                 NOT FOR PUBLICATION WITHOUT THE
                APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-1535-12T2
                                               A-1537-12T2
                                               A-1538-12T2
                                               A-1731-12T2
                                               A-1732-12T2

FAIR SHARE HOUSING CENTER,
INC.,

      Plaintiff-Appellant,
                                       APPROVED FOR PUBLICATION
v.
                                            July 28, 2015
THE ZONING BOARD OF THE
                                         APPELLATE DIVISION
CITY OF HOBOKEN,

      Defendant-Respondent,

and

ADVANCE AT HOBOKEN, LLC,

      Defendant/Third-Party
      Plaintiff-Respondent,

v.

CITY OF HOBOKEN and THE
MAYOR AND COUNCIL OF THE
CITY OF HOBOKEN,

      Third-Party Defendants-
      Appellants.


FAIR SHARE HOUSING CENTER,
INC.,

      Plaintiff-Appellant,

v.
THE ZONING BOARD OF THE
CITY OF HOBOKEN,

      Defendant-Respondent,

and

1415 PARK AVENUE, LLC,

      Defendant/Third-Party
      Plaintiff-Respondent,

v.

CITY OF HOBOKEN and THE
MAYOR AND COUNCIL OF THE
CITY OF HOBOKEN,

      Third-Party Defendants-
      Appellants.



FAIR SHARE HOUSING CENTER,
INC.,

      Plaintiff-Appellant,

v.

THE ZONING BOARD OF THE
CITY OF HOBOKEN,

      Defendant-Respondent,

and

9TH MONROE, LLC,

      Defendant/Third-Party
      Plaintiff-Respondent,

v.

CITY OF HOBOKEN and THE



                                2   A-1535-12T2
MAYOR AND COUNCIL OF THE
CITY OF HOBOKEN,

     Third-Party Defendants-
     Appellants.



FAIR SHARE HOUSING CENTER,
INC.,

     Plaintiff-Appellant,

v.

THE ZONING BOARD OF THE
CITY OF HOBOKEN and
NEW JERSEY CASKET COMPANY, INC.,

     Defendants-Respondents.


         Argued December 3, 2014 - Decided July 28, 2015

         Before Judges Fuentes, Ashrafi and Kennedy.

         On appeal from the Superior Court of New
         Jersey, Law Division, Hudson County, Docket
         Nos. L-3643-11, L-5052-11, L-733-12, and L-
         1978-12.

         Kevin   D.  Walsh   argued   the  cause   for
         appellant Fair Share Housing Center.

         Ronald D. Cucchiaro argued the cause for
         appellants City of Hoboken and Mayor and
         Council of the City of Hoboken (Weiner
         Lesniak, LLP, attorneys; Mr. Cucchiaro and
         Richard Brigliadoro, on the brief).

         Jennifer Phillips Smith argued the cause for
         respondent Advance at Hoboken, LLC (Gibbons
         P.C., attorneys; Ms. Smith, on the brief).

         Kevin J. Coakley argued the cause         for
         respondents 1415 Park Avenue, LLC,        9th



                               3                           A-1535-12T2
              Monroe, LLC, and New Jersey Casket Company,
              Inc., (Connell Foley, LLP, attorneys; Mr.
              Coakley, of counsel; Meghan B. Burke and
              Genevieve L. Horvath, on the brief).

              Dennis M. Galvin argued the cause for
              respondent Zoning Board of the City of
              Hoboken (Galvin Law Firm, attorneys; Mr.
              Galvin, on the brief).

              The opinion of the court was delivered by

FUENTES, P.J.A.D.

      These are five consolidated appeals filed to determine the

enforceability of an affordable housing ordinance adopted by the

City of Hoboken.             Plaintiff Fair Share Housing Center (Fair

Share)    filed      three    of    the    appeals       against    four      developers:

Advance   at    Hoboken,      LLC    (Advance)       and    1415 Park         Avenue,   LLC

(1415 Park) (both respondents in A-1535-12); 9th Monroe, LLC

(9th Monroe) (A-1537-12); and New Jersey Casket Company, Inc.

(NJ Casket) (A-1538-12).              The City and the City's Mayor and

Council      (City    appellants)         filed    the     two    additional      appeals

against   Advance       and   1415    Park        (A-1731-12),       and      against   9th

Monroe (A-1732-12).

      Each of the four developers named as defendants in this

case received significant relief from the City's zoning laws in

the   form    of     variances      from    the    Zoning        Board   of    Adjustment

(Zoning Board), conditioned upon the developers' compliance with

the City's affordable housing ordinance.                     The trial court held




                                             4                                    A-1535-12T2
the ordinance was "null, void, and unenforceable" because it

violated      statewide      affordable         housing    policies.           The     court

invalidated the zoning approval conditions imposed by the Zoning

Board, relieved the developers from their obligation to comply

with    the    ordinance's     provisions,         and    enjoined       the   City    from

enforcing or imposing "any requirement against the parties to

construct affordable housing units and/or collect any monetary

contribution         related    to    the       affordable        housing      from     the

parties[.]"      Ultimately, the court dismissed with prejudice Fair

Share's complaints and denied its motion for reconsideration.

       Since    these    appeals     were   filed        and    argued,     our   Supreme

Court decided In re N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 6 (2015),

which    effectively         eliminated,         "until        further    order,"       the

requirement to exhaust administrative remedies under the Fair

Housing Act (FHA), N.J.S.A. 52:27D-301 to -329.4, and directed

trial      courts       to     resolve      municipalities'              constitutional

obligations under Mount Laurel.1                 Thus, to the extent the trial

court's decision here depended upon the Council on Affordable

Housing's (COAH) availability as an administrative forum or its

obligation      to    perform    the     responsibilities           imposed       by    the

1
  S. Burlington Cnty. N.A.A.C.P. v. Twp. of Mount Laurel (Mt.
Laurel II), 92 N.J. 158 (1983); S. Burlington Cnty. N.A.A.C.P.
v. Twp. of Mount Laurel (Mt. Laurel I), 67 N.J. 151, appeal
dismissed and cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L.
Ed. 2d 28 (1975).



                                            5                                     A-1535-12T2
Legislature through the FHA, those issues are now moot.

      Notwithstanding the current state of affairs with respect

to COAH,    we are compelled to address the issues raised by Fair

Share in order to dispel any doubt concerning the enforceability

of the City's affordable housing ordinance.                  We now reverse the

trial court's order invalidating the City's affordable housing

ordinance decision.          Consequently, we hold the trial court erred

in    invalidating     the     zoning    approval      conditions         related     to

compliance with the ordinance's provisions as to all of the

developers named as defendants by Fair Share and remand for the

trial court to adjudicate the remaining legal issues raised by

the parties.

      The   trial     court   misconstrued       the   FHA   and     the      case   law

applying it.        There is no provision in the FHA or regulations

promulgated    by     COAH    requiring       municipalities        to    submit     all

ordinances     that    impact     a     municipality's       affordable        housing

obligation     to      COAH      for     approval.            The        "substantive

certification" provided by COAH to those municipalities seeking

its    protection      from     builder's      remedy    suits2          is   entirely


2
  As Judge Cuff explained in In re Adoption of N.J.A.C. 5:94 &
5:95, 390 N.J. Super. 1, 17 (App. Div.), certif. denied, 192
N.J. 71 (2007), a "builder's remedy" suit was a scheme devised
by the Court in Mt. Laurel II "for the consistent and hopefully
expeditious resolution of litigation." (Citation omitted).




                                          6                                    A-1535-12T2
voluntary.   N.J.S.A. 52:27D-313(a).      The Legislature enacted the

FHA and established COAH "to oversee the development of low and

moderate income housing throughout the state through a system of

voluntary participation by municipalities in the COAH process."

Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J. 502, 513 (2002)

(emphasis added).

