Court prevents COAH raid on trust funds without due process
Posted by Kevin Walsh on July 13th 2012
In an order issued at 5 p.m. today, the Appellate Division of the New Jersey Superior Court directed the Council on Affordable Housing (COAH) to provide a fair process prior to taking trust funds dedicated to creating homes for lower-income households.
“This decision means that the Christie Administration cannot seize any municipal trust funds without a full and fair hearing for every municipality before COAH,” FSHC Staff Attorney Adam Gordon said. “The Court rightly has brought to a halt the Christie Administration’s planned July 17 raid on municipal trust funds.”
The court found that a global injunction was not appropriate, while noting that it was “concerned” that
COAH may seize affordable housing trust funds without giving the affected municipalities adequate notice and an opportunity to contest the transfer.
The appellate court, therefore ordered
that before any transfer is effectuated, COAH must provide the affected municipality with written notice describing the exact amount of funds intended for transfer and how such amount was calculated.
The court also ensured that there would be a process for the review of which funds may be seized, writing that
The municipality shall have the right to contest before COAH the proposed transfer by demonstrating that the funds targeted for transfer have been “committed” to fund an affordable housing project by way of a legally enforceable agreement with a third party, or by such other means that show a firm and binding obligation to spend such funds in a manner consistent with the municipality’s affordable housing obligations.
The court, however, did not grant an immediate injunction that required COAH to stop taking all trust fund money until formal regulations were in place, as Fair Share Housing Center and the New Jersey State League of Municipalities had requested. Instead, it directed the parties to more fully brief that issue for resolution at a later date.
“While we believe the Court should have gone further and stopped any transfers of funds until clear standards are fully in place, the Court’s decision today is a good first step,” Gordon said. “We will continue to litigate the broader issue of the total failure of COAH to provide any clear standards that housing advocates, developers, and municipalities can rely upon, and hope to ultimately prevail on that point.”