Opinion ID: 1901249
Heading Depth: 2
Heading Rank: 4

Heading: Round Valley v. Township of Clinton

Text: In this case, we apply the Mount Laurel doctrine, as modified by our decision today, to what is essentially a rural but nonetheless developing community (as that term has been previously understood) that is partially comprised of a growth area as determined by the SDGP. This case also requires the application of our new standard for granting a builder's remedy where the interests of the builder conflict with environmental concerns of the municipality, as well as a review of the trial court's appointment of a master in light of our rulings on that subject.
Plaintiff-developer, Round Valley, Inc., sought invalidation of the land use regulations of defendant Township of Clinton under the Mount Laurel doctrine (as well as on other grounds), along with a builder's remedy. Its Mount Laurel claim was typical, its proofs directed at a showing of facial invalidity, along with a showing of Clinton's actual fair share and the failure of its land use regulations to provide a realistic opportunity for construction of that fair share. The additional remedy sought was the development of a 790 acre, two parcel tract so as to permit construction of 3,500 units accommodating approximately 10,000 people. The trial court granted the developer the relief it sought, both invalidating the ordinance and granting a builder's remedy. The Appellate Division reversed that judgment in all respects, and we certified the matter. Clinton is a large municipality (about 22,000 acres) consisting in large part of farmland, public land, and residential uses. Though parts of it are more densely populated than most other portions of Hunterdon County, it is nevertheless appropriately characterized as rural (the total density being 244.3 people per square mile compared to the state's 983.3). Its zoning ordinances for many years effectively prohibited all multi-family housing. As a matter of fact, there were only five to six multi-family units in the entire municipality at the time of trial. Similarly, low cost housing of any kind has been practically non-existent, 95 percent of the housing being beyond the reach of 75 percent of New Jersey residents. Plaintiff's tract was originally divided by Route 31 into an easterly portion (known as the Gobel tract) of 469 acres and a westerly portion (known as Beaverbrook) of about 321 acres. The easterly portion is well suited to many different kinds of residential development, including high density multi-family. The Beaverbrook tract, on the other hand, is hilly and therefore topographically not as suitable for development. Plaintiff's proposed project would have placed most of the high density development on the Gobel tract. The project consisted of a planned unit development including a small commercial area, but devoted otherwise to construction of 3,500 new residential units: 90 percent of the units planned were townhouses and garden apartment units, with a minimum unit price of $29,900, and an average price range from $30,000 to $40,000, suitable at the lowest range for purchase by moderate income residents, or, with subsidization, by low income residents (market estimates in the region indicated that moderate income families could be accommodated in housing priced at $35,000 or below). If constructed, it would have added 10,000 people over a period of nine years to the population of Clinton, more than doubling its 1980 population of 7,345. Plaintiff first presented its project to Clinton authorities in 1973. It was legitimately delayed for many reasons, including the changing development of the municipality itself as well as the changing law. In terms of zoning, what plaintiff sought was a rezoning of the Gobel tract. The Beaverbrook tract allowed residential development at the rate of three units per acre: plaintiff was apparently satisfied with that in terms of its overall project. The Gobel tract, however, allowed no residential development at all but was zoned for research, office and light manufacturing purposes (ROM). Plaintiff sought an amendment that would have given it the right to erect a planned unit development (a PUD option). When the proposed revisions of the land use regulations (pursuant to the Municipal Land Use Law) had progressed to the point where it became apparent to plaintiff that the amendment would not be forthcoming, plaintiff brought this lawsuit, filing the original complaint on April 15, 1975. The ordinance was in fact amended in 1977, shortly before trial began, in accordance with the Township's plans; plaintiff's complaint was then amended to assert all of its claims against the new ordinance. Trial began on May 31, 1977, and ended October 12, 1977, with 29 days of hearings. The trial court found that since its alleged provision of multi-family housing was camouflage (if it allowed multi-family housing at all, it would have been much beyond the reach of lower income families), since it contained numerous excessive cost exactions, and since it was clearly over-zoned for commercial and industrial uses, the ordinance was facially invalid. Furthermore, it found that the Mount Laurel doctrine applied to Clinton as a developing municipality and accepted plaintiff's contention that Clinton's prospective fair share obligation was between 2,833 and 3,457 units. It found that the existing (1977) land use regulations did not provide for such fair share, ordered revisions to accomplish same, and invalidated numerous cost exaction provisions in the form of specific revisions to the ordinance, namely, the inclusion of a PUD option on the Gobel tract. As to all of this, the court provided for the appointment of a master, not only to help implement the judgment and the ordinance revisions, but apparently actually to determine, for the court, whether the revisions complied with the judgment in all respects.
