Opinion ID: 2365726
Heading Depth: 1
Heading Rank: 6

Heading: Incapacity of the 1973 Ordinance to Effect Adequate Lower Income Housing

Text: As we shall indicate hereinafter, Madison's planners have, for purposes of this litigation, formulated a study purporting to demonstrate an unmet need in Madison for low and moderate income housing, as its share of a larger Middlesex County regional need therefor, of some 1800 housing units as of 1975. [23] Assuming, for present purposes, the legitimacy of that estimate  a matter for discussion in a later section of this opinion  the evidence is convincing that the 1973 zoning ordinance does not hold the promise of an opportunity to meet that need and at the same time satisfy the prospective continuing need in the foreseeable period following 1975. This, in effect, was the substance of Judge Furman's holding, quoted earlier herein. From his conclusions, [24] amply supported by the record, it appears that no new housing is feasible under the ordinance for persons in the bottom income third of the population (under $9,000); that at most 12% (3500/30,000) to 17% (3500/20,000) of all new housing units are attainable by persons earning $10,000 [25] a year; so that 83% to 88% of the feasible future units would be zoned out of the reach of the lowest 40% of the population. The anatomy of these failures is apparent. In our analysis of the minimum lot single-family and multi-family zones in IVB, supra, the prima facie disproportion of land zoned for high cost residences vis-a-vis that zoned for lower cost residences and multi-family units was fully canvassed. According to the proofs here adduced, there is little or no present market for the R-80 and R-40 zoning as such. Cf. Schere v. Township of Freehold, 119 N.J. Super. 433 (App. Div.), certif. den. 62 N.J. 69, cert. den. 410 U.S. 931, 93 S.Ct. 1374, 35 L.Ed. 2d 593 (1972). While the R-7 zone may permit a marginal amount of moderate income housing, new home ownership in that zone is precluded for the low income population. While the latter condition may be economically unavoidable (see V, supra ), Madison has provided for no home ownership at all on very small lots, as mandated by Mount Laurel. 67 N.J. at 187. Clearly no effort was made to permit least cost single family homes  and certainly not in reasonable numbers. We have further seen that the multi-family zoning regulations are not only substantially deficient in areas of developable vacant land made available therefor, but also defective in their susceptibility to entrepreneurial concentration in one-and two-bedroom configurations. Mount Laurel requires that a municipality must allow for an appropriate variety and choice of housing. 67 N.J. at 174. This obligation extends to all types of housing and includes moderate and large sized multi-family units. In Mount Laurel, bedroom limitations were considered so clearly contrary to the general welfare as not to require further discussion. 67 N.J. at 183. Although the express bedroom restrictions of the 1970 Madison ordinance were excised in 1973, the maximum bulk and density regulations in the AF and PUD zones (the sole sites of multi-family units), [26] when combined with the economics of building, effectively dictate devolopment on an 80% one bedroom, 20% two bedroom mix, and such a combination was within the contemplation of the township planners. This is not an inevitable result of zoning and economics, for a municipality through the zoning power can and should affirmatively act to encourage a reasonable supply of multi-bedroom units affordable by at least some of the lower income population. Such action should include a combination of bulk and density restrictions, utilization of density bonuses, [27] minimum bedroom provisions and expansion of the FAR ratio in the AF zone to encourage and permit larger units. Although the validity of a zoning provision for density bonuses in the sense stated in note 27, supra (as distinguished from unit bonuses for rental concessions  i.e., rent skewing), has not been argued in this case, we see no objection to it in principle. Comparable bonuses are expressly permitted by the statute in relation to PUDs and clustering. N.J.S.A. 40:55-57(b)(2) and (3). While there is no express statutory sanction for a density bonus provision outside the PUD context, this type of regulation is directly tied to the physical use of the property and is thus within the recognized ambit of the zoning power. There was unanimity of opinion among the experts at the trial herein that such a device is a vital weapon in the armament of affirmative zoning for adequate housing of families in all income categories. Recognizing that the objectives of Mount Laurel are essential to the effectuation of the general welfare, and are within the broad legislative delegation to municipalities of both the zoning and the general police power, see Ward v. Scott, 11 N.J. 117 (1953); 16 N.J. 16 (1954), and Inganamort et al. v. Bor. of Fort Lee, et al., 62 N.J. 521 (1973), we hold that provision for density bonuses in the sense indicated is within the municipal zoning power, and, in situations such as that here