NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3323-15T1

IN RE DECLARATORY JUDGMENT 

ACTIONS FILED BY VARIOUS 

MUNICIPALITIES, COUNTY OF 

OCEAN, PURSUANT TO THE 

SUPREME COURT'S DECISION IN 

In Re Adoption Of N.J.A.C.

5:96, 221 N.J. 1 (2015).

____________________________

Argued June 6, 2016 – Decided July 11, 2016

Before Judges Lihotz, Fasciale and Nugent.

On appeal from an interlocutory order of

Superior Court of New Jersey, Law Division, 

Ocean County, Docket No. L-2640-15.

Jeffrey R. Surenian argued the cause for 

appellant Township of Barnegat (Jeffrey R. 

Surenian & Associates, L.L.C., attorneys; 

Mr. Surenian, Michael A. Jedziniak, Erik C. 

Nolan, and Michael J. Edwards, on the 

briefs).

Kevin D. Walsh argued the cause for 

respondent Fair Share Housing Center (Mr. 

Walsh and Adam M. Gordon, on the brief).

Stephen M. Eisdorfer argued the cause for 

respondent New Jersey Builders Association 

(Hill Wallack, L.L.P., attorneys; Mr. 

Eisdorfer, Thomas F. Carroll, III, and Emily 

P.W. Santoro, on the brief).

Edward J. Buzak argued the cause for 

respondent NJ State League of Municipalities 

(The Buzak Law Group, L.L.C., attorneys; Mr. 

Buzak, on the brief).

APPROVED FOR PUBLICATION

July 11, 2016

APPELLATE DIVISION
2 A-3323-15T1

Richard J. Hoff, Jr. argued the cause for 

respondent Highview Homes, L.L.C. (Bisgaier 

Hoff, L.L.C., attorneys; Mr. Hoff and 

Danielle Novak Kinback, on the brief).

Edward J. Boccher argued the cause for 

respondent Township of Brick (DeCotiis, 

Fitzpatrick & Cole, L.L.P., attorneys; Mr. 

Boccher, of counsel and on the brief; Louis 

N. Rainone and Wendy Rubinstein, on the 

brief).

Gilmore & Monahan, P.C., attorneys for 

respondents Township of Jackson and Township 

of Little Egg Harbor, join in the brief of 

appellant Township of Barnegat.

DiFrancesco, Bateman, Kunzman, Davis, Lehrer 

& Flaum, P.C., attorneys for respondent 

Township of Toms River, join in the brief of

appellant Township of Barnegat.

Gluck Walrath, L.L.P., attorneys for 

respondent Township of Ocean, join in the 

brief of appellant Township of Barnegat.

Dasti, Murphy, McGuckin, Ulaky, Koutsouris, 

& Connors, attorneys for respondent Township 

of Stafford, join in the brief of appellant 

Township of Barnegat.

Jonathan E. Drill argued the cause for 

amicus curiae The Municipal Group (Stickel, 

Koenig, Sullivan & Drill, L.L.C., attorneys; 

Mr. Drill, of counsel and on the brief).

Donald J. Sears argued the cause for amicus 

curiae Township of South Brunswick.

Ronald L. Israel argued the cause for amicus 

curiae Colts Neck Township (Chiesa Shahinian 

& Giantomasi, P.C., attorneys; Mr. Israel, 

on the brief).

Archer & Greiner, P.C., attorneys for amicus 

curiae Township of Middletown (Brian Michael 
3 A-3323-15T1

Nelson, of counsel and on the brief; Kira S. 

Dabby, on the brief).

Michael B. Steib, attorney for amicus curiae 

Township of Millstone.

Lowenstein Sandler, L.L.P., attorneys for 

amicus curiae American Planning AssociationNew Jersey Chapter, New Jersey Future, and 

the Housing & Community Development Network 

of New Jersey (Catherine Weiss and Katy 

Akopjan, on the brief).

Disability Rights New Jersey, amicus curiae, 

for itself, and The Supportive Housing 

Association of New Jersey, The Housing 

Community Development Network of New Jersey, 

Collaborative Support Programs of New 

Jersey, The Alliance for the Betterment of 

Citizens with Disabilities, The New Jersey 

Association of Community Providers, The Arc 

of New Jersey, New Jersey Association of 

Mental Health and Addiction Agencies, The 

Coalition of Mental Health Consumer 

Organizations, The System of Care 

Association, The New Jersey Psychiatric 

Rehabilitation Association, The Mental 

Health Association in New Jersey, Advancing 

Opportunities, Community Access Unlimited, 

The Community Health Law Project, and Autism 

New Jersey (Iraisa Orihuela-Reilly, Susan 

Saidel, and Joseph B. Young, on the brief).

The opinion of the court was delivered by

FASCIALE, J.A.D.

In the wake of the New Jersey Supreme Court's order

requiring judicial oversight of municipal housing obligations to 

preclude exclusionary development schemes, see In re Adoption of 

N.J.A.C. 5:96 & 5:97 by the New Jersey Council on Affordable 

Housing, 221 N.J. 1 (2015) (In re N.J.A.C. 5:96 II), we granted 
4 A-3323-15T1

the Township of Barnegat's1 motion for leave to appeal from an 

interlocutory order entered by a designated Mount Laurel2 judge,

directing the court's Special Regional Master to include, as a

new, "separate and discrete" component, an additional 

calculation for establishing a municipality's affordable housing 

need from 1999 to 2015 (the gap period).3 In entering the order, 

the judge concluded that a municipality's fair share affordable 

housing obligation for the third-round cycle is comprised of (1) 

its newly-created, court-imposed, "separate and discrete" gap-

 

1 We granted leave to appeal on behalf of the Township of 

Barnegat, In re Twp. of Barnegat, L-1856-15, along with twelve

consolidated declaratory judgment complaints filed by Ocean 

County municipalities: In re Borough of Beach Haven, L-2217-15; 

In re Township of Berkeley, L-1855-15; In re Township of Brick, 

L-1857-15; In re Township of Jackson, L-1879-15; In re Township 

of Lacey, L-1912-15; In re Township of Little Egg Harbor, 

L-1911-15; In re Township of Manchester, L-1910-15; In re 

Township of Ocean, L-1884-15; In re Borough of Pine Beach, 

L-1687-15; In re Borough of Point Pleasant, L-1858-15; In re 

Township of Stafford, L-1913-15; and Township of Toms River, 

L-1867-15.

2 S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 67 N.J. 151 

(Mount Laurel I), appeal dismissed and cert. denied, 423 U.S.

808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975); and S. Burlington 

Cty. NAACP v. Twp. of Mount Laurel, 92 N.J. 158 (1983) (Mount 

Laurel II).

 

3 The February 18, 2016 order includes a signature of another 

judge who handled two of these thirteen consolidated matters,

and who joined the opinion of the Mount Laurel judge. Reference 

in our decision to the "court" or "judge" refers to the Mount 

Laurel judge who entered the order and rendered the opinion 

under review. 
5 A-3323-15T1

period obligation; (2) unmet prior round obligations from 1987 

to 1999; (3) present need; and (4) prospective need. 

We granted amicus status to the following entities that 

urged us to reverse the order: Colts Neck Township; Township of 

Millstone; Township of Middletown; Township of South Brunswick;

The Municipal Consortium; and the Municipal Group.

4 The New 

Jersey State League of Municipalities (NJLM) also appeared 

before the court as a respondent. 

These entities contend the court is without legal authority 

to create a "separate and discrete" gap-period obligation. 

Instead, they maintain that a municipality's affordable housing 

obligation for the third-round cycle is comprised of unmet prior 

round obligations from 1987 to 1999, present need, and 

prospective need. They argue that prospective need projects 

into the future a town's housing obligation for ten years from 

the current time, not from the beginning of the gap period in 

1999. They acknowledge that the identifiable housing need that 

arose during the gap period would be captured by a town's 

present need obligation, but they are adamant that there is no

"separate and discrete" gap-period obligation. 

 

4 The Municipal Group is a formal coalition of hundreds of 

municipalities organized to address fair share methodological 

issues in the aftermath of the Court's opinion in In re N.J.A.C. 

5:96 II.
6 A-3323-15T1

We granted amicus status to the following entities that 

urged us to affirm the order: Disability Rights New Jersey; the 

New Jersey Chapter of the American Planning Association; New 

Jersey Future; and the Housing and Community Development 

Network. 

