MEMORANDUM

Clarke Caton Hintz

Architecture To: Mayor Linda Jacukowicz
Planning
Landscape Architecture From: Carl Hintz, ASLA, LLA, PP, AICP
Elizabeth McManus, PP, AICP, LEED AP

Re: Summary of Appellate Court decision on COAH’s Third Round Rules

and Impact on Franklin Township’s Third Round Plan.

100 Barrack Street Date: October 26, 2010

Trenton NJ 08608
clarkecatonhintz.com
Tel: 609 883 8383 The Appellate Division’s decision of October 8, 2010 invalidated COAH’s third round
Fax: 609 883 4044 growth share methodology and portions of COAH’s regulations. The Court directed
COAH to revise its third round methodology and regulations within five months to
something substantially similar to COAH’s first and second round methodology.

The Appellate Court did not provide municipalities before COAH or the courts with a
blanket stay of the third round proceedings. However, the decision did provide
municipalities with the ability to apply to COAH or the court for a stay. “Any such
application (for a stay) should be decided in light of the status of the individual municipality’s
compliance with its affordable housing obligations.” We anticipate that COAH will issue
guidance for how municipalities such as Franklin should proceed; we will provide
recommendations on the need for any future actions as additional information becomes
available. We have provided highlights of the Court decision further on in this memo.

In light of the Court’s ruling, we reviewed Franklin’s third round plan and offer the
John Clarke, FAIA following comments.
Philip Caton, FAICP
Carl Hintz, AICP, ASLA  The Court upheld COAH’s rehabilitation numbers and prior round numbers,
John Hatch, AIA thus, it appears that the Township will continue to have a 19 unit rehabilitation
George Hibbs, AIA number and a 36 unit prior round obligation. The Township’s 65 unit third
Brian Slaugh, AICP round adjusted growth share number has been invalidated. COAH has five
Michael Sullivan, AICP months to prepare new third round numbers.

 The Township’s third round plan includes 8 prior round rental bonus credits
for the 8 unit Frontage Road municipally sponsored construction project. It
appears that these bonus credits may no longer be valid. As such, the
Township may have an 8 unit prior round gap.
 MEMORANDUM
Clarke Caton Hintz
 If the prior round bonus credits are lost, the Township will also lose the 2 unit
prior round surplus which was proposed to satisfy a portion of the third round
obligation.

 The credit-worthiness of the Township’s NB south inclusionary housing

district may be impacted. The Court directed COAH to revise its standards for
inclusionary housing and it unclear how these revised standards may relate to
the proposed NB district standards.

Here are the highlights of the Court decision:

 COAH’s growth share methodology was invalidated because actual growth

could be discouraged and COAH’s projected third round need numbers could
be reduced if actual municipal growth was less. Additionally, the projected
third round numbers were not based on reliable vacant land data. COAH was
directed “to adopt new third round rules that use a methodology for determining
prospective need similar to the ones used in the first and second rounds” that the
Court previously upheld.

 The Court rejected a challenger’s suggestion to use COAH’s 115,666 statewide

third round affordable housing need number even if COAH’s third round
methodology was invalidated. The Court emphasized the need for COAH to
use up-to-date data.

 A municipally-sponsored or 100% affordable housing sites must show site

control, site suitability, source of funding and a proposed developer. Therefore,
municipalities may not include “future sites” as a mechanism to satisfy the
third round obligation.

 COAH’s rules do not provide sufficient incentive for the private construction of
inclusionary developments (market-rate and affordable units). Bright-line
standards must be provided. In addition, the Court did not favor requiring
more than a 20% affordable housing set-aside.

 The Court invalidated prior round rental bonuses for developments that were
not built within a reasonable time-frame. COAH was guided to return to a
time limitation for rental bonuses.

 Bonuses for smart growth and redevelopment were upheld; however the Court
invalidated third round compliance bonuses.

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 MEMORANDUM
Clarke Caton Hintz
 Prior round numbers were upheld.

 The Court upheld its prior ruling on COAH’s methodology that does not
reallocate present need (existing substandard housing) from urban
municipalities to other municipalities in the region. The Court also
questioned whether urban municipalities should be assigned prospective
(growth) numbers.

 The Court found that “any incidental impacts of inclusionary housing

developments upon municipal finances does not constitute a mandated expenditure
of municipal revenues prohibited by the Fair Housing Act.” Also, the court did not
find that there was a mandated expenditure if a town voluntarily chose to
develop 100% affordable housing.

 COAH’s rules were adopted properly as the Court found that an appropriate
economic impact statement was provided.

 The Court requested that COAH clarify its regulations on credits for publicly-
funded affordable housing.

 Finally, the Court declined to divest COAH of third round rule-making and did
not appoint a special master.

On October 19th, the General Assembly released A-3447 proposed affordable housing
reform legislation. We have reviewed the draft legislation and will provide a summary as
well. Lastly, we would be happy to work with your municipal attorney to discuss and
plan for a possible stay request.

C. James Stryker, Land Use Board Chairman

Ursula Stryker, RMC, Township Clerk
Jean A. Beischer, Planning Board Clerk

W:\5000's\Franklin Twp\5264.FS\Third Round\2008 Plan\101026 COAH Update.docx

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