The judgment invalidating the zoning ordinance and awarding a builder's remedy was stayed by the trial court pending appeal. The Appellate Division, in an opinion reported at 173 N.J. Super. 45 (1980), found that the trial court's judgment did not invalidate the entire ordinance but simply accorded a builder's remedy that was indistinguishable from a variance and reversed what it believed to be the only significant determination of the trial court, namely, the award of a builder's remedy. It concluded that there was nothing before it regarding the ordinance as a whole. Id. at 52. It also reversed the trial court's invalidation of specific portions of the zoning ordinance  the 120 percent performance bond, the two year maintenance bond, and the 50 acre minimum for a planned unit residential development. Id. at 53. It pointed out that the appointment of a master was premature in view of the fact that there had been no allowance for voluntary compliance by Clinton, apparently being of the opinion that until there had been some showing of intransigence on the part of the municipality, a master was inappropriate. Id. The court's decision to reverse on the builder's remedy was heavily influenced by the fact that after the trial court's decision, Round Valley had sold the Gobel tract to Exxon for ROM uses. As the Appellate Division viewed it, this sale renders most of the substantive issues presented on appeal moot. Id. at 51. We disagree with the Appellate Division's characterization of the trial court opinion. While there is some ambiguity at the end of the trial court's opinion and in its judgment, a reading of the entire record, the opinion and the judgment convinces us that the trial court intended to and did invalidate the entire Clinton land use regulations on Mount Laurel grounds. Furthermore, the trial court's articulate and persuasive opinion leaves no doubt as to the correctness of its determinations that Clinton is subject to Mount Laurel (under the developing doctrine that then applied) and that its land use regulations were both facially invalid and actually inadequate in meeting its demonstrated fair share. Furthermore, the court's appointment of a master was not only appropriate but most desirable under the circumstances, as was its award of a builder's remedy. That relief, however, must be modified in view of the sale of the Gobel tract, as must the court's delegation of certain powers to the master. The Appellate Division's interpretation of the trial court's decision as addressing itself solely to the appropriateness of a builder's remedy without invalidating the entire Clinton ordinance (or put differently, invalidating the ordinance only insofar as it applies to plaintiff's lands) was based upon certain portions of the trial court's opinion that were actually directed at indicating that the only portions of the ordinance immediately invalidated were those applicable to plaintiff's lands. The trial court did not want to strip Clinton completely of any land use regulations pending the enactment of new and complying ordinances. That is what the trial court was referring to when it stated that the ordinances were invalid only as to plaintiff's lands in the interim, meaning until the new ordinances could be prepared and adopted. There are innumerable indications in the trial court's opinion and judgment that all of the zoning ordinances of Clinton were to be revised to conform to the opinion, which itself clearly invalidated them on Mount Laurel grounds, and that the functions of the master were not simply to assure the provision of builder's remedy, but to implement the provisions of the opinion including those invalidating all of the ordinances. The Appellate Division incorrectly believed that plaintiff neither sought nor succeeded in having the township's land use ordinances declared unconstitutional generally. 173 N.J. Super. at 52. The fact is that in both its original and amended complaint, and in both the original and subsequent pretrial order, a declaration was sought that the land use regulations of Clinton were invalid under Mount Laurel. In the issues section of both pretrial orders the question is stated quite clearly. If indeed plaintiff had sought and the trial court had granted on Mount Laurel grounds a builder's remedy only, without invalidating the ordinance, we would agree with the Appellate Division that such action would be improper. Mount Laurel is not to be used as a substitute for a variance. That, however, is not at all the case here. Nor do we agree that the disposition of the Gobel tract after judgment in the trial court rendered most, or indeed any, of the issues moot. We are not sure whether the Appellate Division meant to rule in that fashion as a matter of law or whether it concluded that since plaintiff was satisfied at the trial level with the zoning in Beaverbrook and had now disposed of the only portion where it sought relief (namely, the Gobel tract), it no longer had any serious interest in the litigation. On the record before us, it is clear that plaintiff continues to seek a builder's remedy that must now be limited to the Beaverbrook tract. We do not believe that plaintiff's right to a builder's remedy in cases of this kind must depend upon standing absolutely still until the litigation is completed. A sale of a portion, even a large portion, of plaintiff/developer's land during the litigation does not necessarily mean that a remedy is no longer sought as to the remainder, and the mere fact that plaintiff continues to pursue the litigation indicates that indeed it is. Furthermore, a