Today, a divided Supreme Court of New Jersey invalidated the affordable housing rules adopted by the Council on Affordable Housing (“COAH”) in the case entitled In re Adoption of N.J.A.C. 5:94 and 5:95. The matter came before the Court by petition of COAH for review of the October 8, 2010 decision of the Appellate Division of the New Jersey Superior Court, rejecting a significant portion of COAH’s revised affordable housing regulations (the “third round rules”) as being inconsistent with the Fair Housing Act (“FHA”), L. 1985, C. 222. The Appellate Division required remand of the third round rules to COAH for redrafting within five months.

The COAH third round rules were designed to establish the responsibilities of municipalities to provide affordable housing during the period from 1999 to 2018. The third round rules adopted a number of significant changes in the methodologies that had been used during the first and second round rules. In particular, COAH proposed a “Growth Share” methodology for assessing prospective need in allocating a municipality’s fair share of the region’s need for affordable housing. The Appellate Division invalidated COAH’s Growth Share methodology. The Supreme Court reviewed the Appellate Division’s decision and the majority held that the third round rules are at odds with the FHA and S. Burlington Cnty. NAACP v. Twp. of Mount Laurel, 92 N.J. 158 (1983) (“Mount Laurel II”).