A group of New Jersey mayors and local officials are suing the Garden State to invalidate a new affordable housing law that seeks to spur the development of tens of thousands of low priced units.
The lawsuit, filed Monday in Mercer County Superior Court, comes just weeks before the state is set to start rolling out the affordable housing requirements that New Jersey municipalities will be expected to develop over the next ten years.
Montvale Mayor Mike Ghassali is leading the opposition effort to thwart the new measure, which was signed into law by Gov. Phil Murphy earlier this year.
Ghassali, a Republican, has threatened legal action over the new affordable housing law for months, arguing that the current mandates prevent towns from planning for “smart growth” and forces suburban towns to develop more housing compared to urban localities.
The lawsuit, backed by eight other municipalities, has the potential to throw a wrench into the state’s ambitious plan to facilitate the development of tens of thousands of affordable housing units across New Jersey.
Dubbed “Local Leaders for Responsible Planning,” the coalition of municipal leaders argued in their complaint that the state’s new affordable housing law violates New Jersey’s constitution because it exceeds a decades-old directive that sets minimum affordable housing requirements for localities.
Ghassali said the current law “prevents local leaders from leading,” adding that he is “fully confident” that they have a good case.
The governor’s office declined to comment on the pending litigation.
The lawsuit challenging the state’s new affordable housing law falls far short of the 100 municipalities Ghassali previously said were willing to sign on to a legal challenge.
However, housing advocates and elected officials who support the state’s approach to spurring affordable housing development say that the lawsuit is frivolous.
State Sen. Troy Singleton, chairman of the Senate Community and Urban Affairs Committee and author of the affordable housing bill signed into law in the spring, called the opposition from “affluent” suburban towns “nothing new – same story, different day.”
“What is incredibly offensive, beyond using taxpayer dollars to fund this politically-driven, superfluous lawsuit, is the attempt to use the legal process to intentionally delay our affordable housing laws – not by weeks or months, but years,” Singleton said.
Assemblywoman Yvonne Lopez, a Democrat from Perth Amboy, who coauthored the new affordable housing law, noted that input from local officials was taken into consideration by lawmakers when crafting the legislation.
“We worked with mayors to ensure the law is workable and will give responsible local elected officials the tools they need to accomplish this goal,” she said.
In New Jersey, a unique, decades-old mandate known as the Mount Laurel Doctrine, requires most New Jersey towns to contribute their “fair share” of affordable housing development. Going back more than 40 years, the Mount Laurel Doctrine has generated more than 50,000 affordable units across the state.
Starting next year, there will be a new push to build more low- and middle-income housing as New Jersey – like many states – faces an affordable housing crisis.
Michael L. Collins, whose law firm is representing Ghassali and the opposition, said Monday that the new law is at odds with the requirements of the Mount Laurel directive.
“The lawsuit contends that the new law imposes obligations that are inconsistent with what was ever intended or mandated by our courts under the Mount Laurel doctrine,” Collins said. “The law imposes affordable housing obligations for the fourth round. And now every 10 years thereafter into perpetuity.”
Housing experts estimate that New Jersey needs more than 200,000 affordable apartments for low-income people who are the most severely cost-burdened, oftentimes spending more than 50% of their income on rent.
In March, Murphy signed a landmark bill overhauling the affordable housing system. The measure aimed to streamline the process by formally dissolving the defunct Council of Affordable Housing, the agency previously tasked with enforcing the rules and moving the responsibilities to another agency.
Under the new law, the development of affordable housing is under the purview of the Department of Community Affairs, which uses a formula — called the “Jacobson methodology” — to determine how many housing units each municipality must build.
The formula comes from a 2018 court decision by Superior Court Judge Mary Jacobson following a lawsuit brought by two Mercer County towns over their affordable housing obligations. To come up with the methodology for how much housing a town could develop, the judge looked at estimates for job and population growth, the number of households, wealth, and the amount of available land for development.
The lawsuit contends that the new law violates the state constitution’s separation of powers by codifying the transfer of the handling of dispute resolution previously held by the executive branch to the judiciary.
In October, the state is set to hand out the requirements to municipalities for how much affordable housing each is expected to develop over the next decade. After receiving their obligations, towns have to come up with an execution plan and get sign off from the state by next summer.
But municipalities seeking to challenge the requirements can still take the state to court to challenge the state-issued obligations.
In July, Ghassali told Gothamist that he had a verbal commitment from 100 towns to join his cause. But the lawsuit shows that just a fraction of that amount are willing to challenge the state.
“Unfortunately, some towns are standing by. Some mayors told me flat out if you win, we win. And I think that’s terrible leadership,” he said.
But more significantly, he said that he was seeking a $20,000 commitment from each town to fund the lawsuit, which he estimated would cost north of $2 million.
Ghassali said the group has enough of a financial commitment from the towns to move forward with its lawsuit.
“We believe we have enough funding right now to start the process. And that’s where we’re at,” he said.
He said the $2 million “war chest” he previously estimated was “aspirational.”
“That was my objective at first. But in talking to the attorneys and talking to the advisors, we have enough funding right now to move forward,” he said.
Fair Share Housing Center, a nonprofit organization tasked by the state with negotiating housing plans with towns, called the lawsuit purely a smokescreen by the towns involved to “block much needed affordable housing.”
Adam Gordon, director of Fair Share Housing Center, said he’s confident the lawsuit will eventually be thrown out by the courts.
“This is a lawsuit whose aim is very clear, which is to just stop these ultra wealthy, predominantly white towns from having to build affordable homes in their towns. And I think the courts will see through it and it’s unlikely to succeed,” he said.
Gordon told Gothamist that while not named as a defendant in the lawsuit, Fair Share Housing Center “plans to get involved.”