Township of Warren, In re

• Decision Date: 26 March 1991
• Citation: Township of Warren, In re, 588 A.2d 1227, 247 N.J.Super. 146 (N.J. Super. App. Div. 1991)
• Parties: In re Petition for Substantive Certification Filed by the TOWNSHIP OF WARREN.
• Court: New Jersey Superior Court — Appellate Division

Page 146

247 N.J.Super. 146

588 A.2d 1227

In re Petition for SubstantiveCertification Filed by the TOWNSHIP OF WARREN.

Superior Court of New Jersey Appellate Division.

Argued Oct. 17, 1990.

Decided March 26, 1991.

Stephen Eisdorfer, Asst. Deputy Public Advocate, for appellantDepartment of the Public Advocate(Wilfredo Caraballo, Public Advocate, attorney; Stephen Eisdorfer and Susan R. Oxford, Asst. Deputy Public Advocate, on the brief).

Geraldine Callahan, Deputy Atty. Gen., for respondentCouncil on Affordable Housing(Robert J. Del Tufo, Atty. Gen., attorney; Michael R. Clancy, Asst. Atty. Gen. and Mary Jacobson, Deputy Atty. Gen., of counsel; Geraldine Callahan and Donald M. Palombi, Deputy Atty. Gen., on the brief).

Richard P. Flaum, for respondent Township of Warren (Kunzman, Coley, Yospin & Bernstein, attorneys; John E. Coley, Jr., of counsel; Richard P. Flaum and Sandra Belli, Warren, on the brief).

James M. Cahill, Asst. City Atty., for respondentCity of New Brunswick(William J. Hamilton, Jr., City Atty., attorney; Margery S. Golin, New Brunswick, on the brief).

Before Judges SHEBELL, HAVEY and SKILLMAN.

The opinion of the court was delivered by

SKILLMAN, J.A.D.

The Public Advocate appeals from a final decision of the Council on Affordable Housing(COAH) granting substantive certification pursuant to N.J.S.A. 52:27D-314 to the housing element and fair share plan of Warren Township (Warren).

This proceeding was initiated by a property owner filing an action in the Law Division alleging that Warren's zoning ordinances fail to provide a reasonable opportunity for the construction of housing affordable to lower income households and are therefore unconstitutional under the Mount Laurel doctrine.SeeSouthern Burlington Cty. NAACP v. Township of Mount Laurel, 67 N.J. 151, 336 A.2d 713(Mount Laurel I ), appeal dismissed and cert. den., 423 U.S. 808, 96 S.Ct. 18, 46 L.Ed.2d 28(1975), and92 N.J. 158, 456 A.2d 390(1983)(Mount Laurel II).After enactment of the Fair Housing Act of 1985 (FHA), N.J.S.A.52:27D-301 to -329, the Supreme Court held that Warren was entitled to transfer the case to COAH.Hills Dev. Co. v. Township of Bernards, 103 N.J. 1, 47-56, 67-68, 510 A.2d 621(1986).COAH treated Warren's motion for transfer as a petition for substantive certification, seeid. at 38 n. 10, 510 A.2d 621, and the Public Advocate filed objections to the petition.COAH rejected the Public Advocate's objections and granted substantive certification to Warren's fair share plan.

COAH determined that Warren's fair share of housing affordable to lower income households is 367 units.Warren's certified fair share plan provides for the satisfaction of this obligation through the rehabilitation of 34 indigenous substandard units, the construction of 145 new units, of which 88 will be set-aside units built in inclusionary developments and 57 will be lower income units built on land owned by Warren, the execution of a regional contribution agreement (RCA) under which Warren will pay $4,399,000 to the City of New Brunswick for the construction or rehabilitation of 166 lower income units in New Brunswick and a 22 unit rental bonus credit for 66 units which will be rented to lower income persons.¹Warren's fair share plan further provides, as permitted by COAH's regulations that households which presently reside in Warren or which have a member who works in Warren shall be granted an occupancy preference with respect to the purchase or rental of new lower income housing constructed in the municipality.

The Public Advocate argues that Warren's RCA with New Brunswick and the occupancy preference violate the Mount Laurel doctrine by perpetuating exclusionary zoning and violate constitutional and statutory prohibitions against racial discrimination by perpetuating racial stratification within the housing region in which Warren is located.²The Public Advocate also argues that COAH's standards of affordability for Mount Laurel housing violate the Mount Laurel doctrine by not providing a realistic opportunity for the construction of housing affordable to households earning less than 40% of the median household income in the region.We reject these arguments and therefore affirm COAH's decision granting substantive certification to Warren's fair share plan.³

I

Before discussing the Public Advocate's challenge to Warren's fair share plan, we must consider several preliminary procedural arguments presented by COAH and the Public Advocate.