Fair Share Housing Center (Fair Share), New Jersey Builders 

Association (NJBA), and Highview Homes, L.L.C. (Highview)

appeared before the court as intervenors and, pursuant to In re 

N.J.A.C. 5:96 II, Fair Share participated as an interested 

party. Fair Share agrees that a municipality's affordable 

housing obligation for the third-round cycle is comprised of 

unmet prior round obligations from 1987 to 1999, present need, 

and prospective need. Fair Share concedes that a town's 

prospective need requires calculations projecting forward ten 

years. Fair Share asserts, however, that prospective need also 

requires a municipality to perform housing calculations 

retroactively during the gap period. Therefore, Fair Share 

maintains that gap-period housing need comprises part of a 

town's calculation of its prospective need. As a result, Fair 

Share defines prospective need differently than those entities 

urging us to reverse the order. For Fair Share, prospective 

need covers a period of twenty-seven years: from 1999 to the 

present, and then ten years into the future. Thus, to the 
7 A-3323-15T1

extent a municipality is required to establish its prospective 

need from 1999 to the present, and then ten years into the 

future, Fair Share urges us to uphold the court-imposed

"separate and discrete" gap-period housing obligation. 

The narrow legal issue on appeal is whether a "separate and 

discrete" gap-period affordable housing obligation is authorized 

by (1) the core principles of the Mount Laurel doctrine, as 

codified in the Fair Housing Act of 1985 (FHA), N.J.S.A. 52:27D301 to -329; and (2) In re N.J.A.C. 5:96 II. Resolution of this 

legal question specifically addresses whether a municipality's 

prospective need involves a retroactive housing obligation 

starting in 1999. Our focus, therefore, is on the propriety of 

the court's conclusion that such a "separate and discrete" 

obligation is "constitutionally mandated." 

Applying the core principles of the Mount Laurel doctrine 

and the plain language of the FHA, including its unambiguous 

definition of "prospective need" — a forward "projection of 

housing needs based on development and growth which is 

reasonably likely to occur in a region or a municipality,"

N.J.S.A. 52:27D-304(j) — and following the Supreme Court's 

admonition not to become an alternative administrative decision 

maker for unresolved policy issues surrounding the Third Round 

Rules, we hold that the FHA does not require a municipality to
8 A-3323-15T1

retroactively calculate a new "separate and discrete" affordable 

housing obligation arising during the gap period. Pursuant to 

In re N.J.A.C. 5:96 II, "previous methodologies employed in the 

First and Second Round Rules should be used to establish present 

and prospective statewide and regional affordable housing need," 

and prior round unfulfilled obligations "should be the starting 

point for a determination of a municipality's fair share 

responsibility." Supra, 221 N.J. at 30 (emphasis added). As 

the Court instructed, subject to the guidelines and principles 

it outlined in In re N.J.A.C. 5:96 II, Mount Laurel judges

may confidently utilize similar discretion

[used by the Council on Affordable Housing 

(COAH)] when assessing a town's plan, if 

persuaded that the techniques proposed by a 

town will promote for that municipality and 

region the constitutional goal of creating 

the realistic opportunity for producing its 

fair share of the present and prospective

need for low- and moderate-income housing. 

[Ibid. (emphasis added).]

We emphasize that under our tripartite system of government, the 

imposition of a new retrospective calculation, designed to 

establish affordable housing need during the gap period — a new 

methodology that essentially addresses "unresolved policy 

details of replacement Third Round Rules" — is best left for 

consideration by the Legislative and Executive branches of 

government, where public policy issues associated with such an 
9 A-3323-15T1

additional "separate and discrete" obligation can be fairly and 

fully debated in the public forum. The Legislature may craft 

new legislation addressing any gap period between housing cycles 

if that is the course it wishes to take. Enforcement of 

subsequent legislation promoting affordable housing needs — and 

its effect on a municipality's Mount Laurel obligation — would 

still be a matter that may be brought to the courts. 

The judge did not determine whether any of the town's plans 

will satisfy their constitutional affordable housing 

obligations. At this point in the litigation, his main legal 

concern was whether to impose a "separate and discrete"

affordable housing obligation for the gap period, in addition to 

a town's unmet prior round, present, and prospective 

obligations. Having resolved that legal question, the judge may 

now determine whether the towns have met their constitutional 

goal of creating "[a] realistic opportunity for producing its 

fair share of the present and prospective need for low- and 

moderate-income housing." In re N.J.A.C. 5:96 II, supra, 221 

N.J. at 30 (emphasis added).

We therefore reverse the order and remand for further 

proceedings. 
10 A-3323-15T1

I.

We begin by reviewing the pertinent principles of the Mount 

Laurel doctrine, the enactment of the FHA, the role of COAH, and 

the Supreme Court's decision in In re N.J.A.C. 5:96 II.

5 

In Mount Laurel I, the Supreme Court concluded that 

developing municipalities must "presumptively make realistically 

possible an appropriate variety and choice of housing" through 

land use regulations. Supra, 67 N.J. at 174. The Court stated 

that such municipalities "cannot foreclose the opportunity of 

the classes of people mentioned for low[-] and moderate[-income]

housing and in its regulations must affirmatively afford that 

opportunity, at least to the extent of the municipality's fair 

share of the present and prospective regional need." Ibid. The 

Court determined that land use regulations are encompassed in 

the State's police power, required such regulations to "promote 

public health, safety, morals or the general welfare," and 

concluded "a zoning enactment which is contrary to the general 

welfare is invalid." Id. at 175. 

Approximately eight years later, the Court returned to the 

issue. In Mount Laurel II, supra, 92 N.J. 158, the Court 

 

5 In general, the Court determined COAH failed to promulgate 

valid Third Round Rules, concluded that exhausting 

administrative remedies before COAH was therefore no longer 

necessary, and established procedures for affordable housing 

matters to proceed before designated Mount Laurel judges. 
11 A-3323-15T1

reaffirmed the doctrine and fashioned a judicial remedy for 

determining a municipality's constitutional obligation to 

provide for low- and moderate-income housing. In re Adoption of 

N.J.A.C. 5:96 and 5:97 by the New Jersey Council on Affordable 

Hous., 215 N.J. 578, 587-89 (2013) (In re N.J.A.C. 5:96 I). 

Adding teeth to the doctrine, the Court sanctioned a builder's 

remedy, which permitted builder-plaintiffs to sue for the 

opportunity to construct housing at higher densities than a 

municipality would allow. Id. at 589. In strengthening the 

Mount Laurel doctrine, the Court explained that the core of the 

doctrine was a municipality "would satisfy [its] constitutional 

obligation by affirmatively affording a realistic opportunity 

for the construction of its fair share of the present and 

prospective regional need for low[-] and moderate[-income]

housing." Mount Laurel II, supra, 92 N.J. at 205. The Court 

stated that a realistic opportunity depends on "whether there is 

in fact a likelihood — to the extent economic conditions allow —

that the lower income housing will actually be constructed." 

Id. at 222. Although the Court devised a scheme to address 

resolution of litigation in this field, it reiterated its 

preference for legislative action. Id. at 212-13. Two years 

later, and in the aftermath of AMG Realty Co. v. Township of 

Warren, 207 N.J. Super. 388, 453 (Law Div. 1984), which
12 A-3323-15T1

articulated a method for calculating affordable housing 

obligations that substantially impacted the likelihood of 

whether lower income housing would actually be constructed, the 

Legislature enacted the FHA. 

The FHA codified the core constitutional holding 

undergirding the Mount Laurel obligation. In re N.J.A.C. 5:96 

I, supra, 215 N.J. at 584. The FHA required "reasonable fair 

share housing guidelines and standards." N.J.S.A. 52:27D302(d). The FHA created COAH, N.J.S.A. 52:27D-305, which was 

designed to provide an administrative alternative to litigating 

constitutional compliance in exclusionary zoning actions. In re 

N.J.A.C. 5:96 II, supra, 221 N.J. at 7-8, 11. 

COAH's primary responsibility was to assign and determine 

municipal affordable housing obligations. Id. at 7 (citing 

N.J.S.A. 52:27D-305, -307). The FHA required COAH to enact and 

thereafter update regulations that established statewide 

affordable housing need; to assign an affordable housing 

obligation to each municipality for its designated region; and 

to identify the techniques available to municipalities in 

addressing the assigned obligation. Ibid. (citing N.J.S.A.

52:27D-307, -308). The criteria and guidelines that the FHA 

directed COAH to adopt were targeted for "[m]unicipal 

determination of its present and prospective fair share of the
13 A-3323-15T1

housing need in a given region which shall be computed for a 

[ten]-year period." N.J.S.A. 52:27D-307(c)(1). The FHA defined 

prospective need:

"Prospective need" means a projection of 

housing needs based on development and 

growth which is reasonably likely to occur 

in a region or a municipality, as the case 

may be, as a result of actual determination 

of public and private entities. In 

determining prospective need, consideration 

shall be given to approvals of development 

applications, real property transfers and 

economic projections prepared by the State 

Planning Commission established by sections 

1 through 12 of P.L.1985, c.398 (C.52:18A196 et seq.).