plaintiff in these actions, given the very broad rule we announce today on standing in Mount Laurel litigation, may continue to pursue an action simply to vindicate the Mount Laurel right without seeking a builder's remedy. [66] The only effect a disposition of a portion of a plaintiff's land should have is on the appropriateness and form of the builder's remedy. As we have noted elsewhere, a builder's remedy is no longer to be considered extraordinary. It is to be given where appropriate, in view of our perception that it is one of the most effective tools for implementing Mount Laurel. A builder who has endured intensive litigation and succeeded in vindicating the Mount Laurel right in the interest of the public should not be deprived of his remedy simply because, during the course of litigation, he sold some of his land and thereby was required to revise his plans. [67] It is true that such a disposition could well result in some further litigation, but if such further litigation were to be the basis for denying the builder his remedy, then the price of that remedy would consist not only of the enormous risks imposed by the litigation itself, but also of a freezing of all of the builder's land from any advantageous disposition during the pendency of litigation lest it be totally disqualified from any builder's remedy at all. Plaintiff's counsel has represented to this Court that plaintiff still seeks a builder's remedy; that given the fact that the Gobel tract has been disposed of, the zoning of Beaverbrook is no longer satisfactory to it; that it seeks permission to build at higher densities on Beaverbrook than now permitted; that it understands it must comply with environmental regulations and generally construct an environmentally acceptable development; and that it must provide a substantial portion of low and moderate income units in that development. We will treat these questions later, as we will the specific problems of the builder's remedy sought, but mention them now only as those factors bear on the Appellate Division's view of the matter. Even if a builder's remedy were inappropriate, for any reason, we would rule on the other issues before us as long as plaintiff demonstrated some legitimate interest in vindicating the Mount Laurel right. In view of the conclusions stated above, we now deal with those issues that the Appellate Division dismissed as moot, namely, the correctness of the trial court's findings concerning Clinton's Mount Laurel obligation and the propriety of the remedy granted, including the appointment of a master.

As we explained above, the developing characterization used by the trial court has been discarded as a remedial standard in favor of the growth characterization contained in the SDGP. Clinton Township, unlike the bulk of Hunterdon County, contains a substantial growth area, and is part of the SDGP's Clinton Corridor. The Current Development Character of this Corridor is defined as follows: This corridor extends westward from the Northeast Area along Interstate 78 to Clinton. The area includes older centers such as Somerville, Raritan and Clinton, but much of the land is either open or developed at very low densities. Many communities are within easy reach of northeastern New Jersey and New York employment centers by improved highways and interstates. [SDGP at 55]. In keeping with the planned growth policies of the SDGP, we hold that Clinton Township has the obligation to provide a realistic opportunity for the construction of its fair share of the region's lower income housing need. A determination of the extent of that fair share obligation shall be made by the trial court on remand, consistent with the principles and procedures outlined in this opinion. Our remand for a fair share determination does not reflect disagreement with the fair share findings below. On the contrary, those findings were well reasoned and solidly grounded in the evidence at trial. We remand on this issue for the sole purpose of allowing the trial court to determine whether our rulings concerning the SDGP have any impact on what would otherwise be an unassailable holding as to Clinton's fair share. The SDGP placed approximately 40 percent of the township in a growth area, the balance being limited growth and agriculture areas. On remand the trial court should determine whether the fair share can be accommodated completely in the growth area consistent with sensible planning. If it can, then the fair share determination below shall stand; if not, it shall be revised appropriately. The trial court need not be concerned with the general growth pressure that any development in a growth area may exert on the neighboring limited growth or agriculture area, since those pressures are implicit in and presumably acceptable to the State Plan. They are, obviously, inevitable. Such general pressures, however, are to be distinguished from the site specific pressure of locating a large-scale development in such a fashion in a growth area as to make it highly likely that growth will occur where it is intended not to, namely, in the limited growth area. These matters are best left to the municipality and planners in redesigning the zoning ordinance. In that connection, the revised ordinance should obviously be tailored to encourage lower income housing only in the growth area. Once the trial court has determined Clinton's fair share obligation, it must ensure that this obligation will be met, using the remedies and procedures set forth above. We will comment separately here on the builder's remedy and the master.
