Private commercial developers have struggled to install affordable housing in New Jersey’s municipalities for decades, facing opposition from communities, local governments, and the municipal zoning boards. The Appellate Division has just eased the burden of private developers by holding, for the first time explicitly, that affordable housing built by a commercial developer (as opposed to a non-profit or public entity) qualifies as an “inherently beneficial use” in Conifer Realty LLC v. Township of Middle Zoning Board of Adjustment (September 9, 2011). By being categorized as an inherently beneficial use, commercial affordable housing is subject to a less stringent standard for obtaining use variance relief. In support of this holding, the Appellate division noted that the courts have previously recognized that affordable housing is an inherently beneficial use in a “variety of circumstances” and that housing needs are “clearly related to the general welfare under the zoning laws.”
The Appellate Division found that the zoning board construed previous opinions holding that affordable housing is an inherently beneficial use too narrowly. The board had maintained that because all existing caselaw had addressed affordable housing constructed by public of non-profit entities, a commercial developer’s affordable housing could not qualify as an inherently beneficial use. The Court directed that in analyzing whether a proposed use is inherently beneficial, “the focus of the inquiry is whether the proposal furthers the general welfare, not whether the undertaking is one that is not-for-profit or a commercial enterprise.”
In addition to remanding the application to the Board for consideration under the less stringent inherently beneficial use standard (the Sica test), the Appellate Division found the Board’s concerns regarding the negative criteria to be arbitrary, capricious, and unreasonable. The Appellate Division noted that the Board’s rejection of the application, base on density and environmental concerns, was contradicted by the Township’s Fair Share plan, which included the project, minimized the environmental impact, and promised to amend the zoning and density for the project.