is deciding the appeals from the 2010 appellate decision repealing the 2008 modifications! With the threat of yet more judicial wrangling and delay, the original Mt. Laurel doctrine is truly in limbo as neither the courts nor the legislature seem willing to agree on what exactly the best way is to interpret the New Jersey constitution when it comes to acquiring, possessing and protecting property, as well as pursuing and obtaining safety and happiness. With such a hostile legislative environment and what has become to be seen as a highly politicized supreme court, New Jersey’s housing future has never been more in question. 12 Id.
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The solutions may be as easy as looking next door to Pennsylvania’s adoption of a relaxed affordable housing approach that allows for less intense development in the form of alternative high-density land use, such as mobile homes, townhouses, and apartments. Or perhaps a flat rate of 10% set-asides combined with inclusionary zoning incentives as well development fees will do the trick. Why not rely on the findings of COAH and combine multiple avenues of remediation, including long-range planning documents bolstered by current demographics and economic information. Perhaps using these tools in conjunction with the election of a governor willing to compromise will yield a solution. However, the real question lies in the intersection of politics, economics, and social freedom. How do we reconcile the 5th and 14th amendment with our free-market real-estate system while still providing for economic theory and market equilibrium? How does the free market impact racial segregation, and is it even the invisible hand of the free market, or the more visible hand of prejudice and ignorance that keeps suburbia opposed to integration with the threat of deflated property-values, crime and blight? While we wrestle with these questions COAH remains tied up in the courts, in despite of the fact it has helped over 100,000 people to obtain housing and that the NJ legislature passed a compromise bill in S1(2) in 2011 that seeks to remedy past errors and account for lessons learned in other states.13 We will have to wait and see in the meantime Allan Mallach provides us a theoretical framework for discussion in his Rutgers Law Review article, “The issue that the court grappled with ‌ was the extent to which the constitution demands not only facially-neutral zoning, but affirmative steps- invariably involving allocation of financial resources- to overcome not zoning barriers as such, but the effects of the real-world
13 The Fate of Affordable Housing Legislation
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interaction of zoning, housings costs, and real estate economics, in order to achieve the results sought by the court.� It is precisely this intersection that remains so intriguing. On one hand we have the suburban American dream, on the other the blighted inner city. While the real-world may not be so stark, the socio-political divide that exists in America is real, and wholly taken on by Mt. Laurel. While no one would argue against the American dream of improving ones lot in life, few are reluctant to accommodate such changes as are necessary for the inclusion of all in this ethos. While other eastern sea-board states have enacted fair-share paradigms, the lack of initial legislative support for the Mt. Laurel doctrine remains at the core of its political controversy. One could argue that with the adoption of S1(2) the people have spoken, but with a politicized supreme court and a retaliatory and determined governor, consensus seems far from attainable. What is probable however is that the Supreme Court is unlikely to go against its previous decisions in regard to Mt. Laurel and will inevitably force all parties to come to some agreement on what is fair-share, variety of choice, etc‌ While we wait for the politicos to drop their egos and come to a consensus families, seniors, and children wait for their fair-share of the American dream, how long they have to wait, is up to anyone’s guess.
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Works Cited Addes, Kirah. "THE FATE OF AFFORDABLE HOUSING LEGISLATION IN NEW JERSEY: HOW GOVERNOR CHRISTIE'S PROPOSED S-1 LEGISLATION THREATENS TO UNDO THE NEW JERSEY SUPREME COURT DECISIONS IN MOUNT LAUREL I AND MOUNT LAUREL II." Seton Hall Legislative Journal 36.1 (2011): 82-105. Print.
"Affordable Housing Archive, New Jersey." The Mount Laurel Archive. New Jersey Digital Legal Library, n.d. Web. 3 May 2013. <http://njlegallib.rutgers.edu/mtlaurel/>.
"Affordable Housing Shrinks amid Legal Battle over Millions in Funds." Press of Atlantic City. N.p., 4 May 2013. Web. 5 May 2013. <http://www.pressofatlanticcity.com/education/affordable-housing-shrinks-amid-legalbattle-over-millions-in-funds/article_a837b324-b46e-11e2-b3f3-001a4bcf887a.html>.
Andrews, James, ed. "Low-income Housing Comes to Mount Laurel - at Last." Planning 63.7 (1997): 25. Print.
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Hughes, M. "A Market for Exclusion: Trading Low-income Housing Obligations under Mount Laurel III." Journal of Urban Economics 29.2 (1991): 207-17. Print.
Hughes, Mark A., and Peter M. Vandoren. "Social Policy through Land Reform: New Jersey's Mount Laurel Controversy." Political Science Quarterly 105.1 (1990): 97-111. Print. Mallach, Alan. "The Mount Laurel Doctorine and the Uncertainties of Social Policy in a Time of Retrenchment." Rutgers Law Review 63.3 (2011): 849-66. Print.
Mandelker, Daniel R. "Equity Issues in Land Use." Planning and Control of Land Development: Cases and Materials. Newark, NJ: LexisNexis, 2005. 457-526. Print.
Payne, John M. "General Welfare and Regional Planning: How the Law of Unintended Consequences and Mount Laurel Doctrine Gave New Jersey a Modern State Plan." St. John's Law Review 73 (1999): 1103-123. Web.