As previously explained, builder's remedies will no longer be rare and will be granted as a matter of course where (i) the plaintiff-developer will provide a substantial amount of lower income housing, and (ii) the proposed project accords with sound land use planning. Satisfaction of both of these preconditions may be difficult in this case. As noted above, the topography of the Beaverbrook tract (which plaintiff still owns) makes construction much more difficult than on the Gobel tract (which plaintiff sold), especially if costs are to be kept down so that construction of lower income housing is economically feasible. In fact, plaintiff had originally planned to construct its lower cost housing only on the Gobel tract and may be unable to construct it on Beaverbrook. If, on remand, the trial court finds that Round Valley in fact has no plans to build lower income housing on its remaining Beaverbrook tract, no builder's remedy should be granted. We emphasize that it will not be sufficient for plaintiff to show that its proposed development on Beaverbrook will supply least cost housing. Our prior observations that least cost housing cannot be used to satisfy the Mount Laurel obligation unless and until it is demonstrated that the numerous affirmative devices set forth above cannot produce actual lower income housing relates to the overall ordinance and its validity; it is only in that respect that least cost housing is an acceptable substitute for the Mount Laurel obligation. When it comes to a builder's remedy, however, there is no substitute for low and moderate income housing. If the builder wants his remedy, he must prove to the satisfaction of the trial court that lower income housing, not just least cost housing, will actually result from it. Obviously, this may require very high density construction, subsidies, mandatory set-asides, and other devices; but whatever is required, lower income housing must result. What a substantial portion is will be up to the trial court. We do not mean to indicate that the presence of a substantial amount of least cost housing will not be influential in persuading the trial court that the provision of a lesser amount of lower income housing will be satisfactory. One may influence the other. As for the suitability of plaintiff's tract, there was some evidence offered suggesting environmental problems in the construction of multi-family dwellings on this property. [68] Therefore on remand there shall be further inquiry by the trial court as to the environmental factors affecting Beaverbrook in view of whatever plaintiff's new plans may be, for those plans have not yet been formulated. When these plans have been completed and the trial court is satisfied that they will indeed provide a substantial portion of low and moderate income housing, the environmental issue shall then be determined, including, as the trial court did in its initial decision, requirements that the appropriate environmental agencies pass on the development. We emphasize again that the mere fact that there may be a better piece of land for this kind of development does not justify rejection of plaintiff's builder's remedy. It is only if the proposed development of Beaverbrook is contrary to sound planning principles, or represents a substantial environmental hazard, that it should be denied. If, on remand, plaintiff is awarded a builder's remedy, the trial court shall determine whether the scope of the proposed project would effect a radical transformation of Clinton and, if so, whether it should be phased-in at a rate slower than now planned by plaintiff.
The appointment of a master by the trial court was not premature, contrary to the Appellate Division's determination. As stated above, we believe that upon invalidation of an ordinance and the issuance of an order to rezone, trial courts may, in their discretion, freely appoint a master to aid in the implementation of their order, and need not await voluntary compliance on the part of the municipality, as suggested by the Appellate Division. We disapprove, however, of the apparent delegation of judicial power by the trial court to the master in this case. It must in the end be the judge and not the master who decides what actions will constitute compliance with our mandate. In this case it is quite clear, at least from the trial court's language, that the court intended simply to adopt the master's determination as to compliance. We therefore reverse the Appellate Division judgment and remand to the trial court for proceedings consistent with this opinion.