In re Plan for the Abolition of the Council on Affordable Hous.

• Decision Date: 10 July 2013
• Citation: 70 A.3d 559,214 N.J. 444
• Parties: In re PLAN FOR the ABOLITION OF the COUNCIL ON AFFORDABLE HOUSING and Providing for the Transfer of the Functions, Powers, and Duties of the Council on Affordable Housing to the Department of Community Affairs, Reorganization Plan 1–2011.
• Court: New Jersey Supreme Court

214 N.J. 444

70 A.3d 559

In re PLAN FOR the ABOLITION OF the COUNCIL ON AFFORDABLE HOUSING and Providing for the Transfer of the Functions, Powers, and Duties of the Council on Affordable Housing to the Department of Community Affairs, Reorganization Plan 1–2011.

Supreme Court of New Jersey.

Argued Jan. 28, 2013.

Decided July 10, 2013.

Robert T. Lougy, Assistant Attorney General, argued the cause for appellants Governor Chris Christie and Department of Community Affairs (Jeffrey S. Chiesa, Attorney General of New Jersey; Mr. Lougy and Geraldine Callahan, Deputy Attorney General, on the briefs).

Adam M. Gordon argued the cause for respondent Fair Share Housing Center (Kevin D. Walsh, attorney, Cherry Hill; Mr. Gordon and Mr. Walsh, on the briefs).

Jeffrey R. Surenian argued the cause for amicus curiae New Jersey League of Municipalities (Mr. Surenian, attorney; Mr. Surenian and Donna A. McBarron, on the brief).

Henry L. Kent–Smith submitted a brief on behalf of amici curiae Housing and Community Development Network of New Jersey, Corporation for Supportive Housing, and Mercer Alliance to End Homelessness (Fox Rothschild, attorneys; Mr. Kent–Smith and Abbey True Harris, Lawrenceville, on the brief).

Edward L. Lloyd submitted a brief on behalf of amici curiae David Epstein, James Gilbert, David Moore, Benjamin Spinelli, John Weingart, and Betty Wilson (Morningside Heights Legal Services and Environmental Law Clinic, Columbia University School of Law, attorneys; Mr. Lloyd and Susan J. Kraham, on the brief).

Chief Justice RABNER delivered the opinion of the Court.

This case is about whether a Chief Executive has the authority to abolish independent agencies that were created by legislative action. The issue arises in the context of whether the Legislature delegated the power to abolish the Council on Affordable Housing (COAH or Council) to the Governor. That question turns on COAH's status, which the Legislature outlined at N.J.S.A. 52:27D–305, and the scope of the Executive Reorganization Act of 1969 (Reorganization Act or Act), N.J.S.A. 52:14C–1 to –11.

The Legislature created COAH to ensure that municipalities fulfill their constitutional obligation to provide affordable housing. Because COAH is an executive agency, the Constitution required the Legislature to place COAH “within” an Executive Branch department. See N.J. Const. art. V, § 4, ¶ 1. At the same time, the Legislature took steps to make COAH independent and insulate it from complete Executive control. To achieve that aim, the Legislature included a term of art in COAH's enabling legislation when it placed COAH “in, but not of,” the Department of Community Affairs (DCA). N.J.S.A. 52:27D–305(a). That phrase has long been understood to signify an agency's independence, see N.J. Tpk. Auth. v. Parsons, 3 N.J. 235, 244, 69 A.2d 875 (1949), and the Legislature has used the designation to create dozens of independent offices.

In June 2011, the Governor issued a Reorganization Plan that abolished COAH and transferred its responsibilities to DCA. The Governor relied on the Reorganization Act. The Act, however, extends the Chief Executive's authority only to agencies that are “ of the executive branch.” N.J.S.A. 52:14C–3(a)(1) (emphasis added). Because COAH is “in, but not of,” an Executive Branch department, N.J.S.A. 52:27D–305(a) (emphasis added), the plain language of the Reorganization Act does not encompass COAH. We therefore conclude that the Act does not authorize a Chief Executive to abolish an independent agency like COAH. As a result, we affirm the judgment of the Appellate Division in that regard.

We offer no opinion as to whether COAH's structure should be abolished, maintained as is, or modified. That is a policy decision left to the Governor and the Legislature and guided by the Constitution. This case instead is about the process that the two branches must follow if they decide to alter COAH.

That same process applies to possible changes to other independent entities. The precise language in the Reorganization Act does not authorize a Chief Executive to abolish them and replace their independent boards with a cabinet official who answers to the Chief Executive. Instead, to abolish or change the structure of independent agencies, both the legislative and executive branches must enact new laws that are passed by the Senate and Assembly and signed by the Governor.

We need not address the State's appeal of a separate Appellate Division order that granted Fair Share Housing Center's motion in aid of litigant's rights. The parties have advised us that, in light of recent developments, the appeal is now moot and should be dismissed. We ask the Clerk to enter an order to that effect.

I.

A.

