CRANFORD DID NOT SUBMIT AFFORDABLE HOUSING PLAN

DESPITE KNOWLEDGE OF RISK, TOWN DID NOT SUBMIT HOUSING PLAN

Friday, February 01, 2008
By LESLIE MURRAY and GREG MARX

CRANFORD -- Local officials discussed the township's potential vulnerability to a "builder's remedy" lawsuit years before such a suit was filed, but failed to develop a plan for affordable housing that would provide protection against a court claim, according to a review of public records.

On Jan. 16, Lehigh Acquisition Corp. filed a builder's remedy suit against Cranford in Superior Court seeking permission to proceed with an age-restricted multi-family complex on about five acres of vacant land the firm owns at 555 South Ave. East. In such a suit, a developer argues that a town has failed to meet its affordable housing obligation and typically asks the court for permission to construct a large housing development, with a minority of the units set aside as affordable units and the bulk priced at market rate.

The suits are one way in which New Jersey courts have forced municipalities to comply with the state Supreme Court's landmark 1975 Mount Laurel case, which requires all municipalities to provide housing for low- and moderate-income families and individuals.

Towns try to avoid the suits because, in addition to being costly to defend, they can force a municipality to allow a housing development it would otherwise have rejected. Towns can secure protection from builder's remedy suits by preparing their own plans to provide affordable housing and obtaining "substantive certification" for those plans from the state Council on Affordable Housing (COAH).

But, despite a number of false starts going back to the turn of this century, Cranford never obtained substantive certification -- and with it, protection from a builder's remedy suit. And a review of public records and interviews with past and current local officials appears to show a pattern of missed opportunities -- numerous situations, under several different Township Committees, in which Cranford had an opportunity to secure certification, but did not do so.

In the current case, both the township and the developer agree that the site is an appropriate location for a housing project; the dispute is about density. Lehigh wants to construct 126 age-restricted condominium flats, while the Township Committee will agree to only 90. (The township's redevelopment plan for the site, approved in 2006, actually calls for 80 units. That plan was drafted after extended consultation with the developer, but the two sides never reached a contractual agreement.)

In the suit, Lehigh contends that Cranford does not meet its affordable housing obligation and does not have a plan in place to provide low- and moderate-income residences in the future. The builder argues that under the second and third rounds of regulations promulgated by COAH, the township is required to provide 337 affordable units, and that its project would help satisfy that obligation. Lehigh's attorney, Tracy Siebold, did not return calls for comment this week.
In the first official response from Cranford, the Township Committee approved a resolution Tuesday authorizing Township Attorney Carl Woodward to defend the township and the Planning Board against the legal claim.

Ironically, the land in question was once identified by the township as an appropriate site for affordable housing. In a Fair Share Housing Plan from 1988, the township identified two tracts of privately-owned land large enough to sustain a housing development. The first, Dreyer Farm, is listed as being a horticultural use in the 100-year flood plain and thus "unsuitable for development." The second is 555 South Ave., which at the time was slated for commercial development. "Should this property become available in the future, it would be suitable for multi-family housing," reads the report, which is one of the documents municipalities must prepare to comply with COAH guidelines.

By 2000, though, when an updated Fair Share Housing Plan was prepared, Cranford officials came to a different conclusion. The second round of COAH guidelines created a requirement for 252 affordable units -- 104 rehabilitated and 148 new -- but because of Cranford's efforts to rehabilitate existing homes and the scarcity of vacant land, the township argued, its actual obligation to provide new units was zero. "Cranford Township does not have an affordable housing need based upon credits and municipal adjustments," the 2000 plan reads.

That plan was part of the township's June 2000 application to COAH for substantive certification. But Cranford's application was never granted, apparently because the township failed to provide information sought by COAH. In June 2003, a COAH official wrote the township's planner, Susan Gruel, requesting an updated inventory of vacant land. Gruel responded two weeks later, stating that the revised inventory was on hold pending changes in the state Green Acres program, which could affect the township's Recreation and Open Space Inventory.

Gruel promised another response once those changes were finalized, but there is apparently no further correspondence on the issue, and Township Clerk Tara Rowley said there are no minutes recording discussions of the issue by the Township Committee. With no further response, the township's petition for certification lapsed on Dec. 20, 2005, according to a COAH spokesman.