[N.J.S.A. 52:27D-304(j).] 

Although municipalities were free to resolve constitutional 

Mount Laurel obligations in the courts, the FHA preferred 

resolution in an administrative forum. In re N.J.A.C. 5:96 II, 

supra, 221 N.J. at 4. 

The FHA encouraged and rewarded voluntary municipal 

compliance by (1) providing a period of immunity from civil 

lawsuits to towns that participated in the process for

demonstrating constitutional compliance (the exhaustion-ofadministrative-remedies requirement); and (2) providing a 

presumption of validity in any later exclusionary zoning 

litigation for municipalities who secured from COAH a 

substantive fair housing plan certification. Ibid. The 
14 A-3323-15T1

viability of these provisions was subject to COAH's updating of

housing obligations, as well as related substantive and 

procedural rules. Ibid. 

In 1986, COAH began adopting rules delineating the 

affordable housing obligations of municipalities. In re 

Adoption of N.J.A.C. 5:94 and 5:95 by the N.J. Coal. on 

Affordable Hous., 390 N.J. Super. 1, 23 (App. Div.), certif. 

denied, 192 N.J. 71 (2007) (In re N.J.A.C. 5:94). COAH adopted 

rules covering the periods of 1987 to 1993 — the First Round 

Rules — and 1993 to 1999 — the Second Round Rules. In re 

N.J.A.C. 5:96 I, supra, 215 N.J. at 590. These rules generally 

utilized a methodology for calculating affordable housing 

obligations employed before the Legislature enacted the FHA. 

Ibid. 

In the First Round Rules, COAH defined present need as "the 

total number of deficient housing units occupied by low[-] or

moderate[-income] households as of July 1, 1987." Ibid.

(quoting N.J.A.C. 5:92-1.3). COAH used several factors to 

establish present need, such as "overcrowding, age of unit, and 

lack of plumbing, kitchen or heating facilities as indicators of 

dilapidated housing." Id. at 590-91. 

The First Round Rules also incorporated the statutory 

definition of prospective need as "a projection of low[-] and 
15 A-3323-15T1

moderate[-income] housing needs based on development and growth 

. . . reasonably likely to occur in a region or a municipality." 

Id. at 591 (quoting N.J.A.C. 5:92-1.3). COAH analyzed 

statistics to project forward the number of "'low- and moderateincome households' that would form between 1987 and 1993."

Ibid. (quoting N.J.A.C. 5:92, Appendix A at 92-49). In 

determining prospective need, COAH considered such things as 

municipalities' "approvals of development applications, real 

property transfers and economic projections prepared by the 

State Planning Commission." Ibid. (quoting N.J.A.C. 5:92-1.3). 

For the Second Round Rules, COAH used the same 

methodologies employed in the First Round Rules. Id. at 592. 

COAH also adopted additional regulations granting credits and 

various adjustments to reduce municipalities' fair share 

figures. Ibid. (summarizing the adopted regulations granting

credits and adjustments). Various legal challenges to the First 

and Second Round Rules failed. Ibid.

Essentially, the methodology of allocating municipalities' 

affordable housing obligations largely followed the remedial 

approaches established by Mount Laurel II and AMG Realty. Id.

at 593. COAH first calculated the need for affordable housing 

in each of the State's regions, then allocated to each 

municipality its fair share of the present and prospective 
16 A-3323-15T1

regional need. Ibid. A municipality would be assigned a 

proportionate fair share of the region's housing need based on 

economic projections and its capacity to accommodate affordable 

housing. Ibid. A municipality would subject itself to the 

possibility of defending a builder's remedy challenge if it 

failed to create a realistic opportunity for satisfying its 

assigned share. Ibid. 

Although the Second Round Rules expired in 1999, COAH 

belatedly promulgated its first iteration of the Third Round 

Rules in 2004.6 Ibid. The rule proposal published in the New 

Jersey Register explained that a municipality's fair share for 

the period from 1987 through January 1, 2014, would be 

calculated using three criteria:

(1) a municipality's "rehabilitation share" 

based on the condition of housing revealed 

in the data gathered for the 2000 Census, 

previously known as a municipality's 

indigenous need; (2) a municipality's 

unsatisfied prior round obligation (1987 

through 1999), satisfaction of which will be 

governed by the second round rules; and (3) 

a municipality's "growth share" based on 

housing need generated by statewide job 

growth and residential growth from 1999 

through 2014.

 

6 We characterized this delay as "dramatic," "inexplicable," 

and frustrating the public policies embodied by the Mount Laurel

line of cases. In re Six Month Extension of N.J.A.C. 5:91 et 

seq., 372 N.J. Super. 61, 95-96 (App. Div. 2004) (In re Six 

Month), certif. denied, 182 N.J. 630 (2005). 
17 A-3323-15T1

[Id. at 593-94 (quoting In re N.J.A.C. 5:94, 

supra, 390 N.J. Super. at 27).] 

During the gap period, we considered challenges to the 

validity of the Third Round Rules and remanded the matter to 

COAH on two occasions with instructions to adopt revised Third 

Round Rules. 

Our first remand to COAH with instructions to adopt revised 

rules occurred in 2007. In re N.J.A.C. 5:94, supra, 390 N.J. 

Super. at 47. At that time, we sustained some but rejected many 

of the challenges to the first iteration of the Third Round 

Rules. Importantly, Judge Mary Catherine Cuff, writing for the 

panel, noted that "municipalities are responsible for fulfilling 

their prior round obligation." Id. at 28 (citing N.J.A.C. 5:94-

2.1(a)(2)). 

Judge Cuff's opinion rejected 

appellants'[7] arguments that the 

"rehabilitation share" of a municipality's 

affordable housing obligation, sometimes 

also referred to as present need, should 

include "cost burdened" low- and moderateincome households that reside in standard 

housing and households that lack permanent 

housing or live in overcrowded housing; that 

COAH's methodology for identifying 

substandard housing was "arbitrary and 

unreasonable"; that the [T]hird [R]ound 

 

7 The appellants challenged the validity of COAH's substantive 

rules for the third round that calculated affordable housing 

needs from 1999 to 2014, as well as the validity of several 

regulations. 
18 A-3323-15T1

[R]ules improperly eliminated the part of 

the first and second round methodologies 

that required reallocation of excess present 

need in poor urban municipalities to other 

municipalities in the region; that the use 

of regional contribution agreements to 

satisfy part of a municipality's affordable 

housing obligations violates the Mount 

Laurel doctrine and federal and state 

statutory provisions; that the allowance of 

bonus credits towards satisfaction of a 

municipality's affordable housing 

obligations unconstitutionally dilutes those 

obligations; and that the rule relating to 

vacant land adjustments violates the Mount 

Laurel doctrine and the FHA.

However, Judge Cuff's opinion 

invalidated the parts of the original 

[T]hird [R]ound [R]ules that reduced 

statewide and regional affordable housing 

need based on "filtering"; adopted a growth 

share approach for determining a 

municipality's fair share of prospective 

needs for affordable housing and excluded 

job growth resulting from rehabilitation and 

redevelopment in determining job growth; 

compelled developers to construct affordable 

housing without any compensating benefits; 

authorized a municipality to give a 

developer the option of payment of a fee in 

lieu of constructing affordable housing, but 

provided no standards for setting those 

fees; and authorized a municipality to 

restrict up to 50% of newly constructed 

affordable housing to households with 

residents aged fifty-five or over.

[In re Adoption of N.J.A.C. 5:96 and 5:97 by 

the N.J. Coal. on Affordable Hous., 416 N.J. 

Super. 462, 475-76 (App. Div. 2010) 

(emphasis added) (citations omitted), aff'd

as modified, 215 N.J. 578 (2013).]

 
19 A-3323-15T1

In 2010, Judge Stephen Skillman, also writing for a 

different panel, invalidated a substantial portion of the

revised Third Round Rules, including the growth share 

methodology used by COAH, id. at 511-12; regulations concerning 

the preparation of fair share plans, id. at 487-88; presumptive 

incentives embodied in the regulations, id. at 488-93; and 

regulations concerning rental credits, id. at 493-95. 

Judge Skillman upheld several of the regulations, however, 

such as the elimination of reallocated present need, id. at 500-

02 (reasoning COAH possessed the authority to focus on

municipalities' own obligations, see N.J.A.C. 5:97-2.4, rather 

than reallocating excess present need away from those 

overburdened with substantial housing); and COAH's decision to 

use the prior round obligations without updating the obligations 

based on actual household growth, id. at 498-500. Consequently, 

we redirected COAH to adopt new rules. 

