NJ Judge Tosses Towns' Affordable Housing Lawsuit

TRENTON, NJ — A New Jersey judge has rejected a lawsuit by 28 towns seeking to overturn the state's newest law on affordable housing.

Superior Court Judge Robert Lougy on Tuesday dismissed the lawsuit led by the borough of Montvale with prejudice, according to the court order entered in the case.

Montvale and the other towns (see the full list below) had filed suit against the state in September 2024, claiming New Jersey's updated affordable housing law violated the state constitution's requirements under the Mount Laurel doctrine.

"The Legislature essentially claimed that it was obligated by the courts to impose the Law's terms, including new affordable housing mandates upon the Municipalities, allowing it to shirk political accountability for the same," the lawsuit claimed. It also said the responsiblity for interpreting and enforcing affordable housing belongs to the courts, not the legislature.

The lawsuit also contended the new law imposes housing obligations that go beyond what is constitutionally required, imposes an unconstitutional unfunded local mandate on municipalities," ... and "contains an unconstitutional structure including placing affordable housing determinations in the hands of unelected officials — including so-called 'experts.' "

The new law provides several options for towns to meet the affordable housing requirements set out by the state Department of Community Affairs, with credits, financing options and new bonuses, the Fair Share Housing Center, which advocates for affordable housing, said when the lawsuit was filed.

"Towns only lose their ability to be in control of the process when they refuse to find any place to create their fair share of affordable housing," the center said.

Montvale and the other towns claimed the new law's options to participate in the process were far from voluntary, because failure to participate could result in the loss of immunity to builders' remedy lawsuits. Those suits can result in developers having few constraints over what they build and where they build it in a town.

Lougy, in his order dismissing the towns' lawsuit, said "Their participation in the Program remains fundamentally voluntary. Plaintiffs contend that the risk of losing immunity from litigation renders participation a “Hobson’s choice” and not truly voluntary. However, the mere fact that participation in the Program confers a benefit on Plaintiffs – that is, immunity from exclusionary zoning litigation – does not render it involuntary."

"The Legislature is permitted to establish carrots and sticks regarding municipal compliance with their constitutional Mount Laurel obligations; such incentives and disincentives do not render the Program involuntary," Lougy wrote.

"It’s outrageous that a handful of wealthy towns are spending hundreds of thousands of dollars in taxpayer money trying to block the affordable homes New Jerseyans desperately need," said Josh Bauers, director of Exclusionary Zoning Litigation for Fair Share Housing Center, who argued the motion to dismiss. "Thankfully, Judge Lougy saw through their baseless claims — and the overwhelming majority of municipalities are already moving forward to create the homes our families, seniors, and people with disabilities urgently need."

More than 420 towns out of the more than 500 in New Jersey participated in the new affordable housing program, adopting Housing Element and Fair Share Plans in June. Those filings can be seen on the state courts' affordable housing site, which was created under the law. Many of those plans are anticipated to be approved by the end of 2025.

The Fair Share Housing Center said the participation is the highest since the start of the Mount Laurel doctrine in the 1970s.

The towns that were plaintiffs in the lawsuit are: Montvale, Denville, Florham Park, Hillsdale, Mannington, Millburn, Montville, Old Tappan, Totowa, Allendale, Westwood, Hanover, Wyckoff, Wharton, Mendham, Oradell, Closter, West Amwell, Washington Township, Norwood, Parsippany-Troy Hills, Franklin Lakes, Cedar Grove, East Hanover, Holmdel, Wall, and Warren.

Several are among the 16 towns whose Housing Element and Fair Share Plans were challenged by the Fair Share Housing Center in late August. The center has asked the courts to remove the towns' immunity to builders' remedy lawsuits as part of its challenges.

The 16 towns are: Belmar, East Greenwich Township, Florham Park, Franklin Lakes, Hanover Township, Lyndhurst, Madison, Montvale, North Arlington, Park Ridge, Rockaway, Roxbury, Saddle River, Summit City, Toms River, and West Windsor.