The deadline for municipalities to pass a binding resolution determining their present and prospective fair share obligation under the fourth round of affordable housing was January 31. Linked here is a chart showing both the Department of Community Affairs (“DCA”) and the municipalities’ present and prospective need calculations. The chart also identifies the reduction, if any, in what municipalities believe to be their prospective need obligations. In total, municipalities which adopted binding resolutions have reduced their prospective need obligations by over 13,000 units.
Municipalities were also required to file their resolutions with the newly created Affordable Housing Dispute Resolution Program (“Program”), publish the resolutions on their websites, and file declaratory judgment actions. If a municipality missed the January 31 deadline, it lost immunity from exclusionary zoning litigation until such time as the municipality is determined to be in compliance with the Fair Housing Act and the Mt. Laurel doctrine.
A municipality’s prospective need obligation is based on three factors: (i) the equalized nonresidential valuation factor, which focuses on changes in nonresidential property valuations; (ii) the income capacity factor, which measures the extent to which a municipality’s income level differs from that of the lowest-income municipality in its housing region; and (iii) the land capacity factor, which focuses on the total acreage that is developable in the municipality. The DCA admitted that its calculation of the land capacity factor had limitations to its accuracy. Therefore, municipalities which reduced their prospective need obligation from the DCA’s determination typically presented evidence that the DCA overestimated the developable land in the municipality.
The deadline for an interested party to challenge a municipality’s determination of its present and prospective fair share obligation is February 28, 2025. If a challenge is not made by this date, then the municipality’s determination of its obligations will be established by default and bear a presumption of validity. Administrative Directive #14-24 states that interested parties must file a challenge to a municipality’s calculation of its fair share obligation by way of an answer to the declaratory judgment action and after the filing of a timely challenge, the matter is referred to the Program. N.J.S.A. 52:27D-304.1.f.(1)(b) requires an interested party to file a challenge with the Program.
Any challenge to a municipality’s prospective need obligation calculation will require a justification beyond simply stating that the reduction from the DCA’s calculation is too large. For example, an interested party challenging the obligation may be required to submit a planner’s report proving that the municipality’s planner’s land capacity factor was calculated incorrectly. All challenges to a municipality’s determination must be resolved by the Program no later than March 31.
Municipalities can still take a vacant land adjustment (VLA) to reduce their realistic development potential (RDP), in which case the actual number of affordable housing units for which the municipality’s zoning will provide a realistic opportunity to be built will be less than the prospective need obligation. Some municipalities have even quantified what their VLA will be in their binding resolution determining their fair share obligations. Once the Program resolves any dispute over prospective need obligations, municipalities have until June 30 to adopt a Housing Element and Fair Share Plan, which, among other things, will quantify their VLA and RDP.
My previous post on the DCA report and the timeline of the remaining steps in the fourth-round process can be found here.