During the gap period, the New Jersey Supreme Court also 

invalidated revised Third Round Rules and issued deadlines for 

COAH to adopt new regulations. In re N.J.A.C. 5:96 I, supra,

215 N.J. at 619-20. Acknowledging the FHA had set a course 

tracking the Mount Laurel II allocation methodology for 

satisfaction of present and prospective need, the Court remarked 

that "the Third Round Rules' validity hinges in whether they are 
20 A-3323-15T1

consistent with the FHA." Id. at 612-17. In 2014, the Court 

granted COAH an additional five months to adopt new rules. In 

re N.J.A.C. 5:96 and 5:97, 220 N.J. 355, 355-56 (2014). 

COAH failed to meet the extension deadline, which led the 

Court to grant Fair Share's motion in aid of litigants' rights

in In re N.J.A.C. 5:96 II, supra, 221 N.J. at 5-6. The Court 

recognized the administrative process had become nonfunctioning. 

Id. at 5. As a result, the FHA's exhaustion-of-remedies 

requirement had been rendered futile. Ibid. Therefore, there 

no longer existed a legitimate basis to block access to the 

courts for resolution of municipal compliance with 

constitutional affordable housing. Ibid. Recognizing there 

existed various stages of municipal preparation during the gap 

period, the Court established a transitional process for 

exclusionary zoning actions to proceed. Ibid. The Court also 

emphasized:

Importantly, nothing herein should be 

understood to prevent COAH from fulfilling 

its statutory mission to adopt 

constitutional rules to govern 

municipalities' Third Round obligations in 

compliance with the FHA. Nor should the 

action taken by this Court, in the face of 

COAH's failure to fulfill its statutory 

mission, be regarded as impeding the 

Legislature from considering alternative 

statutory remedies to the present FHA. 

[Id. at 6 (citation omitted).]
21 A-3323-15T1

The Court developed a process which tracked the processes 

provided for in the FHA. Id. at 29. It did so to facilitate a 

return to agency proceedings in the event COAH promulgated new 

Third Round Rules. Ibid. In establishing the process for 

exclusionary zoning actions to proceed, the Court stated:

[I]t is not this Court's province to create 

an alternate form of statewide 

administrative decision maker for unresolved 

policy details of replacement Third Round 

Rules . . . . The courts that will hear 

such declaratory judgment applications or 

constitutional compliance challenges will 

judge them on the merits of the records 

developed in individual actions before the 

courts. However, certain guidelines can be 

gleaned from the past and can provide 

assistance to the designated Mount Laurel 

judges in the vicinages.

[Id. at 29-30 (emphasis added).]

The Supreme Court established procedures for addressing two 

classes of municipalities that were stranded by COAH's inability 

to adopt valid Third Round Rules. Id. at 24-29 (outlining the 

procedures for municipalities that "made the effort to comply 

promptly with the Third Round Rules and . . . received a grant 

of substantive certification," and municipalities that had 

"participating" status with COAH). 

Although presented with numerous opportunities to do so, at 

no point did the Court, the Legislature, or the Appellate 

Division impose an additional separate gap-period obligation. 
22 A-3323-15T1

Rather, in establishing a municipality's fair share affordable 

housing obligation, the focus consistently remained on present 

and prospective housing need. 

II.

We now turn to the proceedings conducted by the judge

leading to his ruling that municipalities are "constitutionally 

mandated" to address the gap period as a "separate and discrete"

component of their fair share Mount Laurel obligation. 

Following the procedures established by the Court in In re 

N.J.A.C. 5:96 II, supra, 221 N.J. at 21-34, several Ocean County 

municipalities filed declaratory judgment actions seeking 

resolution of their Mount Laurel obligations. The judge

undertook preliminarily to determine the present and prospective 

affordable housing needs of the municipalities. To reach this 

determination, the court reviewed several expert reports that 

expressed differing opinions on the subject. 

The judge appointed Richard B. Reading as the Special 

Regional Master, who was to "assist the court in making the 

preliminary determination envisioned by the Supreme Court of the 

present and prospective needs." The judge allowed submissions 

of expert reports and expected to conduct a plenary hearing at 

which the court would address the conflicting expert opinions as 
23 A-3323-15T1

to the methodology for calculating the municipalities' 

affordable housing obligations. 

On December 29, 2015, Mr. Reading submitted a report 

entitled "COAH's Un[-]adopted Third Round Methodology 

Calculation of 'Gap' Period Housing Needs." In this report, Mr. 

Reading listed these questions the judge identified in a case 

management order: 

1) Is the methodology provided in Appendix 

D

[8] of the current iteration of the [unadopted] Third Round Rules an appropriate 

and correct methodology?

2) Do the trial courts have the authority to 

require a municipality to address the . . . 

'gap' obligation component as part of a 

municipality's prior obligation?[9]

Mr. Reading concluded that the "methodology in Appendix D 

[did] not follow the methodologies utilized in the calculation 

of affordable housing needs employed in the [p]rior [r]ounds." 

He stated that "[a] review of the history of Mount Laurel did 

not disclose a methodology that expanded the calculation of fair 

share beyond [p]resent and [p]rospective [n]eed." He remarked 

that Sections 304 and 307 of the FHA established "prospective

 

8 Mr. Reading identified the un-adopted Third Round Rules as 

N.J.A.C. 5:99, Appendix D.

9 The third question, "[w]hat is the proper allocation of the 

1000 unit cap . . . [and] how should the gap be applied to any 

'gap period' need if one exists," is not at issue. 
24 A-3323-15T1

need as a period of ten years and includes a projection of 

housing needs based upon development and growth that is 

reasonably likely to occur." He determined that the "inclusion 

of the prior [gap period] within prospective need is contrary to 

prior round methodologies, the language of the FHA and history 

of determining affordable housing needs." As to "identifying 

and quantifying" the housing need from the gap period, Mr. 

Reading stated:

[The unmet need arising during the gap 

period] was discussed in terms of the 

disposition of [low- and moderate-income] 

housing needs that existed . . . in the 

past. These households would be partially 

included by the [low- and moderate-income]

households in over[]crowded or deficient 

housing units that are encompassed in the

new calculation of [p]resent [n]eed. Those

[low- and moderate-income] households that 

have occupied sound (non-deficient) housing 

units are already [in] housing and would not 

represent an identifiable need. Some [lowand moderate-income] households formed 

during the gap period may no longer 

represent an affordable housing need due to 

a variety of reasons including death, 

changes in income, increase or decrease in 

household size, retirement and/or relocation 

outside of New Jersey. . . . Although it 

may be possible to generate an estimate of 

such a residual need, such an estimate would 

be speculative.

[(Emphasis added).]

Mr. Reading stated "there is a uniform consensus among the 

interested parties that the methodology provided in Appendix D 
25 A-3323-15T1

is not an appropriate and correct methodology for the 

calculation of affordable housing [gap-period] needs." He 

explained further that even though there existed this consensus 

rejecting COAH's un-adopted methodology, "an appropriate 

methodology for determining an affordable housing need [during 

the 1999-2015 'gap period' was] not . . . presented."10 

On February 17, 2016, Mr. Reading issued a report entitled 

"Bridging the Gap, 1999-2015 'Gap' Period Affordable Housing 

Needs." In this report, Mr. Reading responded to expert

opinions contained in reports submitted by Dr. David N. Kinsey, 

on behalf of Fair Share, and Econsult. After reviewing these 

opinions, Mr. Reading recommended to the judge that he "consider 

the inclusion of the [g]ap[-p]eriod, calculated distinctly and 

separately from [p]resent and [p]rospective [n]eed," which is a 

markedly different recommendation than what he expressed 

previously. 

Mr. Reading stated Dr. Kinsey provided two alternatives for 

calculating affordable housing needs arising during the gap 

 

10 Mr. Reading acknowledged, in a later report, Fair Share's

contention that the gap-period should be included "within the 

extended 1999-2025 [p]rospective [n]eed." He also considered

the NJLM and a report prepared by Econsult Solutions (Econsult), 

on behalf of a consortium of municipalities, stating there is no 

basis for "retrospective analysis of housing need, which has 

always been based on 'present and prospective need.'" (Emphasis

added). 
26 A-3323-15T1

period: calculating the entire period from 1999-2025 as a 

prospective need, without a separation of the gap period and 

prospective need projection; and replicating COAH's 1994 

recalculation of the 1987-1993 housing need (although Mr. 

Reading recognized that such a recalculation was done to adjust 

a prior (1987-1993) obligation, not to establish a methodology 

for addressing a lapse in assigned obligations). 

Econsult provided a comprehensive methodology for 

establishing the 1987-1999 prior round obligations, the 2015 

present need, and the 2015-2025 prospective need. Econsult's 

methodology did not include calculations for the gap period. 

