The New Jersey Supreme Court has unanimously held that the administrative process run by COAH in which municipalities show compliance with affordable housing obligations is no longer working and municipalities are no longer protected from builder’s remedy lawsuits in which a developer sues to build housing at a greater density than permitted by ordinance. The Court’s ruling came after COAH failed to adopt Third Round regulations as previously ordered. Third Round Regulations were originally due in 1999, but have been delayed for more than 15 years by court challenges and COAH’s failure to reach a consensus on the adoption of new regulations.

The Court agreed that Builder’s Remedy suits will now be heard by the courts thereby bypassing the COAH administrative process.

So as not to punish municipalities the Court has:

  1. Delayed implementation of the Order for 90 days to allow an “orderly transition;”
  2. Established a transition process and time table for municipalities to have their affordable housing plans deemed compliant by the Court.
    During the first 30 days following the order’s effective date courts will hear declaratory judgment actions by municipalities seeking to have their affordable housing plans declared constitutionally compliant ;
  3. Courts can provide municipalities with immunity from Builder’s Remedy lawsuits ( the equivalent of a COAH affordable housing plan certification) but that immunity will not be granted for an “undefined” time period and will be subject to periodic review. Municipalities can be stripped of their immunity if they abuse the process and do not achieve compliance;
  4. A court can only permit a Builder’s Remedy after it has the opportunity to address the constitutionality of the municipal affordable housing plan and found it to be “wanting.”

Municipalities must now rush to go to Court within 120 days and seek a declaratory judgment that their affordable housing plans are constitutionally compliant otherwise they will lose protection from Builder’s Remedy litigations.