      In the interest of clarity, we also expressly reverse the

trial court's decision invalidating the section in the ordinance

that provides for voluntary payments by developers in lieu of

compliance with the ordinance's affordable housing requirements.

The trial court conflated development fees under N.J.A.C. 5:97-

8.3, with the payments in lieu, created "as an option to the on-

site construction of affordable housing otherwise required by

ordinance," authorized by N.J.A.C. 5:97-8.4 and sanctioned by

N.J.S.A. 52:27D-329.3.

      Before we begin our analysis, we will briefly describe the

procedural trek these cases took before they ended up before us

in this consolidated appeal.

                                   I

      From July 7, 2011 to April 17, 2012, Fair Share filed four

individual   actions   in   lieu   of     prerogative    writs    seeking

declaratory and injunctive relief against the Zoning Board and

the   following   private   developers:    Advance,     1415   Park,   9th




                                   7                             A-1535-12T2
Monroe, and NJ Casket.            Fair Share sought compliance with the

City's affordable housing ordinance in the form of a judicial

declaration that any zoning approvals these developers received

be deemed void or enjoined, unless each one filed a "plan of

compliance" with the affordable housing ordinance.

    All four developers named as defendants by Fair Share filed

answers asserting a variety of affirmative defenses including

challenges    to   Fair    Share's       standing         to     raise    these    issues,

attacking the timeliness of the actions in lieu of prerogative

writs   pursuant   to     Rule 4:69-6,           and    challenging       the    validity,

enforceability, and constitutionality of the affordable housing

ordinance.

    Three     of   the     four    developers             also    filed    cross-claims

against the Zoning Board and third-party complaints against the

City and the Mayor and Council, asserting, inter alia, estoppel

based on the City's failure to enforce the affordable housing

ordinance    and   the    Zoning       Board's         failure    to    condition    prior

approvals upon compliance with the affordable housing ordinance.

Citing 42 U.S.C.A. § 1983 and the New Jersey Civil Rights Act,

N.J.S.A.    10:6-2,      the   developers          also    asserted       violations     of

their   constitutional         right    to       due    process,       private    property

rights, and inverse condemnation.                  They all sought counsel fees

under 42 U.S.C.A. § 1988 and N.J.S.A. 10:6-2(e).




                                             8                                    A-1535-12T2
       The Zoning Board and City appellants all responded to the

cross-claims and third-party actions.

                         Common Core of Operative Facts

       The record before us includes the minutes from three 1988

City    Council     meetings      regarding     the    adoption        of    the    City's

affordable housing ordinance.              Included as part of this record

are minutes from a special session of the City Council held on

May 4, 1988.       The subject for discussion at this special meeting

was denoted, "[t]o meet and discuss Hoboken's Affordable Housing

with    representatives       from     [COAH]."        In   attendance         were      the

City's Law Director, CDA3 Director, and Arthur Bernard on behalf

of COAH.      Two weeks later, at the meeting held on May 18, 1988,

the    City   Council      unanimously     adopted      the    affordable          housing

ordinance.      The Mayor signed the ordinance into law on May 19,

1988.

                                   The Ordinance

       The ordinance titled, "An Ordinance Requiring the Provision

of     Affordable     Housing      Units       and    Providing        for     Voluntary

Contributions       in    Lieu    of   Such     Housing       as   a    Part       of    New

Construction        and     Substantial         Rehabilitation          of      Existing

Buildings     in    the    City   of   Hoboken,"       contains        five    "Whereas"

clauses setting forth the factual basis and public policy goals

3
    "CDA" stands for "Community Development Agency."



                                           9                                       A-1535-12T2
driving its passage:

              WHEREAS,   the   City of  Hoboken  has
         determined that an emergency exists in the
         city   with   respect   to availability  of
         affordable housing for household[s] of low
         and moderate income; and

              WHEREAS, the New Jersey Council on
         Affordable Housing has found that the City
         of Hoboken has a responsibility to provide
         additional low and moderate income housing,
         and   whereas   such  obligation   has   been
         affirmed by the Supreme Court in [S.
         Burlington Cnty. N.A.A.C.P. v. Twp. of Mount
         Laurel], 92 N.J. 158 ("Mt. Laurel II"), and

              WHEREAS, the absence of federal housing
         subsidies renders it impossible for the City
         of Hoboken to provide affordable housing
         with available public resources commensurate
         with the need for such housing or the legal
         obligation of the City of Hoboken; and

              WHEREAS, the limited availability of
         vacant land in the City of Hoboken, coupled
         with the high cost of that land and the
         strength of the market demand for luxury
         housing, has resulted in a situation where
         the need for affordable housing cannot
         realistically be met through the efforts of
         private developers acting voluntarily to
         provide affordable housing through their own
         resources; and

              WHEREAS, the use of an inclusionary or
         mandatory set aside ordinance as a means of
         bringing about the production of affordable
         housing is not only urged in Mt. Laurel II
         and in the New Jersey Fair Housing Act,
         c.222, P.L. 1985, but has been demonstrated
         to be an effective means of producing
         affordable     housing    without     placing
         unreasonable burdens on private developers.




                              10                         A-1535-12T2
                 NOW, THEREFORE, BE IT ORDAINED by the
            Mayor and City Council of the City of
            Hoboken, New Jersey, as follows . . . .

     What "followed" is a comprehensive plan to encourage and

bring about the development of affordable housing in Hoboken.

In   a    case-specific            context,        the     ordinance        sets     "General

Standards"       for    the        construction          of     new   housing       and    the

rehabilitation         of   existing       stock,         with    mandatory        set-asides

based on the scope of the projects.                            It includes a provision

requiring affordable units in a particular development where it

is "especially suited for senior citizen housing by virtue of

physical character and location."                        It also provides developers

with the option of making a "voluntary cash contribution to the

Trust     Fund    created          by   this        Ordinance,         or    a     voluntary

contribution of land and improvements to the City of Hoboken in

lieu of constructing all or part of the affordable housing units

required by this Ordinance."                  The ordinance is codified under

Article XVII of the City Code, §§ 196-68 to -81.

     As    it    relates      to    this   case,         the    key   provisions      of   the

ordinance are:

            A.   All development of residential property
            in the City of Hoboken, taking place either
            through the construction of new structures
            on vacant land or through the substantial
            rehabilitation of existing structures except
            as herein provided below, shall include low
            and   moderate   income   housing   in   the
            proportions specified below and consistent



                                              11                                     A-1535-12T2
             with the standards and conditions of this
             Article.

                     . . . .

             C.   Each   development    subject to   this
             Article   shall    contain    the  following
             percentage of units to be provided for
             affordable housing.

                  (1) Where      all  affordable    units
             provided   pursuant   to this  Article   are
             located on site, ten percent (10%) of the
             total number of units.

                     . . . .

                  (4) Pursuant to § 196-73 below, the
             city may enter into an agreement with a
             developer to allow the developer to make a
             voluntary cash contribution in lieu of
             providing the affordable units required by
             this subsection.

             [Hoboken,      N.J.,      Code    § 196-69(A),        (C)
             (1988).]

       For    each     development     subject      to     the   ordinance,    the

developer     is     required   to   provide   a    plan    of   compliance   with

certain      described     features,    and    no    preliminary      site    plan

approval (or if none is needed, then no construction permit)

shall be granted unless and until the compliance plan has been

approved by the City's planning board.               § 196-69(D)(1)-(2).       Any

development plan that is artificially subdivided to evade the

ordinance's provisions shall be disapproved.                     § 196-69(D)(4)-

(5).      There are criteria for the board to permit affordable

housing units to be provided off site, § 196-71, or for the



                                        12                               A-1535-12T2
developer to make a payment in lieu of constructing affordable

housing, § 196-73.