Econsult critiqued Dr. Kinsey's two alternatives. As to the 

first alternative, Econsult maintained essentially that gapperiod low- and moderate-income households living in deficient 

housing would be encompassed in present need, while low- and 

moderate-income households living in adequate housing would not 

represent an identifiable need. As to the second alternative, 

Econsult reiterated its positon that present need and 

prospective need combine to represent the entire fair share need 

of, in its opinion, Dr. Kinsey's calculation of retrospective or 

gap-period needs. 

In his February 17, 2016 report, Mr. Reading stated that 

the gap-period issue had become a legal issue. He acknowledged 
27 A-3323-15T1

that all parties agreed low- and moderate-income households were 

formed during the gap period and have secured housing, some of 

which were deficient or overcrowded, which would be reflected in

present need. As to the proper methodology for calculating

municipalities' affordable housing need arising during the gap

period, he concluded:

The calculation of the current needs of the 

affordable hous[ing] formed during the [gap 

period] is not a process that is [e]mbedded

in the [p]rior [r]ound methodology, [and] is 

not projected ([p]rospective) need, but 

should be undertaken as a separate and 

discrete component of affordable housing 

need. Prior submissions provided by [Fair 

Share] and Econsult on December 8, 2015 

contended that the calculation for the [g]ap 

[p]eriod affordable housing needs were 

unnecessary because they were properly a 

part of the 1999-2025 [p]rospective [n]eed 

. . . or were unnecessary altogether because 

the FHA does not make any provision for a 

retrospective need . . . .

. . . . 

Assertions that a determination of [g]ap 

[p]eriod affordable housing need cannot be 

reduced to a precise mathematical 

calculation devoid of all assumptions and 

estimates is not distinctly different than 

the preparation of estimates for . . . 

[p]resent . . . and [p]rospective [n]eed[,] 

[which] are likewise predicated upon 

estimates [and] . . . would . . . be no more 

impaired. 

As a result, Mr. Reading recommended the court should sanction a 

completely new and different methodology than that used during 
28 A-3323-15T1

the first two rounds or in the FHA, one that "should be 

calculated as [a] separate and discrete component of affordable 

housing need utilizing data and procedures appropriate to a 

prior, rather than future period." In other words, he 

recommended a methodology that retrospectively calculated gapperiod housing need, rather than, as he stated in his December 

29, 2015 report, the unmet gap-period housing needs being 

included in "the new calculation of present need." 

The next day, on February 18, 2016, the court adopted Mr. 

Reading's new recommendation and issued its opinion. As to the 

gap period, the court stated:

The court finds municipalities are 

constitutionally mandated to address [the 

gap-period] obligation. This "gap period"

need is to be calculated as a separate and 

discrete component of a municipality's fair 

share obligation. This component[,] 

together with a municipality's unmet prior 

round obligations [from] 1987 to 1999[,] and

its present need and prospective need[,]

shall comprise its "fair share" affordable 

housing obligation for the third [round]

housing cycle.

. . . . 

[I]t is ironic that both parties (or 

interests) appearing in [a] 2004 Appellate 

Division case are now advancing arguments 

before this court [that] they vehemently 

opposed in [In re Six Month]. 

. . . . 
29 A-3323-15T1

Even if the municipalities were 

[therefore] not [now] estopped from 

advancing their position[,] and despite 

their efforts here to distinguish . . . [In 

re Six Month] . . . the court finds the 

underlying principles in [In re Six Month] 

. . . are the same as the matter here. 

[(Emphasis added).] 

III.

On appeal, the entities urging us to reverse the order 

argue that the judge erroneously imposed a new "separate and 

discrete" component of a municipality's fair share affordable 

housing obligation during the gap period. They contend the 

judge erred by: (1) failing to apply the plain language of the 

FHA; (2) ignoring the guidelines and principles established by 

In re N.J.A.C. 5:96 II; (3) applying the doctrine of judicial 

estoppel; and (4) acting as a replacement agency for COAH by 

resolving unresolved policy details of replacement Third Round 

Rules. 

They assert that a municipality's fair share affordable 

housing obligation for the third-round cycle is comprised of:

(1) the unmet prior round (before 1999) obligations; (2) present 

need; and (3) prospective need. They maintain, as Mr. Reading

expressed in his December 29, 2015 report, that gap-period

affordable housing needs would be captured in a town's 

calculation of its present need. They emphasize that imposing a 

retrospective gap-period obligation does not allow for a 
30 A-3323-15T1

realistic opportunity that the lower income housing will 

actually be constructed. 

The entities urging us to affirm the order under review 

argue primarily that: (1) a municipality's prior round 

unfulfilled affordable housing obligations includes the gap 

period; (2) the FHA, as determined by COAH, provides for 

cumulative and uninterrupted calculations of prospective need;

(3) COAH's interpretation of the FHA providing for gapless 

affordable housing need is reasonable; and (4) the judge's 

ruling complies with the FHA and In re N.J.A.C. 5:96 II. 

Our standard of review is well settled. The sole question 

on appeal, whether a retrospective gap-period obligation is 

authorized by the core principles of the Mount Laurel doctrine, 

as codified in the FHA, and In re N.J.A.C. 5:96 II, is a legal 

issue not entitled to any special deference. Manalapan Realty, 

L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). 

IV.

Applying the plain language of the FHA, the guidelines and 

principles established by In re N.J.A.C. 5:96 II, and respecting 

the separation of powers doctrine,11 we conclude that the judge 

 

11 The framers of the New Jersey Constitution articulated the 

separation of powers doctrine expressing that 

(continued)
31 A-3323-15T1

erroneously imposed a requirement that a municipality undertake 

a new, "separate and discrete" gap-period calculation – in 

addition to unmet prior round obligations, present, and 

prospective needs – to establish a municipality's fair share 

affordable housing obligation. We also reject the contention 

that judicial estoppel precludes reversal of the February 18, 

2016 order under review. 

A.

We start with the plain language of the FHA. Our paramount 

goal in interpreting a statute is to ascertain the Legislature's 

intent, and "generally[] the best indicator of that intent is 

the statutory language." DiProspero v. Penn, 183 N.J. 477, 492 

(2005) (citation omitted). When interpreting a statute, we give 

words "their ordinary meaning and significance." Tumpson v. 

Farina, 218 N.J. 450, 467 (2014) (quoting DiProspero, supra, 183 

N.J. at 492). Only when the statutory language is ambiguous and 

yields more than one plausible interpretation do we turn to 

 

(continued)

[t]he powers of the government shall be 

divided among three distinct branches, the 

legislative, executive, and judicial. No 

person or persons belonging to or 

constituting one branch shall exercise any 

of the powers properly belonging to either 

of the others, except as expressly provided 

in this Constitution.

[N.J. Const., art. III, ¶ 1.]
32 A-3323-15T1

extrinsic sources, such as legislative history. DiProspero, 

supra, 183 N.J. at 492-93. Here, there is no ambiguity. 

The plain language of the FHA refers to present and 

prospective need. Responding to the significantly high fair 

share obligations in the aftermath of AMG Realty, the 

Legislature enacted the FHA, finding that one of the "essential 

ingredients" to its response was "the establishment of 

reasonable fair share housing guidelines and standards." 

N.J.S.A. 52:27D-302(d). Consequently, the Legislature focused 

on present and prospective need, N.J.S.A. 52:27D-307(b), and 

charged COAH to adopt guidelines for "[m]unicipal determination 

of its present and prospective fair share of the housing need in 

a given region which shall be computed for a 10-year period," 

N.J.S.A. 52:27D-307(c)(1) (emphasis added). 

The FHA defines prospective need not by looking backwards, 

but rather as a "projection of housing needs based on 

development and growth which is reasonably likely to occur in a 

region or a municipality." N.J.S.A. 52:27D-304(j) (emphasis 

added). In determining prospective need, COAH considered such 

things as municipalities' "approvals of development 

applications, real property transfers and economic projections 

prepared by the State Planning Commission." In re N.J.A.C. 5:96 

I, supra, 215 N.J. at 591 (quoting N.J.A.C. 5:92-1.3). 
33 A-3323-15T1

The FHA did not define present need, but in the valid First 

Round Rules, COAH defined present need as "the total number of 

deficient housing units occupied by low[-] or moderate[-income]

households." Id. at 590 (quoting N.J.A.C. 5:92-1.3). COAH used 

several factors to establish present need, such as 

"overcrowding, age of unit, and lack of plumbing, kitchen or 

heating facilities as indicators of dilapidated housing." Id.

at 590-91. 

