Victory For Commercial Affordable Housing

by:  Katharine A. Muscalino

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.

COAH Developer’s Fee Repeal Bill Introduced

by:  Jonathan M. Prince

With the current legislative session scheduled to end soon, both the New Jersey Assembly and Senate introduced bills (S-2974 and A-4221) to repeal the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1).    The Act imposed development fees on builders of non-residential properties of 2.5% of the equalized assessed value of the land and improvements, for all new non-residential construction on an unimproved lot or lots. 

Enacted to provide municipalities with what was supposed to be a fair and balanced funding method to address the State’s affordable housing needs, the Act has been criticized by many, including developers, trade groups and labor.  As drafted, the new bill would repeal the development fees retroactive to July 2010.

Sewer Service Stunting Growth

by:  Katharine A. Muscalino

If the economy and local land use regulations didn’t make development hard enough, some counties and municipalities have discovered the New Jersey Department of Environmental Protection’s June 2009 Water Quality Management Rules as another technique to inhibit growth and property development in New Jersey. The Water Quality Management Rules require counties, and some municipalities, to closely examine sewer service within their borders, and limit expansion of that service when possible. Counties have applied the DEP’s rules to remove undeveloped properties from the sewer service areas in their wastewater management plans, and to limit demand from sewered properties to the gallonage they currently produce.

Holmdel has taken the Water Quality Management Rules a step farther in its attempts to limit the possibilities for the redevelopment of the Alcotel-Lucent corporate campus, by arguing that the campus should not only be limited to its existing gallonage, but that sewer service should be limited to the existing corporate buildings’ footprints. This limitation would not only cap the size of the future development and its sewer service demand, but would also significantly limit the potential for new uses, and particularly residential use, on the site. If Holmdel succeeds in this aggressive wastewater management planning, it will have serious ramifications for the future of the property and its marketability.

 

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