    The payment in lieu provision includes the following:

         A.   Projects subject to the provisions of
         this Article may elect, with the approval of
         the   Board,  to   make  a   voluntary  cash
         contribution to the trust fund created by
         this Article or a voluntary contribution of
         land and improvements to the City of Hoboken
         in lieu of constructing all or part of the
         affordable housing units required by this
         Article.

         B.   The Board is authorized to approve a
         voluntary   cash   contribution   under   this
         section   only    upon    written    findings,
         supported by the record, that such a
         contribution   will    further  the    housing
         policies of the City of Hoboken more than
         the construction of affordable units at the
         time in question.    In making such findings,
         the Board shall consider and report on the
         following factors:

              (1) The number of units that can be
         built or low/moderate income households
         preserved with the cash contribution vs. the
         number of new units required to be built.

              (2) The availability and stage of
         readiness of affordable housing projects on
         which the trust funds can be expended.

              (3) The    reasons   which    make   the
         provision of actual units impractical.

         C.   The opportunity to make a voluntary
         cash contribution in lieu of providing
         affordable housing is not intended to be and
         should not be construed as a right available
         to developers at their sole option.      The
         policy of this Article favors provision of
         actual affordable units.



                              13                          A-1535-12T2
            [§ 196-73.]

This provision describes, in great detail, the calculations for

the amount of contribution permitted.               § 196-73(D).

      The    section       captioned,        "Construal      of     contribution

provisions," reads as follows:

                 The   provisions    of   this   Article
            regarding contributions in lieu of providing
            affordable housing units are to be construed
            an alternative that may be voluntarily
            chosen by developers, which alternative has
            not generally been offered in inclusionary
            ordinances adopted by other municipalities
            and which is not required by any statutory
            provision,   administrative  regulation   or
            court decision to be offered by the City of
            Hoboken and, therefore, rather than imposing
            a burden on developers, has the effect of
            mitigating any potential economic costs on
            developers created by the imposition of the
            inclusionary affordable housing requirements
            of this Article.

            [§ 196-78.]

      Finally,    there     is   a   severability        clause     intended      to

insulate the legally viable sections of the ordinance from any

taint created by a provision a court may find unenforceable: "If

any   provision     of   this    Ordinance     is    declared     invalid,      such

invalidity shall no [sic] affect any other provision of this

Ordinance   which    can    be   given   effect,       and   to    this   end   the

provisions of this Ordinance are declared to be severable."

                           The Hoboken Master Plan

      Part of the record Advance submitted to the trial court is



                                        14                                A-1535-12T2
a copy of the housing element from the City's April 2004 Master

Plan,    which    contained    overview         information      about   the     City's

housing stock and affordable housing needs.                      It describes the

City as "a mature urban community with a diverse residential

population with respect to race, income level and age, and in

the     housing   opportunities       it        provides   for    its    residents."

According to the 2004 master plan, the City's "wide array of

housing types rang[ed] from public housing projects to million-

dollar    condominiums"       and   included       "some   one-    and    two-family

homes,     most    of   which       [were]        constructed      as    row-houses,

apartments above stores, and numerous low-rise, mid-rise, and

high-rise residential buildings."

      The plan showed a number of differences between the City's

housing characteristics and the rest of Hudson County.                          Census

figures compiled from 1990 to 2000 show the City experienced a

higher percentage in growth in the number of housing units than

did Hudson County, fourteen percent as compared to five percent.

The City's median dwelling unit value was nearly three times the

county-wide median value, and the City's median contract rent

was more than forty percent higher than the county-wide level,

"indicating the expensive housing stock value in [the City]."

The City's rents were also significantly higher than the rent

paid by the rest of the residents of Hudson County.                      The median




                                           15                                  A-1535-12T2
gross rent in the City in 2000 was $1002, compared to $703 for

Hudson County.        However, in Hoboken, the median rent increased

from $511 in 1990 to $1002 in 2000.               The master plan noted this

was     "a    jump   of   just    under    50   percent   when   adjusted      for

inflation."

      The City had a development moratorium from 1992 to 1997,

due to a lack of sewer capacity.                A construction boom followed

after the regionalization of sewer services via the North Hudson

Sewerage Authority.4             Nearly all new residential construction

that followed involved multi-family units.                 The master plan's

authors considered it "unlikely that new affordable housing will

be constructed without government action or other intervention

in the real estate market.             In fact, some existing affordable

units        may   lose   their     affordability     controls    when      their

restrictions mandating below-market rents expire."


4
  The North Hudson Sewerage Authority was established in 1988 as
part of a Consent Order in a regulatory enforcement action
brought by the United States Environmental Protection Agency
(EPA), compelling local communities to relinquish control of
their sewer service.      The Authority services the sewerage
disposal needs of the residents of Hoboken, Union City,
Weehawken, and West New York.      The EPA and the New Jersey
Department of Environmental Protection lifted a ten-year ban on
sewer connections in these four municipalities in 1994.     This
sparked the reclamation and development of the Hudson River
waterfront in Hoboken and Weehawken. N. Hudson Sewerage Auth.,
Authority History, N. Hudson Sewerage Auth.,
http://www.nhudsonsa.com/About/history.html (last visited July
13, 2015).



                                          16                             A-1535-12T2
    Between       1990   and     2000,   the    City's       population       increased

sixteen percent, from 33,397 to 38,577 residents.                         Just above

half of the City's population was in the twenty-five to forty-

four-year-old age bracket; growth in that age group increased

36.8 percent from 1990 to 2000.                 The largest population group

decline   over    that    time    period      was    in    children    aged    five   to

seventeen, decreasing by 29.9 percent.                    The City's median age in

2000 was 30.4 years old, far below the statewide average of

thirty-seven.

    The residents of Hoboken also enjoyed a higher standard of

living than the rest of Hudson County.                    As reported in the 2000

census, over 75 percent of Hoboken's residents over the age of

fifteen were "in the labor force[.]"                  Nearly two-thirds of the

City's    residents      had    managerial      or    professional       occupations

during    this   same    time    period.        However,       although       Hoboken's

median household income was $62,550, there was a wide range of

annual income levels; 43 percent of households earned more than

$75,000, while about 22 percent earned less than $25,000.

    The 2004 Master Plan listed approximately 5000 affordable

housing units in the City.            These affordable housing units were

established under various programs; approximately 1000 of these

units    were    restricted      to   senior    citizens       or     residents    with

disabilities.       The Master Plan also included this cautionary




                                         17                                    A-1535-12T2
note: "It is difficult to determine exactly how many units in

the   City     have    controls       on     rents   that     classify     them    as

affordable. . . .        It is noted that the affordability controls

governing these units are at varying stages of their lifespans,

and some are set to expire."

      The plan concluded with fifteen recommendations to protect

and increase the City's existing affordable housing stock.                        The

plan recommended updating and enforcing the existing affordable

housing   regulations       in      the    Zoning    Ordinance,    and    providing

additional      affordable        housing        units   in     new    residential

developments.          Of     particular         relevance     here,      the     plan

specifically noted: "the City currently requires the provision

of affordable units, or payment in lieu of creation, for most

residential     new    construction         or    substantial     rehabilitation.

These regulations should be enforced, particularly for larger

developments."        The plan suggested that the City's regulations

"should   be    reviewed      for    compliance      with     COAH's   Substantive

Regulations     and   other      applicable      requirements."          Fair   Share

included in the appellate record the third round housing element

and fair share plan document adopted by the Hoboken Planning

Board on December 19, 2005.               With some variations, this document

showed statistics similar to those described in the City's 2004

Master Plan.




                                           18                               A-1535-12T2
                                COAH's Jurisdiction

       On December 30, 2008, the City submitted to COAH a petition

for third round substantive certification and a draft housing

element and fair share plan.                       The cover letter explained these

documents remained in draft form because "[t]he City's finances

have been taken over by the State[.]"                                 This further delayed

bringing the matter to a hearing for final adoption.                                      Those

matters were expected to be finalized "early in 2009."