presented, is a necessary implement in the encouragement of builders to provide multi-family housing for those of lower income. Cf. Mount Laurel, 67 N.J. at 170, n. 8. We are constrained to take a more reserved position as to the validity of zoning provisions for rent skewing, or the allowance of greater density in either sale or rental accommodations in exchange for special concessions by the developer of rental or sale price of a limited number of units. Although this is also a widely recommended zoning technique for handling the problem of encouraging private construction of lower income housing, [28] we discern serious problems with the exercise of local zoning power in such a manner without express legislative authorization. See Board of Supervisors v. De Groff Enterprises Inc., 214 Va. 235, 198 S.E. 2d 600 (Sup. Ct. 1973); Annot. 62 A.L.R. 3d 880 (1975). We will not here resolve the issue in the absence of adequate argument on the matter. However, we are not to be understood as discouraging local initiative in this area; the question, moreover, deserves legislative study and attention. It seems useful to point out, in connection with the revision of the ordinance which will be required by our judgment herein, that sound planning calls for providing for a reasonable cushion over the number of contemplated least cost units deemed necessary and believed theoretically possible under a particular revision. Plaintiff adduced testimony that a reasonable margin over any formulaic quota was necessary in order to produce any likelihood of achievement of the quota. The reasons are evident. Many owners of land zoned for least cost housing may not choose to use it for that purpose. And developers of least cost housing may not select all of the zoned land available therefor, or at least not within the anticipated period of need. Thus overzoning for the category desired tends to solve the problem. [29] The PUD provisions do not contribute to the desideratum of Mount Laurel. The provisions were analyzed in IVB, supra. We assume, for present purposes, that PUD zoning is valid. It has not been attacked in this case, and the relevant legislation, N.J.S.A. 40:55-54 et seq.; L. 1975, c. 291, Secs. 2 k, 29.1 b, as in the case of all legislation, is presumptively valid. Cf. Mount Laurel, 67 N.J. at 166-167, n. 5. In any event, it is a corollary of Mount Laurel that when municipal exactions from developers reach such proportions as to exert an exclusionary influence, whether in a PUD or any other context, they offend the constitutional precept of Mount Laurel and must be remedied. As pointed out by Heyman and Gilhool in their penetrating study of the rationale for upholding subdivision requirements: But such exactions raise the spectre of exclusion: arguably they will add so to the cost of suburban housing as to exclude an even larger portion of lower income and nonwhite population than is presently relegated to life in the central cities by the higher suburban costs. The Constitutionality of Imposing Community Costs of New Suburban Residents Through Subdivision Exactions, 73 Yale L.J. 1119, 1155 (1964). The authors conclude, however, that the exclusionary impact of such exactions will be strikingly slight because legislative and judicial pressures will tend to require the establishment of reasonable ceilings. Ibid. Cf. Berger, Land Ownership and Use 786, 787 (2d ed. 1975). Heyman and Gilhool found subdivision exactions ranging from $37.50 to $325 per lot to be reasonable. Id. at 1156. In contrast, a $2.2 million expenditure for schools in a Class II 300 acre PUD with a maximum capacity of 1,725 units yields a per unit exaction of $1275 [30] which does not seem to be reasonable even at the high price levels of 1974. [31] This requirement must be omitted in the revision of the ordinance. The requirement for the provision by the PUD developer of roads, water and sewage facilities presents a different situation. Such statutorily authorized municipal requirements for approval of subdivision plats have generally been held to be valid exercises of the police power. Brazer v. Borough of Mountainside, 55 N.J. 456 (1970). Nevertheless, as already noted, application of the police power through zoning cannot be had in a manner contrary to the general welfare. Mount Laurel, 67 N.J. at 175. Other limitations on this statutory power have previously been recognized. Cf. Divan Builders v. Planning Bd. Tp. of Wayne, 66 N.J. 582 (1975). There this court considered a prerequisite to subdivision approval that the developer contribute toward the cost of an off-site drainage facility without allocating any part of the cost to other properties specially benefitted by the improvement, and found it invalid. Similarly, in Longridge Builders, Inc. v. Planning Bd. of Princeton Tp., 52 N.J. 348 (1968), the court condemned a condition to subdivision approval that plaintiff pave an off-site right of way, resulting in the imposition of the entire cost upon plaintiff, when other lands would benefit from the improved road and there were inadequate standards and procedures for the allocation of costs. In this light, the $300,000 and $600,000 costs