The Legislature enacted the Fair Housing Act (FHA) in 1985, L. 1985, c. 222, in response to the Supreme Court's two Mount Laurel decisions, see N.J.S.A. 52:27D–302; Hills Dev. Co. v. Twp. of Bernards, 103 N.J. 1, 19, 510 A.2d 621 (1986). The decisions recognized a constitutional obligation on municipalities to “afford[ ] a realistic opportunity for the construction of [their] fair share of the present and prospective regional need for low and moderate income housing.” S. Burlington Cnty. N.A.A.C.P. v. Twp. of Mount Laurel, 92 N.J. 158, 205, 456 A.2d 390 (1983)( Mount Laurel II ) (citing S. Burlington Cnty. N.A.A.C.P. v. Twp. of Mount Laurel, 67 N.J. 151, 174, 336 A.2d 713 (1975)( Mount Laurel I )). The FHA, in turn, created COAH, N.J.S.A. 52:27D–305, and gave it rulemaking and adjudicatory powers to satisfy the requirement to provide affordable housing. Hills, supra, 103 N.J. at 20, 510 A.2d 621.

The Legislature codified COAH as an independent agency and structured it in a precise way. COAH was placed “in, but not of, the Department of Community Affairs,” N.J.S.A. 52:27D–305(a)—a term of art that is discussed later. The Council consists of twelve “members appointed by the Governor with the advice and consent of the Senate.” Ibid. The members represent different perspectives related to affordable housing:

four shall be elected officials representing the interests of local government, at least one of whom shall be representative of an urban municipality having a population in excess of 40,000 persons and a population density in excess of 3,000 persons per square mile, at least one of whom shall be representative of a municipality having a population of 40,000 persons or less and a population density of 3,000 persons per square mile or less, and no more than one of whom may be a representative of the interests of county government; four shall representthe interests of households in need of low and moderate housing, one of whom shall represent the interests of the nonprofit builders of low and moderate income housing, and shall have an expertise in land use practices and housing issues, one of whom shall be the Commissioner of Community Affairs, ex officio, or his or her designee, who shall serve as chairperson, one of whom shall be the executive director of the agency, serving ex officio; and one of whom shall represent the interests of disabled persons and have expertise in construction accessible to disabled persons; one shall represent the interests of the for-profit builders of market rate homes, and shall have an expertise in land use practices and housing issues; and three shall represent the public interest.

[ Ibid.]

No more than six of the twelve members can belong to the same political party. Ibid. They serve six-year terms with staggered initial appointments, N.J.S.A. 52:27D–305(b), and can be removed only for cause in a proceeding in Superior Court, N.J.S.A. 52:27D–305(e).

The FHA granted COAH “extremely broad” powers that we refer to only briefly. Hills, supra, 103 N.J. at 32, 510 A.2d 621. Within months after its formation, and “from time to time thereafter,” the Council was to divide the State into housing regions and determine the need for low- and moderate-income housing for the State and each region. N.J.S.A. 52:27D–307(a), (b). COAH is also required to establish and regularly adjust criteria and guidelinesfor municipalities to determine their fair share of the region's need for affordable housing, consistent with the FHA's overall scheme. N.J.S.A. 52:27D–307(c). The agency determines whether a municipality's housing plan complies with COAH's rules and makes it realistically possible for the municipality to achieve its fair share of low-and moderate-income housing. N.J.S.A. 52:27D–314(a), (b). If there is an objection to a municipality's plan—specifically, to its “petition for substantive certification,” see N.J.S.A. 52:27D–313 to –314—the Council first engages in mediation among the parties. N.J.S.A. 52:27D–315(b). If mediation fails, the dispute is transferred to an administrative law judge for an expedited hearing. N.J.S.A. 52:27D–315(c).

To implement the FHA, COAH is empowered to adopt procedural and substantive rules. See N.J.S.A. 52:27D–307(c), –307.5; In re Six Month Extension of N.J.A.C. 5:91–1 et seq., 372 N.J.Super. 61, 73, 855 A.2d 582 (App.Div.2004), certif. denied,182 N.J. 630, 868 A.2d 1033 (2005). The rules are subject to the Administrative Procedure Act (APA), N.J.S.A. 52:14B–1 to –15. See N.J.S.A. 52:27D–307.5, –308. Absent “an imminent peril to the public health, safety, or welfare,” the APA requires public notice and an opportunity for comment before the adoption of any rule. See N.J.S.A. 52:14B–4. The FHA also expressly states that COAH “shall give appropriate weight to ... public comment” in carrying out its duties. N.J.S.A. 52:27D–307.

B.

In February 2010, the Governor issued Executive Order No. 12, which created the Housing Opportunity Task Force. 42 N.J.R. 659(a) (Mar. 15, 2010). He directed the Task Force to review existing affordable housing laws and regulations, assess “the continued existence of COAH,” and issue a report in ninety days. Ibid.¹ The Task Force issued its report on March 19, 2010. The report...