       On February 3, 2009, COAH's then-Executive Director Lucy

Vandenberg informed the City's Mayor that the submission "[did]

not meet the criteria for a petition."                          Thus, "[b]ecause Hoboken

City    did   not   submit          a       petition     for    third    round    substantive

certification by December 31, 2008, it is no longer under the

jurisdiction of COAH."                  Despite this, Vandenberg made clear the

City was "still required to impose non-residential development

fees    pursuant     to    .    .       .    [N.J.S.A. 40:55D-8.1          through     -8.7]."

According     to    Vandenberg,              developers        were    required   to   deposit

those   fees    into      the   statewide               New   Jersey    Affordable     Housing

Trust   Fund,      rather      than          the   City's      affordable    housing      trust

fund.    Vandenberg concluded the letter by encouraging the City

"to once again participate in the COAH process" which could

provide protection from builder's remedy litigation and permit

the City to retain development fees locally.




                                                   19                                  A-1535-12T2
       On April 12, 2011, responding to correspondence from an

attorney representing a developer who is not a party in this

appeal, COAH's Acting Executive Director Sean Thompson confirmed

that   Hoboken    was   "not   currently     under    COAH's   jurisdiction."

Thompson specified two requirements the City was still bound to

fulfill: (1) the imposition of non-residential development fees

pursuant to N.J.S.A. 40:55D-8.1 to -8.7, to be deposited in the

statewide   New   Jersey    Affordable      Housing   Trust    Fund,    and   (2)

continue    to    provide      monitoring     and     oversight    of    monies

transferred to the City pursuant to certain specified regional

contribution agreements.5         We note Thompson did not address or

opine regarding the City's negotiations on a redevelopment plan

through which it sought to impose a twenty percent affordable

housing     set-aside       obligation.             The   record        includes

correspondence from the attorneys representing the developers in

this case and the Acting Executive Director of COAH as well as

5
  Both of these requirements are now moot.       The Legislature
amended   the   FHA   and   abolished  "regional    contributions
agreements" effective July 17, 2008.       N.J.S.A. 52:27D-312.
Following the Supreme Court's decision in In re N.J.A.C. 5:96 &
5:97, supra, 221 N.J. at 6, this court in In re Failure Of The
Council On Affordable Hous. To Adopt Trust Fund Commitment
Regulations, 440 N.J. Super. 220, 227-28 (App. Div. 2015),
enjoined "COAH or any other part of the executive branch from
engaging in any further attempt to seize affordable housing
trust funds" under N.J.S.A. 52:27D-329.2.    We further directed
that "[t]he use and disposition of those funds will hereafter be
decided, in the first instance, by Mount Laurel-designated trial
judges." Id. at 228.



                                     20                                 A-1535-12T2
affidavits from other interested parties.                We have opted not to

describe these exhibits at length because they are not relevant

to our legal determinations.

                                     Advance

    Advance      owned    property    at    1316-1330    Willow   Avenue.      In

2006, the City's Zoning Board granted the property's prior owner

preliminary      site   plan   approval     and   bulk   variance   relief     to

construct    a   mixed-use     development     project    that    included    104

residential units, 7500 square feet of retail space, and 126

parking spaces.         Advance sought and received a total of eight

variances: maximum lot coverage from 60 percent to 97 percent;

minimum rear yard from 30 feet to 0 feet; maximum permitted

distance from front property line to rear wall from 70 feet to

195 feet; number of building stories above one level of parking

from three to four, and a partial fifth story above two levels

of parking; maximum building height from 40 feet to about 68

feet for the main level, with a penthouse and tower at 80 and

100 feet, respectively; residential density from 54 units to 104

units;     increased      amount     permitted     of     non-masonry    façade

material; and increased maximum customer service area from 1000

square feet to 7500 square feet.

    The 2006 Zoning Board resolution did not mention affordable

housing.     Condition 3 noted the application "must comply with




                                       21                               A-1535-12T2
the necessary requirements" of the City's zoning ordinance and

the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163.

Condition 4 further stated:

              The Applicant shall develop, prepare and
              improve the subject premises so as to
              conform with all of the details shown on the
              aforementioned plans and submissions, as
              presented to the Board and in accordance
              with the zoning ordinances, building codes
              and all other standards and ordinances
              unless expressly stated to the contrary
              within the approvals granted.

    This approved project was never built.                              In January 2010,

after Advance became the contract purchaser, the Zoning Board

granted      Advance     an    amended   preliminary             site    plan   approval,

conditional        use   approval,    and     further       variance       relief.        The

Zoning Board granted Advance the following additional variance

relief: increase the number of building stories from four to

seven, plus a penthouse; increase the maximum building height

from 40 feet to 84 feet for the main level, with a penthouse and

tower   at    91    feet   and    9   inches,       and     98   feet     and   9   inches,

respectively; increase the maximum retail area from 1000 square

feet to 21,725 square feet; allow retail use on a block front

which does not presently include two other retail uses; increase

rooftop      coverage      for    appurtenances           from    10     percent     to    19

percent; decrease minimum Willow Street setback from 5 feet to

0 feet;      eliminate        front   yard        fencing    requirement;           increase




                                             22                                     A-1535-12T2
residential    density     from   61 units    to    140   units;   and   allow

various parking garage rule changes.

    The     approval      resolution    described     significant     efforts

Advance was expected to undertake to clean up the prior owners'

environmental contamination on the site.             This resolution again

did not directly mention affordable housing as a condition of

approval.     Condition 9 stated the applicant "must comply with

the necessary requirements" of the City's zoning ordinance and

the MLUL.

    Condition number 8 of the resolution also stated:

            The application for Final Site Plan Approval
            shall conform with all of the details shown
            on the aforementioned Preliminary Site Plan
            Approval   "Resolution   Drawing   Set"   and
            submissions, as presented to the Board or as
            amended as required to comply with the
            conditions   of   this  resolution   and   in
            accordance   with   the  zoning   ordinances,
            building codes and all other standards and
            ordinances unless expressly stated to the
            contrary within the approvals granted.

    In January 2011, the Zoning Board granted Advance what it

characterized as a "de minimus change" regarding the widening of

the sidewalk as "dictated" by the County Planning Board.                  This

resolution again failed to include any reference to the City's

affordable housing ordinance.

    In    April   2011,    the    Zoning    Board   reviewed   and   approved

Advance's Amended Preliminary and Final Site Plan Approval to




                                       23                            A-1535-12T2
address egress and ingress to the parking garage and changes to

the loading dock facilities.        The record includes the following

colloquy between a Hoboken resident and Robert Bloch, Advance's

architect,   which   occurred   when     the   application   was   open   for

public comment:

           RESIDENT: I just have one question. Are the
           plans   that   you   presented   tonight   in
           accordance   with  the   affordable   housing
           ordinance [of] the City of Hoboken?

           ARCHITECT: Yes, they will be.

           RESIDENT: Meaning what?

           ARCHITECT: Well, I would say I am                 not
           completely familiar with that document.

           RESIDENT: Well, then, how could you tell me
           it is in conformance?   You are saying they
           intend to do that?

           ARCHITECT: Maybe [Advance's attorney] could
           answer.

           ADVANCE'S ATTORNEY:    I think the Board is
           going to impose a condition on the approval
           relating to affordable housing[.]

      The Resolution of Approval adopted by the Zoning Board on

May 17, 2011, describes in detail the evidence presented in

support of the application and the variances requested, mentions

the   various   revisions   made   to    the   original   application,    and

lists the developer's witnesses who testified before the Board

and their particular area of expertise.              The resolution also

specifically mentions the exchange between the "resident" and



                                    24                              A-1535-12T2
Advance's   architect          and   its   attorney,       as    quoted     above,    and

notes, "[the Resident][6] was informed that the Board will impose

a   condition      on    the     approval       relating        to   the    applicant's

affordable housing obligation."                 (Emphasis added).           As further

evidence    that        approval     of    the    application         was    expressly

conditioned on Advance's compliance with the City's affordable

housing ordinance, the May 17, 2011 Approval Resolution also

includes the following provision:

            The applicant shall be responsible for
            obtaining any other approvals or permits
            from other governmental agencies, as may be
            required by law, including but not limited
            to the Municipality's and State's affordable
            housing regulations; and the applicant shall
            comply with any requirements or conditions
            of such approvals or permits.