A

COAH contends that the Public Advocate's appeal should be dismissed because it constitutes an untimely collateral attack upon regulations adopted in 1986.The Public Advocate responds that the appeal does not challenge the validity of COAH's regulations on their face but only as applied in Warren's fair share plan.

We agree with COAH that this appeal is in essence a collateral attack upon its regulations, because the practical effect of a decision in the Public Advocate's favor would be to invalidate COAH's regulations or at least to severely limit their scope of operation.Thus, the Public Advocate's argument that Warren's plan fails to provide housing affordable to households with income below 40% of the median income in the region is a direct challenge to N.J.A.C. 5:92-14.2, which requires a municipality to insure that lower income units are affordable to households with income ranging from 40% to 80% of regional median income.Similarly, the Public Advocate's argument that the occupancy preference authorized by N.J.A.C. 5:92-15.1 is exclusionary and racially discriminatory would appear equally applicable to most suburban municipalities that adopt fair share plans which include an occupancy preference.And the Public Advocate's argument that the RCA between Warren and New Brunswick is exclusionary and racially discriminatory, because it results in a shift of lower income housing from a municipality with a small number of lower income households and few minority residents to a municipality with a high percentage of lower income households and minorities, would be equally applicable to almost any other agreement likely to be entered into pursuant to COAH's regulations.⁴

But while we agree with COAH's characterization of this appeal as a collateral attack on the validity of the agency's regulations, it does not follow that the appeal should be dismissed as untimely.Generally, the 45-day limit on appeals from final decisions of state agencies imposed by R. 2:4-1(b) does not apply to challenges to the validity of regulations.Bergen Pines County Hosp. v. New Jersey Dep't of Human Servs., 96 N.J. 456, 471 n. 10, 476 A.2d 784(1984).We recognize that an appeal challenging the validity of a regulation may be dismissed if the appellant fails to participate in the proceeding resulting in its adoption or fails to file a timely notice of appeal, and the regulation is subsequently relied upon by affected parties.Id. at 474-76, 476 A.2d 784.We also recognize that the Public Advocate did not object to COAH's regulations at the time they were proposed and did not file a prompt appeal challenging their validity.Furthermore, Warren and other affected municipalities have relied upon the regulations in developing their fair share plans.In fact, the Public Advocate did not move for a stay of COAH's grant of substantive certification to Warren, and we were advised at oral argument that Warren has now substantially implemented its fair share plan by, among other things, distributing several million dollars to New Brunswick in accordance with the terms of the RCA.Nevertheless, the Public Advocate's appeal raises the kind of important public questions of general applicability which the courts are reluctant to dismiss on the ground of untimeliness.SeeTownship of Franklin v. Board of Educ. of N. Hunterdon Reg. High School, 74 N.J. 345, 347-48, 378 A.2d 218(1977), cert. den., 435 U.S. 950, 98 S.Ct. 1576, 55 L.Ed.2d 800(1978).In addition, to a limited extent the Public Advocate's arguments go beyond simply challenging COAH's regulations.Moreover, any possible prejudice to Warren or New Brunswick from the Public Advocate's untimely challenges to COAH's regulations could be obviated by appropriate limitations on the scope of relief in the event the Public Advocate were to prevail.Consequently, we conclude that this appeal should not be dismissed as untimely.

B

The Public Advocate argues that Warren's petition for substantive certification should have been referred to the Office of Administrative Law (OAL), because N.J.S.A. 52:27D-315(c) requires referral if mediation is unsuccessful, regardless of whether there is a contested factual issue.However, we rejected this same argument in Hills Dev. Co. v. Township of Bernards, 229 N.J.Super. 318, 340-41, 551 A.2d 547(App.Div.1988) and the Public Advocate has not presented any persuasive reason for us to reconsider that conclusion.Although N.J.S.A. 52:27D-315(c) describes the obligation to refer to the OAL in mandatory terms, it does so by express incorporation of the Administrative Procedure Act.In our view, this incorporation encompasses N.J.S.A. 52:14F-7, which authorizes the agency with ultimate decision making authority "to determine whether a case is contested."

This conclusion is supported by the legislative history of the FHA.The fair housing bill originally passed by the Legislature expressly provided that COAH's review process should not be considered a "contested case."The bill went on to state: "Any appeal of a council decision granting or denying substantive certification shall be to a trial court, which shall conduct an adjudicatory hearing."However, this bill was conditionally vetoed by Governor Kean in part because:

The bill as currently drafted creates a novel mediation and review process and specifically provides that the review process should not be considered a contested case under the Administrative...