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October 2002 Planning Copyright by American Planning Association
By James Lawlor A town does not meet its obligation to provide its fair share of affordable housing if its zoning disregards market realities, the New Jersey Supreme Court ruled in August. Toll Brothers, Inc., owns a 293-acre parcel of land in the town of West Windsor (pop. 22,000) in Mercer County. It is one of 11 parcels the township zoned for inclusionary housing in 1984. The rezoning was one element of the township's compliance with a court ruling that the town had engaged in exclusionary zoning. The rezoning established West Windsor's fair share of the regional need for affordable housing at 1,619 units, later reduced to 1,498. Despite the town's commitment, by 1993 fewer than 150 affordable housing units had been built. Toll Brothers, which calls itself the nation's leading builder of luxury homes, sued the town in 1993. It sought a "builders remedy" to rezone its parcel to allow a combination of market rate single-family houses on small lots and 110 affordable multifamily rental units. The company said a number of factors contributed to the township's poor record in developing affordable housing: environmental constraints on the designated sites, costly sewage disposal policies, public resistance, and the township's failure to include conventional single-family housing as part of the affordable mix. The first Mount Laurel decision, in 1975, established the principle that municipalities have an obligation under the state constitution to provide a "realistic opportunity" for development of low- and moderate-income housing, the supreme court said in the Toll Brothers opinion. Two years later, in Oakwood at Madison v. Township of Madison, the court created the builders remedy as an "incentive for the institution of socially beneficial but costly litigation such as Mount Laurel." The builders remedy allows developers to seek court approval for projects that will allocate at least 20 percent of the units to low- or moderate-income families. The state went on to enact a fair housing law and create the Council on Affordable Housing, whose task is to promote towns' assumption of their affordable housing fair share without resort to litigation. But subsequent history has demonstrated that many municipalities continued to avoid compliance with the "clear mandate" of the first Mount Laurel decision, the supreme court said. Realism required. The trial court concluded that if a municipality over-zones for densities and types of housing for which there is little or no market, it cannot realistically expect development to occur. West Windsor argued that determining compliance by reference, in part, to market demand would prevent a municipality from planning housing with any degree of certainty. Toll Brothers, on the other hand, argued that by relying in large part on housing for which demand is at best minimal, the township effectively ensured it would not meet its Mount Laurel obligation. The supreme court said it had recognized that market forces play a role in the viability of site development from the beginning. "Our case law, the Fair Housing Act, and the Council on Affordable Housing all recognize that the realistic opportunity evaluation cannot be made in a theoretical vacuum. Zoning for affordable housing that cannot or will not be built by private developers does not satisfy that municipality's Mount Laurel obligation," the court declared. West Windsor failed to explain why it continued to emphasize multifamily housing, for which demand is low, when the market for detached single-family housing is so high, the court continued. In the same period that relatively few affordable housing units were built in West Windsor, the stock of single-family homes almost doubled. Market demand is only one factor in evaluating a municipality's fair-share compliance, the court said, but zoning ordinances that rely on housing types for which there is little demand cannot provide a realistic opportunity to develop affordable housing. The supreme court affirmed the trial court's granting of the remedy requested by Toll Brothers. The case is Toll Brothers, Inc. v. Township of West Windsor.
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