            [(Emphasis added).]

     Advance       has     never      requested      any         relief     from     this

obligation.     The record also does not contain a statement by the

Zoning Board regarding how it expected Advance to comply with

the affordable housing ordinance.                  See Hoboken, N.J., Code §

196-69D (requiring each development to submit to the Planning

Board a plan of compliance with the terms and conditions of the

ordinance).


6
  The Approval Resolution includes the name and address of the
"resident."   We have opted not to include this information in
the opinion to protect the person's privacy.



                                           25                                  A-1535-12T2
                                        1415 Park

    1415 Park owned property at 1415 Park Avenue in Hoboken.

In February 2007, the Zoning Board granted preliminary site plan

approval       and    variance      relief     for    1415      Park     to    demolish      an

existing parking garage and construct a twelve-story mixed-use

development          project     that     included        180     residential           units,

30,000 square feet of retail space, 46,055 square feet for an

elementary charter school, and 371 parking spaces.                                  The second

application submitted in 2011 is the one challenged by Fair

Share in this appeal.               In this second application, 1415 Park

sought    to    construct      a    twelve-story         residential          building    that

would accommodate 212 apartments, retail space, a significantly

smaller    school       (reducing       its    proposed         school    facility         from

46,055 square feet in 2007 to 30,000 square feet in 2011), and

thirty more parking spaces, resulting in a total of 401 parking

spaces.

    The transcription reflecting verbatim the discussions                                    of

the members of the Zoning Board during the June 28, 2011 meeting

approving       the    1415    Park     application          indicates         the     Board's

preoccupation         with    including       in   the   resolution           the    "standard

language       pertaining          to   the        [C]ity's       affordable           housing

ordinance."          The following colloquy also makes clear that the

Board expected that mandate to be carried out as a "percentage"




                                              26                                      A-1535-12T2
of the dwelling units:

           BOARD CHAIRMAN: We're doing that.

           BOARD MEMBER: What's the percentage, sir? I
           forgot.

           BOARD COUNSEL: I don't have it in front of
           me right this second, I apologize.

           BOARD MEMBER:     Are      we    doing   that   on   every
           application?

           BOARD COUNSEL: This Board is doing it.

           BOARD CHAIRMAN: Just in case, just in case.

           BOARD MEMBER:     Thank you.         That's a biggie.

           BOARD   COUNSEL: We   always have  certain
           standardized conditions and that's one of
           them[.]

    Condition number 3 of the resolution also stated:

           The Applicant shall develop, prepare and
           improve the subject premises so as to
           conform with all of the details shown on the
           aforementioned plans and submissions, as
           presented to the Board and in accordance
           with the zoning ordinances, building codes
           and all other standards and ordinances
           unless expressly stated to the contrary
           within the approvals granted.

    Several     variances    were     granted:      increasing     maximum    lot

coverage from 65 percent to 81 percent; increasing number of

building   stories    from   eight         to   twelve;    increasing   maximum

building height from 80 feet to 138 feet; decreasing minimum

front yard and rear yard setbacks from 10 feet and 20 feet,

respectively,    to   0   feet   in    both      yards;    increasing   maximum



                                       27                               A-1535-12T2
permitted signage from 200 square feet to 345 square feet; and

allowing parking variances for a "robotic" parking garage that

did not use parking "spaces" or aisles.

       The resolution states, in granting the approval:

           4.   The applicant shall be responsible for
           obtaining any other approvals or permits
           from other governmental agencies, as may be
           required by law, including but not limited
           to the Municipality's and State's affordable
           housing regulations; and the applicant shall
           comply with any requirements or conditions
           of such approvals or permits.

           5.   The applicant must comply with the
           Development Fee Ordinance of the City of
           Hoboken, if applicable, which Ordinance is
           intended to generate revenue to facilitate
           the provision of affordable housing.

Nothing   in   the    record   before     us    indicates   1415    Park   ever

objected to or opposed any of these conditions at the time of

the approval.

                                9th Monroe

       9th Monroe owns property at 900 Monroe Street in Hoboken

which consists of several lots as determined by the municipal

tax assessor. In June 2007, under a prior owner (900 Monroe

Development, LLC), the City's Zoning Board granted final site

plan    approval     (preliminary   site       plan   approval    having   been

granted in October 2005) and variance relief for construction on

this site, which previously had industrial uses.                 As amended in

the final approval, the site was approved for construction of a



                                     28                               A-1535-12T2
mixed-use    development       project      that    included    112    residential

units, 7608 square feet of retail space, 10 townhouses, and 151

parking spaces.        9th Monroe received variances regarding the

following: permitted use; maximum number of stories; minimum lot

width;   maximum      lot   coverage;       and    minimum     side   yard.      The

approval    resolution      did    not    mention     affordable      housing,   but

stated, as condition 3, that the application "must comply with

the necessary requirements" of the City's zoning ordinances and

of the MLUL.

    Condition number 4 of the resolution also stated:

            The Applicant shall develop, prepare and
            improve the subject premises so as to
            conform with all of the details shown on the
            aforementioned plans and submissions, as
            presented to the Board and in accordance
            with the zoning ordinances, building codes
            and all other standards and ordinances
            unless expressly stated to the contrary
            within the approvals granted.

    This approved project was never built.                   As the new owner of

900 Monroe Street, 9th Monroe applied in 2011 to amend the 2007

approvals.      The    Zoning      Board    approved    9th     Monroe's    amended

preliminary    site    plan,      which    included    the   following     variance

relief: a use variance to allow residential uses; an increase of

maximum building height from 80 feet to 126.5 feet, and eleven

stories where the zoning ordinance permitted a maximum of four

stories; residential density of 135 units, beyond the previously




                                           29                              A-1535-12T2
approved 112 units; an automated garage of 188 spaces, with ten

at grade; and a decrease of the minimum amount of masonry façade

material from 75 percent to 34 percent.

    The approval resolution conditions included the following:

           4.   The applicant shall be responsible for
           obtaining any other approvals or permits
           from other governmental agencies, as may be
           required by law, including but not limited
           to the Municipality's and State's affordable
           housing regulations; and the applicant shall
           comply with any requirements or conditions
           of such approvals or permits.

           5.   The applicant must comply with the
           Development Fee Ordinance of the City of
           Hoboken, if applicable, which Ordinance is
           intended to generate revenue to facilitate
           the provision of affordable housing.

Nothing in the record before us indicates 9th Monroe objected to

or opposed any of these conditions at the time of the approval.

                             NJ Casket

    NJ Casket   owns   property   at   1400-1404   Clinton   Street    in

Hoboken.   The property covers several lots as determined by the

municipal tax assessor.   In August 2007, the City's Zoning Board

granted preliminary site plan approval and variance relief for

construction of a "mixed-use live-work loft building" on this

site.   As noted in the approval resolution, NJ Casket received

the following variances: allowing residential uses in a district

zoned for manufacturing and office uses; increasing maximum lot

coverage from 65 percent to 100 percent on the ground floor and



                                  30                           A-1535-12T2
76    percent    on    the    higher      floors;         increasing     the   number    of

building stories from four to six; and decreasing minimum front

yard, side yard, and rear yard setbacks from 10 feet, 10 feet,

and 20 feet, respectively, to 0 feet in all three yards.                                The

approval      resolution      did       not    mention         the   affordable   housing

ordinance.        Condition         2     included         a    generalized     statement

requiring       the     applicant         to        "comply      with    the    necessary

requirements" of the City's zoning ordinances and of the MLUL.

