Red Bank, NJ - March 10, 2015 - This morning, the New Jersey Supreme Court issued an Order and unanimous Opinion on the Council on Affordable Housing (COAH)’s failure to adopt third round affordable housing regulations. In a nutshell, it held that due to COAH’s inaction, “there no longer exists a legitimate basis to block access to the courts.” Although the Supreme Court dissolved the exhaustion-of-remedies requirement from the Fair Housing Act, which encouraged voluntary compliance with affordable housing obligations through an administrative forum (COAH), it did not immediately open the floodgates for litigation.

Rather, the Supreme Court established a process for municipalities that had been previously processing their plans through COAH to file their plans with the trial court. These municipalities have 30 days from the effective date of the Order, which is not for another 90 days, to file a declaratory action with the court.

For those municipalities which were previously granted substantive certification, after the 30-day period, a party can file a lawsuit challenging the municipality’s constitutional compliance. However, no builder’s remedy litigation shall be permitted unless and until a court finds that: 1) the previous grant of substantive certification was invalid; 2) a constitutionally compliant supplementing plan cannot be developed; and 3) an exclusionary zoning action, including a builder’s remedy, should proceed.

For those municipalities which had been participating in the COAH process without obtaining a grant of substantive certification and which file a declaratory action with the court within the 30-day period, they will have no more than five months to submit their plan, and the court may provide initial immunity from an exclusionary zoning action during that period. If such municipality does not file with the court within the 30-day period and is then the subject of a constitutional compliance lawsuit, the court will have discretion as to the length of immunity, if any, from a builder’s remedy lawsuit based on an individualized assessment of the municipality’s compliance efforts.

For those municipalities which never availed themselves of the COAH process, they continue to be subject to builder’s remedy lawsuits, as they have been since the inception of the Mount Laurel obligation.

Thus, while courts are now the forum of first resort for evaluating municipal compliance with affordable housing obligations, the floodgates have not yet been completely opened for builder’s remedy litigation.

Finally, the Supreme Court still leaves the door open for COAH to adopt compliant third round regulations, and also invites the Legislature to create a statutory alternative. Unless and until that occurs, the affordable housing issue is one that will be decided by the courts.