The judge noted that COAH, in each of its three 

unsuccessful attempts to promulgate Third Round Rules, 

referenced the gap period, albeit with different unapproved 

methodologies. Although the judge acknowledged COAH's reference 

to the gap period during its three iterations of the un-adopted 

Third Round Rules, we note that an agency is not at liberty to 

impose additional requirements onto a statute that do not exist 

on its face. See In re N.J.A.C. 5:96 I, supra, 215 N.J. at 614-

15 (invalidating the growth share methodology in the Third Round 

Rules and explaining that COAH may not enact regulations plainly 

at odds with the FHA); see also Oberhand v. Dir., Div. of 

Taxation, 193 N.J. 558, 568 (2008) (explaining "an 

administrative agency's interpretation will not be followed when 

the agency extends a statute 'to give it a greater effect than 

its language permits'" (quoting GE Solid State v. Dir., Div. of 
34 A-3323-15T1

Taxation, 132 N.J. 298, 306 (1993))); Fedders Fin. Corp. v. 

Dir., Div. of Taxation, 96 N.J. 376, 392 (1984) (stating "[i]t 

is well established that [an agency's] regulatory authority 

cannot go beyond the Legislature's intent as expressed in the 

statute"); Serv. Armament Co. v. Hyland, 70 N.J. 550, 563 (1976) 

(explaining "an administrative interpretation which attempts to 

add to a statute something which is not there can furnish no 

sustenance to the enactment"). To the extent COAH interpreted

the FHA to include a requirement beyond present and prospective 

need and fulfilling prior round obligations, we conclude such an 

interpretation is "at odds with the plain meaning of the [FHA]." 

Oberhand, supra, 193 N.J. at 568. The same proscription applies 

to the courts. 

Importantly, during the sixteen-year gap period, the 

Legislature amended the FHA twelve times. It did not amend the

FHA, however, to require a retrospective determination of gapperiod obligations. Failure to so amend the FHA does not amount 

to Legislative authorization to retroactively adopt a new 

methodology for calculating affordable housing gap-period needs, 

even if COAH's un-adopted Third Round Rules sought to 

encapsulate the gap period. See GE Solid State, supra, 132 N.J.

at 312-13 (rejecting that the Legislature's failure to interfere 

with an administrative interpretation is proof that the agency's 
35 A-3323-15T1

interpretation conforms with legislative intent or establishes 

legislative acquiescence); see also Airwork Serv. Div., Div. of 

Pac. Airmotive Corp. v. Dir., Div. of Taxation, 97 N.J. 290, 296 

(1984) (explaining that administrative acquiescence is only 

relevant when "the Legislature's intent cannot otherwise be 

determined by a critical examination of the purposes, policies, 

and language of the enactment" (emphasis added)). 

Fair Share, supported by Dr. Kinsey, interprets 

"prospective need" to mean that a town is required to look at 

affordable housing needs prospectively starting from 1999, in 

addition to a separate ten-year prospective need calculation

from the present. In other words, Fair Share argues a town's 

"prospective need" would cover a period of twenty-seven years, 

from 1999 to ten years from now. We conclude such an 

interpretation is clearly at odds with the FHA's unambiguous

definition of prospective need. As it is defined in the FHA, 

prospective need refers to a "projection" of growth in the 

future, namely a "projection of housing needs based on 

development and growth which is reasonably likely to occur in a 

region or a municipality." By its nature, it does not involve 

retrospectively including a gap-period calculation. 

In sum, to impose a gap-period requirement would inevitably 

add a new requirement not previously recognized under the FHA. 
36 A-3323-15T1

The Supreme Court has cautioned courts not to become a 

replacement agency for COAH in promulgating substantive rules. 

Rather, based on COAH's inaction, courts must work within the 

provisions of the FHA and should employ the first and second 

round methodologies to determine a municipality's compliance 

with its Mount Laurel obligations. Until COAH adopts Third 

Round Rules, or until the Legislature acts, the courts may not 

act as a legislature by imposing new, substantive obligations 

not recognized under the FHA. 

 B.

Next, the judge did not follow the guidelines established 

by the Court in In re N.J.A.C. 5:96 II. We will address the 

relief requested in In re N.J.A.C. 5:96 II, the Court's 

response, and then our application of the guidelines to the 

judge's ruling. 

(i)

In In re N.J.A.C. 5:96 II, Fair Share, the NJBA, the NJLM, 

and various towns expressed their respective positions as to the

guidance they believed the Court should provide to the 

designated Mount Laurel judges. We briefly summarize these 

competing positions to emphasize the Court's unwillingness to 

decide "unresolved policy details of replacement Third Round 

Rules" or to become a "replacement agency for COAH" by 
37 A-3323-15T1

essentially endorsing a new methodology for separately and 

discretely calculating affordable housing needs during the gap

period. 

[Fair Share] ask[ed] that the second-round 

methodology, with limited modifications, be 

directed for use in such [remand] 

proceedings and that newly authorized 

judicial actions proceed expeditiously and 

on a notice-and-opportunity-to-be-heard 

basis.

. . . . 

. . . [NJBA] contend[ed] that the 

administrative stalemate ha[d] permitted 

municipalities to "shelter themselves" from 

suit under COAH's jurisdiction without 

providing any additional affordable housing 

in years. They urge[d] the Court to fashion 

relief that [would] require courts to 

examine what towns have done to date in 

attempting to satisfy their constitutional 

obligations.

. . . . 

[Various towns] contend[ed] that trial 

courts would be tasked with determining 

whether a municipality's fair share 

allocation will be "cumulative" or 

applicable only to one compliance period.

The[y] also contend[ed] that adjudicating 

such Mount Laurel matters would require 

courts to confront the myriad differences 

between the methodologies utilized in the 

prior rounds and those contained in the 

various iterations of COAH's Third Round 

Rules.

. . . .

[NJLM] argue[d] that the 314 

municipalities [which had submitted to 
38 A-3323-15T1

COAH's substantive certification under the 

earlier Third Round Rules] should not 

forfeit their protection from suit. 

According to NJLM, exclusionary zoning 

litigation would punish the municipalities, 

which [were] not responsible for COAH's most 

recent failure to adopt compliant Third 

Round Rules. 

Notably, NJLM propose[d] an alternate

solution, arguing that COAH ha[d] expended 

significant resources in developing the most 

recent proposed regulations, which efforts 

should not be wasted. NJLM suggest[ed] that 

the Court appoint "a former high-ranking 

policy-making official" to recruit three 

"professional planners" to assist in

reviewing COAH's proposed Third Round Rules, 

the 3000 public comments, and any responses 

prepared by COAH's staff. NJLM propose[d]

that this Court authorize those planners to 

revise the proposed Third Round Rules for 

review by the Court-selected "policy-making 

official." If the policy maker is 

satisfied, NJLM further propose[d] that he 

or she would present the revised regulations 

to this Court for approval, and for entry of 

an order directing COAH to adopt the Third 

Round Rules in that form.

[In re N.J.A.C. 5:96 II, supra, 221 N.J. at 

12-16 (emphasis added).]

The Court responded to Fair Share's plea for guidance and, in

light of the various stages of municipal preparation that had 

existed "as a result of the long period of uncertainty 

attributable to COAH's failure to promulgate Third Round Rules,"

the Court devised a transitional process before allowing 

exclusionary zoning actions to proceed. Id. at 20. In 

articulating the transitional process, and by expressing the 
39 A-3323-15T1

concomitant "guidelines . . . gleaned from the past [that] can 

provide assistance to the designated Mount Laurel judges," id.

at 29-30, the Supreme Court did not include a new methodology 

for calculating additional housing obligations during the gap

period. In our view, consideration of imposing such a new 

policy — that essentially addresses "unresolved policy details 

of replacement Third Round Rules" — is best left to the other 

two branches, where important public policy considerations can 

be fairly, fully, and openly debated. 

(ii)

We now address the actual guidelines and principles listed 

by the Court for use by designated Mount Laurel judges handling 

declaratory judgment applications on constitutional-compliance 

applications. In enumerating these guidelines, the Court 

reiterated it did not intend to punish the towns that were "in a 

position of unfortunate uncertainty due to COAH's failure to 

maintain the viability of the administrative remedy." Id. at 

23. Instead, the Court explained: 

Our goal is to establish an avenue by which 

towns can demonstrate their constitutional

compliance [i.e., present and prospective 

obligations] to the courts through 

submission of a housing plan and use of 

processes, where appropriate, that are 

similar to those which would have been 

available through COAH for the achievement 

of substantive certification. Those 

processes include conciliation, mediation, 
40 A-3323-15T1

and the use, when necessary, of special 

masters. The end result of the processes 

employed by the courts is to achieve 

adoption of a municipal housing element and 

implementing ordinances deemed to be 

presumptively valid if thereafter subjected 

to challenge by third parties. 

[Id. at 23-24 (emphasis added).] 

The Court then identified specific procedures, guidelines, and 

principles. 

In In re N.J.A.C. 5:96 II, the Court reasserted that 

"previous methodologies employed in the First and Second Round 

Rules should be used to establish present and prospective

statewide and regional affordable housing need." Id. at 30

(emphasis added). As a result, municipalities were required to

demonstrate to the court computations of housing need and 

municipal obligations "based on those methodologies." Ibid. 