       The original 2007 proposal was for a seven-story building

with a mix of "live/work studios" and traditional residential

units, in an area zoned for manufacturing and office uses.                              The

studio/regular unit mix was initially proposed as 10/54, but was

changed to 20/30 in the original preliminary site plan approval.

In August 2010, NJ Casket sought and obtained approval to change

the   ratio     again,   to    10/49.           That      approval      also   noted   some

additional      variances      requested            and    approved,      including     for

twenty-five percent roof coverage, where the zoned maximum was

ten percent.          In that approval resolution, adopted in January

2011, the Zoning Board included among the terms and conditions

the following:

              4.   The applicant shall be responsible for
              the obtaining of any other approvals or
              permits from other governmental agencies, as
              may be required by law, and the applicant
              shall   comply  with   any  requirements  or
              conditions of such approvals or permits.



                                               31                                 A-1535-12T2
          5.   The applicant shall be responsible for
          the obtaining of any other approvals or
          permits from other governmental agencies, as
          may be required by law, and the applicant
          shall   comply  with   any  requirements   or
          conditions of such approvals or permits,
          including compliance with COAH regulations.

          6.   An    essential    and     non-severable
          condition of this approval is compliance
          with the Development Fee Ordinance of the
          City   of  Hoboken,  if   applicable,   which
          Ordinance is intended to generate revenue to
          facilitate   the  provision   of   affordable
          housing.

    NJ Casket received final site plan approval in early 2012,

without any significant changes to its plans.             The approval

resolution included the following conditions:

          4.   The applicant shall be responsible for
          obtaining any other approvals or permits
          from other governmental agencies, as may be
          required by law, including but not limited
          to the Municipality's and State's affordable
          housing regulations; and the applicant shall
          comply with any requirements or conditions
          of such approvals or permits[.]

          5.   The applicant must comply with the
          Development Fee Ordinance of the City of
          Hoboken, if applicable, which Ordinance is
          intended to generate revenue to facilitate
          the provision of affordable housing.

    Consistent with the way the other developers behaved, the

record before us does not indicate NJ Casket objected to or

opposed any of these conditions at the time of the approval.

                                  II

    On   November   9,   2012,   the   trial   court   issued   a   final



                                  32                            A-1535-12T2
judgment in this consolidated matter confirming earlier rulings

it   had   issued    on   June   1,   2012.     The     court    found    Hoboken's

Affordable Housing Ordinance, codified as § 196-68 to -81, "is

inconsistent with the Municipal Land Use Law, the Fair Housing

Act,    and    the    procedures       and    guidelines        that     have   been

promulgated by the Council on Affordable Housing[.]"                      The court

"declared" the ordinance "null, void, and unenforceable as a

matter of law[.]"         The court enjoined the City from enforcing

"any   requirement"       on   the    developers   to    construct       affordable

housing units and/or collect from these developers "any monetary

contribution" related to the affordable housing.

       Without citing to any specific statute, the trial judge

reached the following conclusion:

              [I]t   is   the  [c]ourt's  view   that   the
              Legislature's intent was not that COAH
              review ordinances or review municipalities
              one time and leave it alone.         COAH is
              intended, the [c]ourt's view, to be a
              vehicle that is permanent, fluid, consistent
              and regular. In that, the [c]ourt takes the
              position that COAH is vested with the
              authority not only to review the existing
              ordinances at the time that Mount Laurel
              became effective but, also, to continue the
              review. In other words, they would be able
              to determine whether there was a need to
              alter,   modify,  increase  or   decrease   a
              municipality's fair share responsibilities
              which   necessarily   would  require    their
              involvement through the entire process at
              some point.

       The trial court found support for this expansive oversight



                                         33                                 A-1535-12T2
role for COAH in Holmdel Builders Ass'n v. Holmdel, 121 N.J. 550

(1990).     Without citing to any specific language or analysis in

Holmdel or discussing the facts of that case, the trial court

concluded    the     Supreme      Court     in    Holmdel      "held     that     every

municipality with an affordable housing obligation must submit

to COAH for approval of its plan to meet that need."

    Fair Share and the City both argue the trial court erred in

holding   all   municipal         affordable      housing      ordinances       require

review by COAH, whether or not the municipality is under COAH

jurisdiction seeking substantive certification.                        They maintain

the trial court failed to appreciate the voluntary nature of

COAH's jurisdiction, and the alternative route the FHA provides

to municipalities under N.J.S.A. 52:27D-313(a).

    1415     Park,   9th    Monroe,       and    NJ Casket     collectively       argue

COAH's    involvement       was    required       in     all   matters     affecting

affordable    housing      and    satisfaction      of    obligations     under     the

Mount Laurel doctrine.            According to these developers, the FHA

was intended to preempt the field, thus rendering the City's

inconsistent affordable housing ordinance invalid.

    We are satisfied the trial court misconstrued the purpose

and role the Legislature intended COAH to play in assisting

municipalities in fulfilling their constitutional obligation to

provide a realistic opportunity for the construction of their




                                          34                                A-1535-12T2
fair share of the present and prospective regional need for low

and moderate income housing.       See Mt. Laurel I, supra, 67 N.J.

at   174.    The   substantive   certification   process   available     to

municipalities      under    N.J.S.A.     52:27D-313(a)    is    entirely

voluntary.    Toll Bros., Inc., supra, 173 N.J. at 513, 545.            As

Justice LaVecchia explained:

            The FHA created the Council on Affordable
            Housing   (COAH),  which   was  designed   to
            provide     an    optional     administrative
            alternative   to  litigating   constitutional
            compliance through civil exclusionary zoning
            actions. Under the FHA, towns are free to
            remain in the judicial forum should they
            prefer it as the means to resolve any
            disputes     over    their     constitutional
            obligations.

            [In re N.J.A.C. 5:96 & 5:97, supra, 221 N.J.
            at 4.]

There are no provisions in the FHA or regulations promulgated

by COAH that required Hoboken in 1988 to submit its affordable

housing ordinance for approval by COAH.           This question is so

firmly settled that it requires no further elaboration.           See In

re Adoption of N.J.A.C. 5:94 & 5:95, supra, 390 N.J. Super. at

6-9.

                                   III

       What is not settled, however, is whether the "payment in

lieu"   provisions    in    Hoboken's    affordable   housing   ordinance

needed COAH's approval under the Court's decision in Holmdel.




                                    35                           A-1535-12T2
Analysis of this issue requires a brief recitation of the legal

landscape prior to and after the Holmdel decision.                            Before the

Court issued its decision in Holmdel, COAH had proposed and

adopted some relevant regulations.                   These amendments to COAH's

first-round rules were proposed in April 1988, adopted in June

1988,     and    codified        at   N.J.A.C. 5:92-8.4          under      the     heading

"Developer       Agreements."          20 N.J.R.      865     (Apr.    18,       1988);    20

N.J.R. 1689 (July 18, 1988).

    In its proposal, COAH noted its prior rules provided that

inclusionary developments should presumptively contain a twenty

percent    set-aside        of    affordable        housing      units,     at     a   gross

density of six units per acre.                This was intended to "provide a

reasonable       balance    necessary        to   insure      that    the    project      is

realistic and will actually be constructed."                           20 N.J.R. 865.

After     it    received     several        plans    that     deviated       from      those

requirements,       COAH    found      it    necessary      to    develop         standards

regarding its consideration of such deviations.                             Ibid.       COAH

analyzed        developer        agreements       throughout         the     state,       and

determined deviations from the presumptive requirements should

be permitted if the three following conditions were met: "1.

That the agreement continues to provide the requisite realistic

opportunity [for affordable housing]; 2. That the agreement not

unduly burden the market units; and 3. That the developer must




                                             36                                    A-1535-12T2
have    the    experience   and   financial   ability   to   perform   its

obligations.      The burden is on the municipality proposing the

agreement."      Ibid.

