Opinion ID: 1901249
Heading Depth: 3
Heading Rank: 2

Heading: Using Affirmative Measures

Text: Despite the emphasis in Mount Laurel I on the affirmative nature of the fair share obligation, 67 N.J. at 174, the obligation has been sometimes construed (after Madison ) as requiring in effect no more than a theoretical, rather than realistic, opportunity. As noted later, the alleged realistic opportunity for lower income housing in Mount Laurel II is provided through three zones owned entirely by three individuals. There is absolutely no assurance that there is anything realistic in this opportunity: the individuals may, for many different reasons, simply not desire to build lower income housing. They may not want to build any housing at all, they may want to use the land for industry, for business, or just leave it vacant. It was never intended in Mount Laurel I that this awesome constitutional obligation, designed to give the poor a fair chance for housing, be satisfied by meaningless amendments to zoning or other ordinances. Affirmative, in the Mount Laurel rule, suggests that the municipality is going to do something, and realistic opportunity suggests that what it is going to do will make it realistically possible for lower income housing to be built. Satisfaction of the Mount Laurel doctrine cannot depend on the inclination of developers to help the poor. It has to depend on affirmative inducements to make the opportunity real. It is equally unrealistic, even where the land is owned by a developer eager to build, simply to rezone that land to permit the construction of lower income housing if the construction of other housing is permitted on the same land and the latter is more profitable than lower income housing. One of the new zones in Mount Laurel provides a good example. The developer there intends to build housing out of the reach of the lower income group. After creation of the new zone, he still is allowed to build such housing but now has the opportunity to build lower income housing to the extent of 10 percent of the units. There is absolutely no reason why he should take advantage of this opportunity if, as seems apparent, his present housing plans will result in a higher profit. There is simply no inducement, no reason, nothing affirmative, that makes this opportunity realistic. For an opportunity to be realistic it must be one that is at least sensible for someone to use. Therefore, unless removal of restrictive barriers will, without more, afford a realistic opportunity for the construction of the municipality's fair share of the region's lower income housing need, affirmative measures will be required. [26] There are two basic types of affirmative measures that a municipality can use to make the opportunity for lower income housing realistic: (1) encouraging or requiring the use of available state or federal housing subsidies, and (2) providing incentives for or requiring private developers to set aside a portion of their developments for lower income housing. Which, if either, of these devices will be necessary in any particular municipality to assure compliance with the constitutional mandate will be initially up to the municipality itself. Where necessary, the trial court overseeing compliance may require their use. We note again that least-cost housing will not ordinarily satisfy a municipality's fair share obligation to provide low and moderate income housing unless and until it has attempted the inclusionary devices outlined below or otherwise has proven the futility of the attempt.
Because the kinds of lower income housing subsidies available are subject to change  and have in fact changed often  it is more important to establish the municipality's general Mount Laurel obligation concerning subsidies than its required role as to any particular existing subsidy. The importance of defining that obligation may depend at any particular time on the then extent and impact of available subsidies; if anything, the quantity of housing subsidies varies even more than the kind. For example, the amount of lower income housing subsidies now available is substantially less than several years ago, and there is no indication that subsidies for lower income housing construction are likely to increase in the near future. They are, nevertheless, apparently a permanent part of the housing scene; the long-term importance of defining the municipality's Mount Laurel obligation in relation to such subsidies is that the construction of lower income housing is practically impossible without some kind of governmental subsidy. While Mount Laurel I did not come to grips with this issue, its clear import was that the Court at that time expected Mount Laurel, in addition to adopting appropriate zoning ordinance amendments, to take whatever additional action encouraging the fulfillment of its fair share of the regional need for low and moderate income housing [as might be] necessary and advisable. 