(emphasis added). The Court reminded the designated Mount 

Laurel judges they had the same discretion that COAH enjoyed 

when "assessing a town's plan, if persuaded that the techniques 

proposed by a town will promote for that municipality and region 

the constitutional goal of creating the realistic opportunity

for producing its fair share of the present and prospective need

for low- and moderate-income housing." Ibid. (emphasis added). 

Importantly, the Court did not eradicate the prior round

obligations. Ibid. Instead, the Court stated "municipalities 
41 A-3323-15T1

are expected to fulfill those obligations. As such, prior 

unfulfilled housing obligations should be the starting point for

a determination of a municipality's fair share responsibility." 

Ibid. In reaching this conclusion, the Court cited Judge Cuff's 

recognition that "municipalities are responsible for fulfilling 

their prior round obligation," In re N.J.A.C. 5:94, supra, 390 

N.J. Super. at 28, and Judge Skillman's approval, as a starting 

point, for the imposition of "the same prior round obligations 

[COAH] had established as the second round obligations in 1993,"

In re N.J.A.C. 5:96, supra, 416 N.J. Super. at 498-500. 

Fulfilling prior round obligations, as described by the 

Court and in our 2007 and 2010 remand opinions, is decidedly 

different than imposing a new, retrospective, "separate and 

discrete" methodology for establishing affordable housing 

obligations during the gap period. A court-imposed "separate 

and discrete" retrospective gap-period calculation, on top of a 

town's existing and present and prospective fair share 

affordable housing obligations, would amount to the Court acting 

as a replacement agency for COAH, and would contravene the 

Court's unwillingness to decide unresolved policy issues 

relating to replacement Third Round Rules. 

In addition to this assistance, the Court identified other 

principles that Mount Laurel designated judges should follow, 
42 A-3323-15T1

such as: our prior treatment of reallocation of present need12;

bonus credits; cost-burdened poor; and the reduction of fewer 

surrogate indicators. In re N.J.A.C. 5:96 II, supra, 221 N.J.

at 30-33. The Court emphasized that the courts should "employ 

flexibility in assessing a town's compliance and should exercise 

caution to avoid sanctioning any expressly disapproved practices 

from COAH's invalidated Third Round Rules." Id. at 33. 

Finally, the Court reiterated its "hope that an administrative 

remedy will again become an option for those proactive 

municipalities that wish to use such means to obtain a 

determination of their housing obligations and the manner in 

which those obligations can be satisfied." Id. at 34 (emphasis 

added). 

(iii)

Here, the judge's ruling respectfully did not comport with 

In re N.J.A.C. 5:96 II. The Court repeated its instructions 

that "previous methodologies employed in the First and Second 

Round Rules should be used to establish present and prospective 

statewide and regional affordable housing need." Id. at 30. 

Further, it stated that "[t]he parties should demonstrate to the 

 

12 "The [S]econd [R]ound [R]ules define[d] reallocated present 

need as 'the share of excess deterioration in a region 

transferred to all communities of the region with the exception 

of Urban Aid Cities.'" In re N.J.A.C. 5:96 II, supra, 221 N.J.

at 30 n.4 (alterations in original) (citations omitted). 
43 A-3323-15T1

court computations of housing need and municipal obligations 

based on those methodologies." Ibid. The Court stated that the 

starting point for a determination of a municipality's fair 

share responsibility is the prior round unfulfilled obligations. 

Ibid. Requiring municipalities to undertake a retrospective 

"separate and discrete" additional calculation for affordable 

housing need does not follow the First or Second Round Rules. 

It mandates an entirely new obligation unauthorized by the FHA. 

The judge concluded that "New Jersey's affordable housing 

need is cumulative and there can be no gaps in time left 

unaddressed." He based this conclusion on his interpretation of

Mount Laurel II, stating the Court "found the obligation to meet 

the prospective lower income housing need of the region is, by 

definition, one that is met year after year in the future, 

throughout the years of the particular projection used in 

calculating prospective need." However, the Court's statement 

was aimed at the practical effects of establishing prospective 

need, stating:

 The Mount Laurel obligation to meet the 

prospective [looking forward not 

retrospectively] lower income housing need 

of the region is, by definition, one that is 

met year after year in the future, 

throughout the years of the particular 

projection used in calculating prospective 

need. In this sense the affirmative 

obligation to provide a realistic 

opportunity to construct a fair share of 
44 A-3323-15T1

lower income housing is met by a "phase-in" 

over those years; it need not be provided 

immediately. Nevertheless, there may be 

circumstances in which the obligation 

requires zoning that will provide an 

immediate opportunity -- for instance, 

zoning to meet the region's present lower 

income housing need. In some cases, the 

provision of such a realistic opportunity

might result in the immediate construction 

of lower income housing in such quantity as

would radically transform the municipality 

overnight. Trial courts shall have the 

discretion, under those circumstances, to 

moderate the impact of such housing by 

allowing even the present need to be phased 

in over a period of years. Such power, 

however, should be exercised sparingly. The 

same power may be exercised in the 

satisfaction of prospective need, equally 

sparingly, and with special care to assure 

that such further postponement will not 

significantly dilute the Mount Laurel

obligation. 

[Mount Laurel II, supra, 92 N.J. at 218-19

(emphasis added).]

The language quoted by the judge pertained to the Court's 

recognition that phasing in was an option for municipalities in 

calculating present and prospective need. Therefore, the 

judge's reliance on Mount Laurel II for the proposition that 

there can be no gap periods is respectfully misplaced. 

Furthermore, the FHA, enacted after Mount Laurel II, and the 

Court's opinion in In re N.J.A.C. 5:96 II do not support such a 

conclusion. 
45 A-3323-15T1

C.

Whether to establish a new methodology that imposes 

retrospective calculations for determining affordable housing 

needs during the gap period, which would be in addition to 

satisfying prior round unmet present and prospective 

obligations, is best left for consideration by the Legislative 

and Executive branches. As the Court explained in 2013, when it 

invalidated COAH's Third Round Rules:

The Legislature may determine to 

authorize new avenues for addressing 

regional need and the promotion of 

affordable housing. And, it may do so in 

ways that we do not attempt to circumscribe 

in this opinion because we do not know the 

breadth of considerations that may be 

brought forth through informational 

legislative hearings on the subject. 

Nevertheless, it is the Legislature that 

must devise the parameters to such an 

approach. It must craft new legislation if 

that is the course it wishes to take. Our 

courts can and should exercise caution and 

defer to such solutions when appropriately 

drafted by the Legislature. See N.J. Ass'n 

on [Corr.] v. Lan, 80 N.J. 199, 220 (1979) 

(acknowledging importance of deference to 

legislative enactments addressing general 

welfare (citation omitted)); Roe v. Kervick, 

42 N.J. 191, 230 (1964) (recognizing value 

of deference when reasonable minds could 

differ and issue to be remedied "involves a 

concept which varies with the needs of the 

times").

Although the Legislature may consider 

enacting an alternative form of remedy for 

the promotion of affordable housing in the 

housing regions of this state, see Hills 
46 A-3323-15T1

[Dev. Co. v. Twp. of Bernards, 103 N.J. 1,] 

65 [(1986)] ("No one should assume that our 

exercise of comity today signals a weakening 

of our resolve to enforce the constitutional 

rights of New Jersey's lower income 

citizens. The constitutional obligation has 

not changed; the judiciary's ultimate duty 

to enforce it has not changed; our 

determination to perform that duty has not

changed."), enforcement of the 

constitutional obligation is still a matter 

that may be brought to the courts.

[In re N.J.A.C. 5:96 I, supra, 215 N.J. at 

616-17.]

 Deferring to the Legislature on such policy considerations 

is especially important here because COAH is a "legislatively 

created, unique device for securing satisfaction of Mount Laurel

obligations." In re N.J.A.C. 5:96 II, supra, 221 N.J. at 29. 

As the Court stated, it is not our role to become a replacement 

agency for COAH by creating "an alternate form of statewide 

administrative decision maker for unresolved policy details of 

replacement Third Round Rules." Ibid. We discern no 

constitutional basis for the judiciary, much less this court, to 

intrude into the policy-making arena, an area traditionally 

reserved in our tripartite system of governance to the 

legislative13 and executive branches. 

 

13 Although not dispositive on the legal question presented on 

appeal, there are two identical pending bills in the Assembly 

and Senate directly on point. The Legislative statement 

accompanying those bills states in pertinent part:

(continued)
47 A-3323-15T1

D. 