Affordable housing regulations are famously complex, and the township plans to mount a defense of Lehigh's lawsuit, but the fact that certification was never granted may be key in determining the outcome of the suit. In 2003, COAH issued a third round of affordable housing regulations, covering the period from 1999 to 2018. In a 2007 ruling that ordered amendments to the third round regulations, a state Appellate Court issued a stay to any builder's remedy suits affecting municipalities that had outstanding applications for substantive certification; the court also found that towns that acted in good faith to devise plans to comply with the third round rules should not be subjected to lawsuits. But because Cranford never obtained certification for the second round or sought it for the third round, it appears that protection would not apply to the township. (Revised third round rules have since been published and are the subject of ongoing public hearings; they are slated to go into effect in June 2008).

Though Cranford's application was allowed to expire, the issue eventually returned to the attention of the Township Committee. Minutes of official meetings detail four discussions of the issue in open session in 2005, though it is not clear whether local officials knew Cranford's petition was still active for most of that year.
At a Jan. 25, 2005, meeting, then-Commissioner Ann Darby argued that Cranford should pursue substantive certification to secure protection from a builder's remedy lawsuit. Mayor George Jorn, Deputy Mayor Dan Aschenbach and Commissioner George McDonough were all opposed, and Commissioner Scott Mease was undecided.

Cranford's position as a town without certification is not unique -- many communities have not gone through the process to demonstrate COAH compliance. Explaining his position this week, Aschenbach said, "I personally felt I did not want the state dictating where we should put affordable housing." His own opinion, he said, is that affordable housing is "nothing to be fearful of," but "township standards should matter."

Aschenbach added that seeking certification "is a costly, time-consuming, detailed administrative process that we had no justification for proceeding with until we understood the facts and options.Cranford did not have the administrative staff to spend on that effort."

He also defended the township's record of providing affordable housing through its senior centers and rehabilitation programs. "I would rather the township use its financial resources to expand affordable housing opportunities where they made sense rather than on the paperwork," Aschenbach said.

By June 2005, though, Mease had come around to Darby's position. And in September of that year, the township's new planner, Stan Slachetka, came before the committee to discuss the issue and estimated that Cranford had an obligation for 40 to 50 affordable units. At a subsequent conversation in October, the committee still was not prepared to apply for certification, but elected officials directed Township Administrator Marlena Schmid to secure a proposal from Slachetka's firm for a revised Master Plan that addressed the housing issue.

Working from that point, the committee decided in 2006 to handle COAH concerns through the Planning Board's Master Plan review, according to Aschenbach.
The year began with the Planning Board creating a subcommittee to address the Master Plan, including the affordable housing obligation. The general feeling was that "we better redo the Master Plan, and we better address COAH," said Lynda Feder, who chaired the Planning Board in 2006. She added, "It seemed to me that every member of the Township Committee, from both parties, acknowledged that we had to do this."
Still, Feder said, no progress was made in 2006 -- a failing she attributed to the fact that the Township Committee did not authorize funds for the project until late in the year. A Master Plan review requires the expertise of a professional planner, but the effort was not funded until an emergency appropriation of $84,000 was made in August. Soon thereafter, an election changed partisan control of the Township Committee, and it became clear that the leadership of the Planning Board would change as well. Given the circumstances, Feder said, it made sense to begin the work the following year.

The review did finally get underway in 2007, under the auspices of a Planning Board subcommittee that includes Robert Hoeffler, Kevin Illing and Darby, who had left the Township Committee after 2005. But at a meeting this week, the current members of the committee expressed frustration with the lack of progress on the latest effort.
"We've asked about updates we never heard anything," said David Robinson, the current deputy mayor. "We've got $36,000 left, and even critical elements are in embryonic stages."

Mayor Bob Puhak, too, said the committee "would like to see a stepped-up effort." While he did not identify the current effort as part of the legal defense, Puhak said that in light of Lehigh's claim, progress on the housing plan has become even more important.

And, he added, "This Township Committee clearly identified (the Master Plan review) as a priority before the lawsuit."

But one of the members of the Master Plan subcommittee -- and a long-time advocate for pursuing COAH certification -- said the current approach may not be suited to the circumstances.

Bundling the affordable housing issue with the Master Plan review was "in theory, a very appropriate way to address the housing question," said Darby. "However, in practice it was not a good strategy to address an element of urgency associated with the township's risk. A comprehensive Master Plan redo, if done correctly, is a lengthy and painstaking process. The timeline required is at odds with the notion of urgency and a quick turnaround."

Darby also explained why, during her time on the Township Committee, she had argued that action was required.

"The risks associated with not addressing the township's COAH obligations were always pretty clear," she said. "The township was allowing itself to be vulnerable to a builder's remedy lawsuit."

Leslie Murray is a staff writer for the Chronicle. She can be reached at (732) 396-4205 or lmurray@njnpublishing.com. Greg Marx is the editor of the Chronicle. He can be reached at (732) 396-4219 or gmarx@njnpublishing.com.