       The result of this process was the adoption of N.J.A.C.

5:92-8.4(d), through which COAH codified those three conditions

and additionally provided increased densities and incentives for

developers to build the affordable housing:

              (e) All agreements where the market units
              are single family detached dwellings may
              provide that, in exchange for an increase
              over existing density, the developer either:
              construct low and moderate income units as
              part of an inclusionary development; or pay
              a voluntary fee to be utilized by the
              municipality    for    an    RCA    [regional
              contribution   agreement]    or   municipally
              constructed low and moderate income housing.
              The developer's expense in either case must
              bear   a  reasonable   relationship  to   the
              increase in density, such that the agreement
              does not violate the test in (d)l.-3. above.

              (f) Agreements where the market units are
              multi-family dwellings may permit deviations
              from the presumptive requirements of a 20
              percent set-aside:

              l. Where there is also an increase over
              existing density. For example, in cases
              where the allowable density exceeds the
              presumptive minimum density requirement (for
              example, 10 to 16 units per acre on a multi-
              family development) it may be reasonable to
              have a set-aside higher than 20 percent.

              2. Where the developer builds a higher
              proportion of moderate to low income units;
              or




                                     37                          A-1535-12T2
            3. Where the agreement contains a comparable
            incentive.

            4. Absent such incentives, a deviation from
            the    presumptive   requirement    is   not
            permitted.   For example, an ordinance which
            requires a set-aside higher than 20 percent
            or a 20 percent set-aside plus additional
            fees, and which permits only the minimum six
            units per acre and an equal split of low to
            moderate income units without any additional
            bonus densities or without other significant
            cost reductions or other incentives to the
            developer would not meet the test of
            (d) above since it results in a significant
            reduction of the realistic opportunity.

            5. No agreement may provide for a voluntary
            developer fee without also providing for a
            comparable off-setting incentive.

            [20 N.J.R. 1689-90.]7

      These regulatory changes occurred before the City adopted

its affordable housing ordinance in May 1988.            A representative

from COAH met with the City Council at a special meeting prior

to   the   unanimous   adoption   of    the   City's   affordable   housing

ordinance.    COAH made more regulatory changes in December 1990

in response to the Court's Holmdel decision.

      Holmdel arose from "attempts by several municipalities to

comply with their obligation to provide a realistic opportunity

7
  These regulations were adopted as proposed. See 20 N.J.R. 865.
They generated only a few comments.        20 N.J.R. 1689.    In
response, COAH emphasized the need for appropriate incentives to
developers to create a regulatory environment that provided a
realistic opportunity for the housing to actually be built.
Ibid.



                                       38                           A-1535-12T2
for the construction of affordable housing under [the] ruling in

Mt. Laurel II and the provisions of the FHA."                  Holmdel supra,

121 N.J. at 556.          After reviewing the history of the FHA and

COAH's then evolving regulatory role and identity, the Supreme

Court concluded,

           agency rulemaking is reasonably required in
           order to fulfill the legislative purpose of
           the FHA with respect to inclusionary-zoning
           measures. We further conclude that COAH's
           exercise of its rulemaking authority in the
           area of inclusionary zoning is incomplete
           because   COAH  has   not  yet   specifically
           addressed mandatory development fees as
           available inclusionary zoning devices.

           [Id. at 578 (emphasis added).]

       As a result, "the development-fee ordinances were subject

to review and certification by COAH as a constituent part of the

housing-element plan of the respective municipalities."                     Id. at

579.    The Court determined "that COAH, through its rulemaking

procedures, should specify standards for development fees, so

that    municipalities       may    consider    employing      such    fees     as

inclusionary-zoning devices in designing their housing elements

under the FHA."      Ibid.

       After   discussing     and    rejecting       various   constitutional

challenges,    id.   at    581-84,    the    Court    emphasized      the    clear

"similarities between mandatory set-asides and the development-

fee ordinances."      Id. at 584.           Harking back to Mt. Laurel II,




                                       39                               A-1535-12T2
supra, 92 N.J. 158, the Holmdel Court reminded the litigants

that "mandatory set-asides as a form of inclusionary zoning were

not analogous to a tax.               We viewed them as legitimate regulatory

measures       suitably       addressed       to     the    broad        goals       of     zoning.

Development fees, to reiterate, perform an identical function."

Ibid.      Thus, the Court in Holmdel affirmed in part and reversed

in     part,    holding:        "Because        of      the       absence           of     enabling

administrative          regulations,           we         hold        that      the         current

development-fee ordinances were not validly adopted."                                        Id. at

586.

       Three months later, in March 1991, COAH published in the

New    Jersey     Register      a     notice       of   pre-proposal            for       Mandatory

Developer Fee Regulations, citing COAH's intent to adopt rules

to    implement    the       Holmdel    decision.           23        N.J.R.    646       (Mar.     4,

1991).         COAH     characterized          Holmdel           as     having           held     that

municipalities         were    authorized          under    the       FHA,     MLUL,       and     the

police     power       "to     establish       mandatory           developers'             fees     on

commercial and non-inc1usionary residential property to fund low

and moderate income housing but that municipalities could not

exercise that authority until COAH adopted rules establishing

the    circumstances          under    which       such     fees       may     be    permissibly

collected and spent."                 Ibid.         To establish such rules, COAH

wrote    that     it    had    formed     a    Task        Force       and     was       soliciting




                                               40                                           A-1535-12T2
comments from interested parties on the following issues:

              the overall wisdom of mandatory developers'
              fees in the overall context of the State's
              affordable housing policy; the type of
              developments that should be subject to fees;
              the amount of the fees imposed and the
              nature of its assessment; the relationship
              of   fees   to    other   inclusionary-zoning
              measures such as mandatory set-asides and
              density bonuses, the conditions for the
              creation and administration of affordable
              housing trust funds; the requirements for
              the use and application of such funds,
              whether a system of development fees should
              include counterbalancing density bonuses;
              and any other relevant concerns.

              [Id. at 646-47.]

COAH also issued an order authorizing municipalities to retain

previously collected fees pending its rules promulgation, adding

that    the     anticipated      rules    "will      address   the     appropriate

disposition of any fees collected prior to the Supreme Court's

Holmdel decision."         Id. at 647.

       COAH    proposed    its   new     rules    in    September    1991.       COAH

determined that, as a general rule, a municipality wishing to

collect development fees would need to undertake the otherwise

optional step of petitioning COAH for substantive certification.

23 N.J.R. 2813 (Sept. 16, 1991).                   COAH would review the fee

collection      proposal    as   part    of    its     comprehensive    review      of

substantive certification.             Ibid.     Several circumstances would

require       exceptions    to    that     rule,       including    these:      where




                                         41                                  A-1535-12T2
municipalities already had received substantive certification or

the   court-issued      alternative      judgment       of   repose;       where

exclusionary   zoning   cases   were    in    litigation;    or    where    fees

already had been collected.      Ibid.

      COAH set forth another exception relating to "urban aid

municipalities,"     which   expressly       included   Hoboken.       See     18

N.J.R. 1547 (August 4, 1986); 26 N.J.R. 2352 (June 6, 1994)

(listing urban aid municipalities including the City in first

and second round rule adoptions).            As to these municipalities,

COAH explained:

          Urban aid municipalities present a special
          case.        These     municipalities     have
          historically  accepted    a   disproportionate
          share of New Jersey's poor and, as a result,
          many   have  exceedingly    high  fair   share
          obligations. Therefore, it would be very
          difficult for these cities, as a class, to
          address their entire obligation in a six
          year period.