67 N.J. at 192. The Court noted that Mount Laurel  at the least  had a moral obligation to provide lower income housing through a local housing agency. Simply facilitating subsidies granted by other levels of government is municipal action of a significantly lesser dimension, well within that contemplated by this Court when it noted that [s]hould Mount Laurel not perform as we expect, further judicial action may be sought. Id. at 192. The Court had previously recognized the necessity for such subsidies and optimistically stated its expectation that housing would become a reality through private or public enterprises, or both. Id. at 188 n. 21. Whatever the Court may have meant then, Madison made it clear that not only was public housing a moral obligation at most (rather than at least), but that some devices  which may in fact be absolutely essential if federal or state subsidies are to be forthcoming  must be summarily rejected, referring to tax concessions, among other devices. Oakwood v. Madison, 72 N.J. at 546. We were not, however, directly faced in Madison with the extent of a municipality's obligation, if any, to facilitate lower income housing subsidies available from other levels of government. The implication of the observation that lower income housing cannot be built without subsidies is that if the Mount Laurel principle requires municipalities to provide a realistic opportunity for such housing through their land use regulations but leaves them free to prevent subsidies through non-action, that obligation is a charade. Mount Laurel was never intended to produce the perfect model of a just zoning ordinance; it was intended to provide a realistic opportunity for the construction of lower income housing. We do not suggest that a municipality would be required to create a housing authority to meet its Mount Laurel obligation. We do, however, expect municipal officials in appropriate cases to do more than pass land use regulations conforming to Mount Laurel I. Where appropriate, municipalities should provide a realistic opportunity for housing through other municipal action inextricably related to land use regulations. On occasion, what is needed to obtain a subsidy may be as simple as a resolution of need stating that there is a need for moderate income housing in the municipality. N.J.S.A. 55:14J-6(b). In addition to the resolution of need, the most important federal program for providing lower income housing subsidies (the section 8 low and moderate income housing program; 42 U.S.C. § 1437f (1982 Supp.)) requires in New Jersey, as a practical matter, that the municipality grant tax abatements to developers. See N.J.S.A. 55:14J-8(f). [27] In evaluating the obligation that the municipality might be required to undertake to make a federal or state subsidy available to a lower income `housing developer, the fact that some financial detriment may be incurred is not dispositive. Satisfaction of the Mount Laurel obligation imposes many financial obligations on municipalities, some of which are potentially substantial. By contrast, a tax abatement for a low or moderate income housing project will have only a minimal effect on the public fisc. Thus viewed, the asserted fiscal reasons justifying the failure to provide a tax abatement may be nothing more than a red herring. The direct and immediate financial impact of a tax abatement agreement between the municipality and the developer may be unimportant when compared with increases in municipal and school district costs caused by the advent of lower income housing. The trial court in a Mount Laurel case, therefore, shall have the power to require a municipality to cooperate in good faith with a developer's attempt to obtain a subsidy and to require that a tax abatement be granted for that purpose pursuant to applicable New Jersey statutes where that abatement does not conflict with other municipal interests of greater importance.
There are several inclusionary zoning techniques that municipalities must use if they cannot otherwise assure the construction of their fair share of lower income housing. Although we will discuss some of them here, we in no way intend our list to be exhaustive; municipalities and trial courts are encouraged to create other devices and methods for meeting fair share obligations. [28] The most commonly used inclusionary zoning techniques are incentive zoning and mandatory set-asides. The former involves offering economic incentives to a developer through the relaxation of various restrictions of an ordinance (typically density limits) in exchange for the construction of certain amounts of low and moderate income units. The latter, a mandatory set-aside, is basically a requirement that developers include a minimum amount of lower income housing in their projects.
Incentive zoning is usually accomplished either through a sliding scale density bonus that increases the permitted density as the amount of lower income housing provided is increased, or through a set bonus for participation in a lower income housing program. See Fox & Davis, 3 Hastings Const. L.Q. 1015, 1060-62 (1977). Incentive zoning leaves a developer free to build only upper income housing if it so chooses. Fox and Davis, in their survey of municipalities using inclusionary devices, found that while developers sometimes profited through density bonuses, they were usually reluctant to cooperate with incentive zoning programs; and that therefore those municipalities that relied exclusively on such programs were not very successful in actually providing lower income housing. Id. at 1067. [29] Sole reliance on incentive techniques (or, indeed, reliance exclusively on any one affirmative device) may prove in a particular case to be insufficient to achieve compliance with the constitutional mandate.