involved in bringing roads and utilities to the removed PUD sites (a distance of up to two miles, compared to the 361-foot distance of the improvement involved in Longridge, supra ) bear examination. To the extent that these costs do not prohibit development, they nonetheless add sufficiently to final costs as to tend to have an exclusionary impact. Further considerations highlight the questionable validity of these requirements. Only a limited area has been denoted PUD (9% of the township's vacant developable residential acreage), and 2/3 of it is in remote areas. This is not a case of a substantial category of land being reasonably zoned as a whole, with only a minor portion excessively burdened. Quite the opposite. The municipality could well have located these PUDS in more accessible areas of the town had it been motivated to render housing for lower income families more available. However, the record clearly shows that the sites were deliberately chosen in order to force the PUD developers and their customers to carry the burden of developing these remote areas. The township planner testified that the decision was made that two PUDs would be the incentive to complete and bring around the water system    to provide a main system that would rationally serve 1/3 of the township. This kind of motivation is echoed in the minutes of the planning board and township council where it was noted that because of the locations chosen the developers would be required to build portions of the trans-Madison highway as well as to widen and improve Union Hill Road. Such expenditures by PUD developers would directly benefit the owners of other property advantaged by the added facilities and paved roads yet not required to contribute a proportionate amount of the cost. The potential impact of the water and sewer line requirements is shown by the conclusion of the Middlesex County Planning Board, in reviewing the PUD ordinance, that the two remote PUD areas would probably not be developed at all within the next ten years. Under the totality of the stated circumstances, it must be concluded that a prima facie case of exclusion has been made out with respect to the road and facility requirements, and the burden shifts to the municipality to justify those provisions of the ordinance. Cf. Mount Laurel, supra, 67 N.J. at 181. As the municipality has not met its burden, the municipality will be directed on remand to do one or more of the following in the course of revision of the ordinance (if it continues in its position that the PUD provisions partly meet its obligation to zone for least cost housing): (1) eliminate these requirements or revise them to render them not exclusionary; (2) require proportionate donation by other property holders; or (3) relocate these or other PUD tracts nearer to utility hookups. A third potentially cost-generating requirement in the PUD provisions is the approval process, which allegedly results in high carrying charges and has the potential for delay effectively barring the project. The approval process is a three-stage procedure, which, according to the township's witness, may be completed within a year, but which plaintiffs' experts testify would take eighteen months to two years. Admittedly, a protracted approval process will add greatly to the cost of any project and hence may tend to render development prohibitive to lower income users. The evidence as to the cost impact of the Madison PUD provisions was contradictory. As noted, they were adopted pursuant to the PUD enabling legislation, N.J.S.A. 40:55-54 to 67. The statute undertakes to replace existing multifarious procedures with an expeditious method of processing a plan for a planned unit development    to avoid the delay and uncertainty inherent in the other procedures. N.J.S.A. 40:55-59. It then proceeds to lay out a two-stage approval process which the Madison ordinance follows with one exception. The ordinance adds a third informal preliminary application stage which must be completed prior to the filing of an application for tentative approval. This informal stage adds approximately 40 days. Without it, the entire process on its face takes 150 days. [32] Consequently the township's testimony that the procedure may be completed within nine months is supportable on the record. Except for the informal preliminary application stage, the procedure is valid. The latter, being unduly cost-generating, and not contemplated by the statute, should be eliminated. We need add no more to the discussion above in IV B of the inadequacy for fair share purposes of the cluster provisions of the ordinance. In summation of this point, the 1973 Ordinance is shown not to provide the opportunity for a substantial amount of new housing which could be available to the lower income segments of the population. This failure arises from both (a) the inadequacy or non-existence of areas zoned for homes on very small lots or for multi-family housing; and (b) the undue cost-generating features inherent in the ordinance which raise the expense of purchasing or renting new housing units above the reach of the great majority of the lower income population.