               The Legislature has recognized the
          effort of urban aid cities in Section 302
          and 320 of the Fair Housing Act.          The
          Council has recognized the role urban aid
          municipalities    have   accepted    in   its
          methodology.   Urban aid municipalities have
          not been assigned reallocated present need
          or prospective need. Therefore, the Council
          will allow these municipalities to collect
          fees    outside     of    the     substantive
          certification process.

          [23 N.J.R. 2814 (emphasis added).]

      Substantively, the proposed rule described both how fees




                                   42                                  A-1535-12T2
could   be     collected    and   how      COAH     would    analyze    whether

municipalities could retain fees that had been paid prior to the

rule's adoption.       On the latter issue, COAH wrote:

             The Council has determined that it is vital
             for   purposes    of    implementing   the   Fair
             Housing Act for municipalities to have the
             opportunity    to    retain   development    fees
             collected   prior     to   December   13,   1990.
             Millions of dollars were collected as a
             result of ordinances regulating development
             during years of substantial real estate
             activity.   These residential and commercial
             projects were not directly related to the
             satisfaction of a municipality's fair share
             obligation,   yet     they   consumed   the   one
             irreplaceable resource for satisfying the
             town's obligation under the Fair Housing
             Act.

             [Ibid. (emphasis added).]

    COAH     further    highlighted     that   development      approvals     had

been conditioned on payment of the fees, so now the development

sites were no longer available to satisfy the affordable housing

obligation.      "Therefore, a resource that could have been used

for low and moderate income housing will have been dissipated,

unless municipalities can retain development fees."                   Ibid.     It

was thus equitable to allow the municipalities to retain the

fees.   Ibid.

    COAH      explained    further    that     it   had     studied    available

municipal ordinances in New Jersey and throughout the nation to

craft fee maximums, based on a percentage of equalized assessed




                                      43                                A-1535-12T2
valuation that would not be confiscatory.               Ibid.     COAH's rules

would allow higher fees if a compensatory benefit, such as a

density bonus, was allowed, or under a negotiated agreement with

the developer.       Ibid.   With this approach, COAH deleted as no

longer necessary its prior rule regulating voluntary agreements,

N.J.A.C. 5:92-8.4(d) through (g).          Ibid.

    As part of this 1991 rule proposal, in the sections setting

forth the "Basic requirements" and "Urban aid municipalities"

rules,    municipalities     were     prohibited       from     collecting    or

spending funds without COAH's approval.                Id. at 2816 (setting

forth the proposed rules N.J.A.C. 5:92-18.2 and -18.3).

    As to the maximum fees that would be allowable under the

rules without granting additional density bonuses, the proposed

N.J.A.C. 5:92-18.10 allowed municipalities to collect one-half

of one percent of the equalized assessed value for residential

development,    and     proposed    N.J.A.C.       5:92-18.11     allowed    one

percent   of   the    equalized    assessed    value    for   non-residential

developments.        Id. at 2817 (setting forth the proposed rules

N.J.A.C. 5:92-18.10 and -18.11).           Negotiated agreements, subject

to COAH's approval, could be allowed if they included incentives

in exchange for higher fees.        Ibid.

    Similar to the ordinance at issue here, the rule provided

for payments in lieu as follows:




                                      44                               A-1535-12T2
              (c) Municipalities may allow developers of
              sites zoned for inc1usionary development to
              pay a fee in lieu of building low and
              moderate income units provided the Council
              determines the municipal housing element and
              fair   share  plan   provides   a  realistic
              opportunity for addressing the municipal
              fair share obligation.    The fee may equal
              the cost of subsidizing the low and moderate
              income units that are replaced by the
              development   fee.       For   example,   an
              inclusionary development may include a 20
              percent set-aside, no set-aside and a fee
              that is the equivalent of a 20 percent set-
              aside or a combination of a fee and set-
              aside that is the equivalent of a 20 percent
              set-aside.

              [Ibid. (setting forth the            proposed    rule
              N.J.A.C. 5:92-18.10(c)).]

       These     rules    were   adopted    in   December    1991,    effective

January 21, 1992, as N.J.A.C. 5:92-18.1 to -18.20, with minimal

changes.       24 N.J.R. 235, 242-45 (Jan. 21, 1992).

       As this historical recitation demonstrates, Holmdel and the

regulatory scheme it spawned were meant to address development

fees, not payments in lieu as described in Hoboken's affordable

housing ordinance.         Holmdel, supra, 121 N.J. at 578.            Although

the Middletown Township payment-in-lieu provision in Holmdel was

substantially similar to the provision in Hoboken's ordinance,

the Holmdel case involved a very dissimilar procedural posture

from    the     present    matter.         The   Holmdel    case   arose   when

municipalities were first tinkering with the idea of development

fees.    The Holmdel Court wanted COAH's regulatory input on this



                                       45                              A-1535-12T2
issue   before    the   State's   numerous     municipalities       created       a

multitude of "cash cow" ordinances unrelated, and perhaps even

inimical, to the public policy and constitutional underpinnings

of the Mount Laurel Doctrine.             The case before us here arose

decades later, when COAH's position on how to deal with fees had

been long established.

    Independent     of    this    historical      analysis,    we   also     find

support for this outcome in the FHA.              N.J.S.A. 52:27D-329.3(a)

expressly authorizes "Payments in lieu" subject to regulatory

oversight by COAH only when a municipality seeks substantive

certification:

           The council may authorize a municipality
           that    has   petitioned   for    substantive
           certification    to   impose   and    collect
           payments-in-lieu of constructing affordable
           units on site upon the construction of
           residential development, which payments may
           be   imposed   and  collected   as   provided
           pursuant to the rules of the council.
           Payment-in-lieu fees shall be deposited into
           a trust fund, and accounted for separately
           from   any   other  fees   collected   by   a
           municipality. Whenever a payment-in-lieu is
           charged by a municipality pursuant to this
           subsection, a development fee authorized
           pursuant to section 8 of P.L.2008, c.46
           (C.52:27D-329.2) shall not be charged in
           connection with the same development.

           (Emphasis added).

    This    key     distinction      is    also    replicated       in    COAH's

regulations.      Under   N.J.A.C.    5:97-8.3(b),      a     municipality       is




                                     46                                  A-1535-12T2
authorized to impose "development fees" after it has "petitioned

the    Council"    and   obtained   approval    of   its    "development    fee

ordinance":

            No   municipality,    except    municipalities
            seeking to achieve or that have received a
            judgment of compliance, shall impose or
            collect   development    fees     unless   the
            municipality has petitioned the Council with
            an adopted Housing Element and Fair Share
            Plan and the Council has approved the
            municipality's   development   fee   ordinance
            pursuant to N.J.A.C. 5:96-5.1.

            [N.J.A.C. 5:97-8.3(b).]

       By   contrast,      N.J.A.C.        5:97-8.4(a),     the     regulation

permitting municipalities to include "payments in lieu" as an

"option for onsite construction," does not contain the kind of

COAH    approval     process   reflected       in    N.J.A.C.     5:97-8.3(b).

Indeed, N.J.A.C. 5:97-8.4(a) provides,

            [a] municipality may, as an option to the
            on-site construction of affordable housing
            otherwise required by ordinance, provide for
            a payment in lieu of construction subject to
            the   requirements     of this  section  and
                               [8]
            N.J.A.C. 5:97-6.4.

       To summarize, the payment in lieu section of the Hoboken

Affordable Housing Ordinance did not require approval by COAH as

a condition of enforcement.




8
  N.J.A.C. 5:97-6.4 describes          the     provisions    of   "Zoning   for
inclusionary development."



                                      47                              A-1535-12T2
                                    IV

                              Conclusion

    We    reverse   the   trial   court's   decision   invalidating   the

Hoboken Affordable Housing Ordinance for the reasons expressed

here.    We remand these cases to the trial court for such further

proceedings as may be necessary to address and adjudicate to

finality the remainder of the issues raised by defendants/third-

party plaintiffs.

    Reversed and remanded.        We do not retain jurisdiction.




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