Introduction

In the landmark case The Hills Development Company v. The Township of Bernards, decided on February 20, 1986, the Supreme Court of New Jersey addressed the constitutionality and implications of the newly enacted "Fair Housing Act" (L. 1985, c. 222). This case emerged as a direct response to the pressing need for affordable housing solutions as mandated by the Mount Laurel I (Burlington County N.A.A.C.P. v. Mount Laurel, 67 N.J. 151 (1975)) and Mount Laurel II (Southern Burlington County N.A.A.C.P. v. Mount Laurel, 92 N.J. 158 (1983)) decisions.

The parties involved included The Hills Development Company as the plaintiff-respondent and several municipalities as defendants-appellants. The core issue revolved around whether the Fair Housing Act, which established the Council on Affordable Housing with the authority to define housing needs and regulate municipal obligations, was constitutional and effective in addressing the Mount Laurel obligations.

Summary of the Judgment

The Supreme Court of New Jersey upheld the constitutionality of the Fair Housing Act, affirming its role as a legislative measure to fulfill the state's constitutional mandate for providing affordable housing. The Court emphasized the pivotal role of the newly formed Council on Affordable Housing in systematically determining regional housing needs and setting municipal fair share obligations.

The Court ordered the transfer of all pending Mount Laurel litigation to the Council, subject to conditions that would preserve municipalities' ability to meet their housing obligations. The decision underscored a preference for administrative resolution over judicial intervention, aiming for a more coherent and statewide approach to affordable housing.

Analysis

Precedents Cited

The judgment heavily references the foundational decisions of Mount Laurel I and II, which established the legal framework obligating municipalities to provide affordable housing. Additionally, the Court cited several other cases to emphasize the deference owed to legislative actions, including:

• Mahwah Township v. Bergen County Bd. of Taxation, 98 N.J. 268 (1985)
• Paul Kimball Hospital v. Brick Township, 86 N.J. 429 (1981)
• Brunetti v. New Milford, 68 N.J. 576 (1975)
• Harvey v. Essex County Bd. of Freeholders, 30 N.J. 381 (1959)

These cases collectively reinforce the principle that substantial legislative action, especially in response to judicial mandates like those in Mount Laurel, is presumed constitutional and deserving of respect and deference.

Legal Reasoning

The Court's legal reasoning revolved around several key points:

• Legislative Response: Recognizing the judiciary's burden in enforcing the Mount Laurel obligations, the Legislature enacted the Fair Housing Act to create a dedicated administrative body—the Council on Affordable Housing. This shift aimed to provide a more consistent and efficient mechanism for addressing affordable housing needs.
• Administrative Expertise: The Court emphasized that an administrative agency, selected by the Governor and confirmed by the Senate, possesses the expertise and legitimacy to manage complex housing needs across diverse regions. This centralized approach was deemed superior to the fragmented, case-by-case judicial remedies previously employed.
• Presumption of Constitutionality: Given the comprehensive nature of the Act and its alignment with prior constitutional mandates as outlined in Mount Laurel I and II, the Court upheld its constitutionality, deferring to the Legislature's enactment unless clear and convincing evidence of unconstitutionality was presented.
• Transfer of Litigation: The Act mandated the transfer of pending and future Mount Laurel litigation to the Council, aiming to streamline the resolution process. The Court interpreted the "manifest injustice" standard narrowly, aligning with legislative intent to prioritize administrative handling over judicial proceedings.

The Court concluded that the Fair Housing Act not only addressed the constitutional requirements established by Mount Laurel but also provided a robust framework for sustainable affordable housing development through legislative action.

Impact

The Court's decision has profound implications for future housing cases and the broader legal landscape in New Jersey:

• Administrative Supremacy: By affirming the Fair Housing Act, the Court vested significant authority in the Council on Affordable Housing, reducing the judiciary's role in housing disputes. This centralization aims to foster uniformity and efficiency in addressing affordable housing needs.
• Shift in Litigation Dynamics: Pending Mount Laurel cases are to be handled by the Council, subject to conditions that mitigate potential delays in housing development. This shift is expected to expedite the creation of affordable housing while preserving municipal resources.
• Legislative Preference: The decision underscores the Court's preference for legislative and administrative solutions over judicial remedies in complex social issues, setting a precedent for future cases where legislative frameworks are in place.
• Standard of Review: The narrow interpretation of "manifest injustice" limits the grounds on which a transfer of litigation can be denied, ensuring that only exceptional cases impede the administrative process.

Overall, the judgment paves the way for a more coordinated and effective approach to affordable housing in New Jersey, potentially serving as a model for other states grappling with similar issues.

Complex Concepts Simplified

Mount Laurel Obligation

Originating from the Mount Laurel I and II decisions, the Mount Laurel Obligation requires New Jersey municipalities to provide a "realistic opportunity" for the construction of low and moderate-income housing. This stems from the state's constitutional mandate ensuring equal access to housing opportunities.

Fair Housing Act

Enacted in 1985, the Fair Housing Act established the Council on Affordable Housing, an administrative body tasked with assessing housing needs regionally and setting equitable housing obligations for municipalities. The Act aims to replace ad-hoc judicial interventions with a systematic, legislative approach to affordable housing.

Builder's Remedy

A builder's remedy allows developers to bypass certain zoning regulations by dedicating a portion of their developments to low and moderate-income housing. This mechanism was previously a judicial remedy to enforce the Mount Laurel Obligation but has been modified under the Fair Housing Act through a temporary moratorium.

Substantive Certification

Municipalities that petition the Council can receive substantive certification for their housing plans and ordinances if they align with the Council's criteria and provide a realistic opportunity for meeting their housing obligations. This certification streamlines compliance and reduces the likelihood of litigation.

Mandatory Set Aside

Refers to the requirement that a certain percentage of housing units in a development must be designated for low and moderate-income residents. Typically, a minimum of 20% is considered a substantial proportion, ensuring affordable housing is integral to new developments.

Conclusion

The Supreme Court of New Jersey's affirmation of the Fair Housing Act marks a pivotal shift in the state's approach to affordable housing. By endorsing a comprehensive legislative and administrative framework over fragmented judicial remedies, the Court has paved the way for a more unified and effective strategy to meet the Mount Laurel Obligations. This decision not only reinforces the importance of affordable housing but also exemplifies the judiciary's willingness to defer to legislative solutions in complex social matters. Moving forward, the Council on Affordable Housing is expected to play a central role in shaping New Jersey's housing landscape, ensuring that low and moderate-income residents have equitable access to necessary housing opportunities.