We reject the contention that the doctrine of judicial 

estoppel bars the challenge to the court's holding as to the 

gap-period issue. We review a trial court's decision to invoke 

judicial estoppel using an abuse of discretion standard. State, 

Div. of Motor Vehicles v. Caruso, 291 N.J. Super. 430, 438 (App. 

Div. 1996). 

The law as to the doctrine of judicial estoppel is well 

settled. To protect the integrity of the court system, "[w]hen 

 

(continued)

 Although the [FHA] clearly states that 

the State Constitution's affordable housing 

obligation is comprised of "present and 

prospective need" for affordable housing 

only, some courts have misunderstood the 

intent of the Legislature behind the [FHA], 

and imposed a retroactive obligation for the 

so-called gap period. The purpose of this 

bill is to eliminate any possible 

misconception with respect to the 

Legislature's intent to ensure that 

determination of a municipality's fair share

of affordable housing will be based upon the 

present and prospective need for affordable 

housing, as clearly set forth in the [FHA], 

and that a fair share obligation will not 

include a retrospective need that may have 

arisen during any "gap period" between 

housing cycles.

[Statement to Assemb. No. 3821, and

Statement to S.B. No. 2254 at 7 (May 23, 

2016) (emphasis added).]
48 A-3323-15T1

a party successfully asserts a position in a prior legal 

proceeding, that party cannot assert a contrary position in 

subsequent litigation arising out of the same events." Kress v. 

La Villa, 335 N.J. Super. 400, 412 (App. Div. 2000) (emphasis 

added), certif. denied, 168 N.J. 289 (2001). It has been 

summarized as follows: "The principle is that if you prevail in 

Suit # 1 by representing that A is true, you are stuck with A in 

all later litigation growing out of the same events." Kimball 

Int'l, Inc. v Northfield Metal Prods., 334 N.J. Super. 596, 607

(App. Div. 2000) (citation omitted), certif. denied, 167 N.J. 88 

(2001). 

Judicial estoppel is not a favored remedy because of its 

draconian consequences. It is to be invoked only in limited 

circumstances: 

It is . . . generally recognized that 

judicial estoppel is an "extraordinary 

remedy," which should be invoked only "when 

a party's inconsistent behavior will 

otherwise result in a miscarriage of 

justice." Ryan Operations G.P. v. SantiamMidwest Lumber Co., 81 F.3d 355, 365 (3d 

Cir. 1996) (quoting Oneida Motor Freight, 

Inc. v. United Jersey Bank, 848 F.2d 414, 

424 (3d Cir.) (Stapleton, J., dissenting), 

cert. denied, 488 U.S. 967, 109 S. Ct. 495, 

102 L. Ed. 2d 532 (1988)); see also

[Teledyne Indus., Inc., v. NLRB, 911 F.2d 

1214,] 1218 [(6th Cir. 1990)] ("Judicial 

estoppel is applied with caution to avoid 

impinging on the truth-seeking function of 

the court because the doctrine precludes a 

contradictory position without examining the 
49 A-3323-15T1

truth of either statement."). Thus, as with 

other claim and issue preclusion doctrines, 

judicial estoppel should be invoked only in 

those circumstances required to serve its 

stated purpose, which is to protect the 

integrity of the judicial process.

[Id. at 608 (footnote omitted).]

In Ali v. Rutgers, 166 N.J. 280, 288 (2000), our Supreme Court 

confirmed that judicial estoppel is an "extraordinary remedy." 

The facts presented on this appeal do not warrant application of 

this remedy. 

In invoking the doctrine of judicial estoppel and imposing 

a "separate and discrete" gap-period obligation, the judge

relied on our opinion in In re Six Month. We conclude that the 

court's reliance is misplaced. We reach that conclusion 

primarily because the parties and issues in In re Six Month were 

substantially different than here, and since issuing our opinion 

in In re Six Month, the Court provided Mount Laurel judges with

further guidelines and principles in In re N.J.A.C. 5:96 II. 

As to the dissimilarity of issues, our focus in In re Six 

Month was on COAH's interim procedural rules designed to address 

a six-year period between 1999 and 2004. Supra, 372 N.J. Super.

at 68. In In re Six Month, we identified the sole issue: 

These [seven] appeals concern only N.J.A.C.

5:91-14.3, which provides a mechanism for 

municipalities previously certified in the 

second round to receive an extension of 

their substantive certification status and, 
50 A-3323-15T1

therefore, further protection from civil 

action remedies, for up to one year 

following the adoption of the third-round 

rules, well beyond the previously scheduled 

1999 expiration of second-round standards 

and methodology.

[Ibid.]

Here, the issue is whether a retrospective "separate and 

discrete" gap-period obligation is authorized by (1) the core 

principles of the Mount Laurel doctrine, as codified in the FHA; 

and (2) In re N.J.A.C. 5:96 II. There, we were not asked to 

address, and we did not sanction, a gap-period affordable 

housing obligation, on top of prior unfulfilled obligations and 

present and prospective needs. Rather, we temporarily suspended 

substantive certifications granted by COAH pursuant to N.J.A.C.

5:91-14.3, subject to rule modifications. Id. at 105. As to 

the dissimilarity of parties, none of the Ocean County 

municipality entities participated in In re Six Month.

V.

In sum, we conclude that the core principles of the Mount 

Laurel doctrine, as codified in the FHA, and the guidelines and 

principles established by the New Jersey Supreme Court in In re 

N.J.A.C. 5:96 II, do not authorize a retrospective new "separate 

and discrete" affordable housing gap-period obligation. 

Following In re N.J.A.C. 5:96 II, a town should start with its 

unfulfilled prior round obligations and then establish its 
51 A-3323-15T1

present and prospective need in establishing a municipality's

fair share Mount Laurel obligation. 

Finally, we emphasize that our holding today does not 

ignore housing needs that arose in the gap period or a 

municipality's obligation to otherwise satisfy its 

constitutional fair share obligations. As Mr. Reading candidly 

acknowledged, "[low- and moderate-income] households formed 

during the gap period may no longer represent an affordable 

housing need due to a variety of reasons including death, 

changes in income, increase or decrease in household size, 

retirement and/or relocation outside of New Jersey." However, 

he also stated that housing need from the gap period would be 

"partially included" by those living in "over[]crowded or 

deficient housing units that are encompassed in the new 

calculation of [p]resent [n]eed." Therefore, the scope of 

present need should be dictated by identifiable housing need 

characteristics as found by the reviewing Mount Laurel judge 

when examining the evidence presented.14 In this context, the 

focus remains – as it has for the last forty years - on the 

constitutional obligation of realistically affording 

 

14 The Municipal Group asserted in its amicus brief that 

"municipalities presented facts to show that developers 

constructed roughly 90,000 rental units affordable to low[-] or 

moderate-income households during the gap period."
52 A-3323-15T1

opportunities for construction of a municipality's fair share of 

present and prospective need for low- and moderate-income 

housing.

We reach our conclusion emphasizing: (1) the core of the 

Mount Laurel doctrine is a municipality "would satisfy [its]

constitutional obligation by affirmatively affording a realistic 

opportunity for the construction of its fair share of the 

present and prospective regional need for low[-] and moderate[-

income] income housing," Mount Laurel II, supra, 92 N.J. at 205

(emphasis added); (2) a realistic opportunity depends on 

"whether there is in fact a likelihood -- to the extent economic 

conditions allow -- that the lower income housing will actually 

be constructed," id. at 222; (3) the FHA codified the core 

constitutional holding undergirding the Mount Laurel obligation, 

In re N.J.A.C. 5:96 I, supra, 215 N.J. at 584, and specifically 

defined "prospective need" as a forward projection of housing 

needs "based on development and growth . . . [which is]

reasonably likely to occur in a region or a municipality,"

N.J.A.C. 5:92-1.3; (4) the FHA charged COAH with determining 

"State and regional present and prospective need for low[-] and 

moderate[-income] housing," In re N.J.A.C. 5:96 I, supra, 215 

N.J. at 589 (emphasis added); (5) although the Legislature 

amended the FHA twelve times during the gap period, it did not 
53 A-3323-15T1

impose a retrospective "separate and discrete" gap-period 

obligation; (6) although the Appellate Division and the Supreme 

Court likewise had opportunities during the gap period to 

require a "separate and discrete" gap-period obligation, such an 

obligation was not imposed, and instead remained steadfast to 

the FHA's focus on State and regional present and prospective

need for low- and moderate-income housing; (7) identified lowand moderate-income households formed during the gap period in 

need of affordable housing can be captured in a municipality's

calculation of present need; and (8) under our tripartite system 

of jurisprudence, imposing a "separate and discrete" gap-period 

obligation is best left for consideration by the Legislative and 

Executive branches of government where the issues can be fairly 

and fully debated in the public forum. 

Reversed and remanded for further proceedings consistent 

with this opinion. We do not retain jurisdiction.