By Joshua Burd
In Mercer County, the most high-profile battleground in the fight over New Jersey’s affordable housing policy, attorneys recently reached the 40-day mark.
Forty trial days, that is.
For nearly three months, attorneys representing the New Jersey Builders Association, the Fair Share Housing Center, several municipalities and others have been convening in a Trenton courtroom before Superior Court Judge Mary Jacobson. The case centers on the disputed affordable housing obligations for five towns in Mercer County — West Windsor, Robbinsville, East Windsor, Hopewell and Princeton — but its impact could turn out to be even greater.
“All the focus and attention is currently on the Mercer County trial, while all parties remain uncertain about the future of New Jersey’s affordable housing policy,” said Carol Ann Short, CEO of the New Jersey Builders Association. “However, we are hopeful that a positive decision by Judge Jacobsen in Mercer County can provide much needed critical insight and better inform all further dialogue in the other vicinages around of the state.
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Stakeholders are making their cases over what the obligations should be for 2015 to 2025, following the state Supreme Court’s decision to shut down the idle Council on Affordable Housing and hand the agency’s oversight to the state judiciary. Since then, more than 100 towns have reached settlements with housing advocates and the NJBA, but some 200 others are either still negotiating or awaiting the outcome of trials that to have yet to take place.
And the stakes only grew just a week into the Mercer County trial, when the Supreme Court rule that the so-called gap years — referring to the period from 1999 to 2015, when COAH failed to produce rules that held up in court — must be counted in determining a municipality’s obligations. That means that after the current trial concludes, which is expected to be later this month, attorneys will return to the courtroom once again in May for a second trial on the gap years.
“Once the Supreme Court ruled on that, that required that the gap year issue also be addressed in Mercer County proceedings,” said Thomas F. Carroll III of Hill Wallack LLP, one of the NJBA’s lead attorneys in the litigation. “Until that time it wasn’t clear that we would be addressing it at all.”
And while the outcome will only be legally binding in Mercer County, experts have said judges and stakeholders from around the state are watching the case and could use it as a potential guidepost going forward. But participants must first get through hours of testimony from expert witnesses, including consultants with differing views on the state’s affordable housing obligations, and a second trial in the coming weeks.
To discuss the trial to date and the future of the litigation, Real Estate NJ recently caught up with Carroll and Rick Hoff of Bisgaier Hoff LLC, another one of the NJBA’s lead attorneys.
Real Estate NJ: Do you have a feel for or specifically know which other jurisdictions are watching this case and who else will be impacted by the outcome?
Rick Hoff: I think it’s fair to say that every other jurisdiction, with the exception of the couple that have settled, are watching it. There are sporadic trials being scheduled, but there’s the practical reality that those trials can’t start because the witnesses that are in those trials are stuck in Mercer County. So everyone’s watching it. It’s my expectation this will have a significant effect on other counties across the state.
Thomas Carroll: This trial, when all is said and done, is going to take about 40 trial days. That’s a really lengthy trial for any judge to handle. Some judges’ dockets just don’t allow for it. Fortunately, Judge Jacobson has been able to devote that many trial days to this trial beginning on Jan. 10 and it’s usually two to three days a week. So once she makes a ruling on all of these issues, I truly doubt that any other Mount Laurel judge throughout the state is going to want to duplicate what she has done — in other words, have a complete trial, 40 days or thereabouts, to resolve these issues. So I think the judges throughout the state are going to read Judge Jacobson’s opinion, take a look at the record, the transcripts, the reports and decide how they want to proceed and how they want to have fair share numbers established in their counties.
Technically, Judge Jacobson’s decision is only binding in only Mercer County and other trial court judges throughout the state are not technically bound by it. But I do think they’re going to have to develop procedures so that they take a look at it and decide how they’re going to handle it procedurally, so that those counties can officially promulgate fair share numbers without the need to go through another 40-day trial.
RENJ: For those other jurisdictions where there has been some resolution, have you seen Judge Jacobson or the expert witnesses defer to any of the conclusions that have come out of those other settlements?
TC: Only Judge Wolfson in Middlesex County has issued an opinion on fair share numbers and that was approved for publication in January. But decisions like that are only binding within certain counties. So that’s the law in Middlesex and Judge Jacobson’s will be in Mercer as concluded in her opinion.
She has told us she has read everything from Middlesex and everywhere else, but that’s not to say that it will unduly influence what she does. She’s going to decide the issues based on the trial that’s taking place before her.
RH: The only thing I’ll add to that is that, while those decisions obviously don’t impact her, she’s often met with arguments from the municipal side that the numbers must be realistic and therefore you can’t believe the numbers that are being proffered by Fair Share Housing Center and the builders’ representatives. And oftentimes, there’s some legal argument back and forth during the trial and the judge often points to the fact that over a hundred cases have settled across the state. So she is mindful that the cases are settling around her and they’re settling based on Fair Share Housing Center’s calculations and their position as a starting point for these settlements.
So while it certainly doesn’t bind her in any way, she’s certainly cognizant that those things are happening based upon the numbers that municipalities find that they can achieve.
RENJ: If there is a settlement, how does that actually get put into practice?
RH: All of the settlement agreements contain the plans that the towns propose to do. So it’s not just their number they’re settling on. They’re settling on the number and the implementation of that number. It’s all in there as to how they think they’re going to be able meet that number.
TC: It’s basically a settlement on compliance measures as well as fair share numbers because the compliance measures are not challenged. Basically, everybody is looking to COAH’s prior round rules as to compliance measures, with certain exceptions, but that’s pretty much everybody’s guidepost as to what kind of measures they will do to provide the realistic opportunity to the housing.
RENJ: When will the courts deal with matters of compliance and ensuring that the towns follow through on the agreements?
RH: The judge is going to come up with the numbers for each of these towns and then each of these five towns will split back apart. They’re consolidated for the numbers trial, not for their own plan. So they’ll have to go and develop a plan that meets that number and they’ll represent it to the courts for approval. You can have objections (from) builders, property owners, Fair Share Housing Center. It won’t be 40-day proceedings like this one. They’re more streamlined, but there are more proceedings after we come up with the number.
TC: Unfortunately, the long process of establishing fair share numbers has just delayed everything for close to two years now as these issues get sorted out.
Once that uncertainty is off the table — subject to any appeals, of course — then fair share plans get designed to meet those numbers and that’s a much more straightforward process.
RENJ: Richard Reading is a consultant who is serving as the court-appointed ‘special master’ in the Mercer County trial. Can you explain his role?
TC: He’s been sitting in the courtroom throughout listening to all of the testimony. He is going to be the last witness on phase one and probably also on phase two. He’s previously done a report on fair share number recommendations. And he’s sat through the entire trial, listened to all of the testimony, and he’s going to testify as the last witness as to his recommendations to Judge Jacobson, and they’ll certainly carry a lot of weight. The judge is not bound by them, but she’ll carefully listen to him as she has with the other witnesses and then render a decision.
RENJ: Just to shift gears for a minute to what’s happening outside the courtroom, for the 100 or so towns that have settled, have you actually seen any projects get off the ground?
RH: I can tell you that it’s coming. I’ve been personally involved in matters where you’ve got zoning in place for thousands and thousands of units. So when those permits are pulled, I don’t know, but I can tell you that the zoning is on the books for them.
TC: Middlesex is out in front because a lot of those cases settled already, but eventually all of these towns are either going to settle or they’re going to fight to the bitter end, and there’s going to be housing plans approved by the court and zoning that goes with it. And we’re going to see an awful lot of zoning that, in my view, there’s an awful lot of pent up demand for. And I think that’s going to be good for everybody.
