                NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-3323-15T1
IN RE DECLARATORY JUDGMENT
ACTIONS FILED BY VARIOUS             APPROVED FOR PUBLICATION
MUNICIPALITIES, COUNTY OF
OCEAN, PURSUANT TO THE                    July 11, 2016
SUPREME COURT'S DECISION IN
                                       APPELLATE DIVISION
In Re Adoption Of N.J.A.C.
5:96, 221 N.J. 1 (2015).
____________________________

         Argued June 6, 2016 – Decided July 11, 2016

         Before Judges Lihotz, Fasciale and Nugent.

         On appeal from an interlocutory order of
         Superior Court of New Jersey, Law Division,
         Ocean County, Docket No. L-2640-15.

         Jeffrey R. Surenian argued the cause for
         appellant Township of Barnegat (Jeffrey R.
         Surenian & Associates, L.L.C., attorneys;
         Mr. Surenian, Michael A. Jedziniak, Erik C.
         Nolan, and Michael J. Edwards, on the
         briefs).

         Kevin   D.  Walsh   argued   the  cause  for
         respondent Fair Share Housing Center (Mr.
         Walsh and Adam M. Gordon, on the brief).

         Stephen M. Eisdorfer argued the cause for
         respondent New Jersey Builders Association
         (Hill   Wallack,   L.L.P.,   attorneys;  Mr.
         Eisdorfer, Thomas F. Carroll, III, and Emily
         P.W. Santoro, on the brief).

         Edward J. Buzak argued the cause for
         respondent NJ State League of Municipalities
         (The Buzak Law Group, L.L.C., attorneys; Mr.
         Buzak, on the brief).
Richard J. Hoff, Jr. argued the cause for
respondent Highview Homes, L.L.C. (Bisgaier
Hoff,   L.L.C.,  attorneys;   Mr.  Hoff and
Danielle Novak Kinback, on the brief).

Edward J.     Boccher argued the cause for
respondent    Township of Brick (DeCotiis,
Fitzpatrick   & Cole, L.L.P., attorneys; Mr.
Boccher, of   counsel and on the brief; Louis
N. Rainone     and Wendy Rubinstein, on the
brief).

Gilmore & Monahan, P.C., attorneys for
respondents Township of Jackson and Township
of Little Egg Harbor, join in the brief of
appellant Township of Barnegat.

DiFrancesco, Bateman, Kunzman, Davis, Lehrer
& Flaum, P.C., attorneys for respondent
Township of Toms River, join in the brief of
appellant Township of Barnegat.

Gluck   Walrath,   L.L.P.,    attorneys  for
respondent Township of Ocean, join in the
brief of appellant Township of Barnegat.

Dasti, Murphy, McGuckin, Ulaky, Koutsouris,
& Connors, attorneys for respondent Township
of Stafford, join in the brief of appellant
Township of Barnegat.

Jonathan E. Drill argued the cause for
amicus curiae The Municipal Group (Stickel,
Koenig, Sullivan & Drill, L.L.C., attorneys;
Mr. Drill, of counsel and on the brief).

Donald J. Sears argued the cause for amicus
curiae Township of South Brunswick.

Ronald L. Israel argued the cause for amicus
curiae Colts Neck Township (Chiesa Shahinian
& Giantomasi, P.C., attorneys; Mr. Israel,
on the brief).

Archer & Greiner, P.C., attorneys for amicus
curiae Township of Middletown (Brian Michael



                       2                        A-3323-15T1
          Nelson, of counsel and on the brief; Kira S.
          Dabby, on the brief).

          Michael B. Steib, attorney for amicus curiae
          Township of Millstone.

          Lowenstein Sandler, L.L.P., attorneys for
          amicus curiae American Planning Association-
          New Jersey Chapter, New Jersey Future, and
          the Housing & Community Development Network
          of New Jersey (Catherine Weiss and Katy
          Akopjan, on the brief).

          Disability Rights New Jersey, amicus curiae,
          for itself, and The Supportive Housing
          Association of New Jersey, The Housing
          Community Development Network of New Jersey,
          Collaborative   Support   Programs   of   New
          Jersey, The Alliance for the Betterment of
          Citizens with Disabilities, The New Jersey
          Association of Community Providers, The Arc
          of New Jersey, New Jersey Association of
          Mental Health and Addiction Agencies, The
          Coalition   of    Mental   Health    Consumer
          Organizations,    The    System    of    Care
          Association, The New Jersey Psychiatric
          Rehabilitation   Association,    The   Mental
          Health Association in New Jersey, Advancing
          Opportunities, Community Access Unlimited,
          The Community Health Law Project, and Autism
          New Jersey (Iraisa Orihuela-Reilly, Susan
          Saidel, and Joseph B. Young, on the brief).

    The opinion of the court was delivered by

FASCIALE, J.A.D.

    In   the   wake   of   the   New       Jersey   Supreme   Court's   order

requiring judicial oversight of municipal housing obligations to

preclude exclusionary development schemes, see In re Adoption of

N.J.A.C. 5:96 & 5:97 by the New Jersey Council on Affordable

Housing, 221 N.J. 1 (2015) (In re N.J.A.C. 5:96 II), we granted



                                       3                            A-3323-15T1
the Township of Barnegat's1 motion for leave to appeal from an

interlocutory order entered by a designated Mount Laurel2 judge,

directing the court's Special Regional Master to include, as a

new,   "separate   and   discrete"   component,    an   additional

calculation for establishing a municipality's affordable housing

need from 1999 to 2015 (the gap period).3   In entering the order,

the judge concluded that a municipality's fair share affordable

housing obligation for the third-round cycle is comprised of (1)

its newly-created, court-imposed, "separate and discrete" gap-


1
     We granted leave to appeal on behalf of the Township of
Barnegat, In re Twp. of Barnegat, L-1856-15, along with twelve
consolidated declaratory judgment complaints filed by Ocean
County municipalities: In re Borough of Beach Haven, L-2217-15;
In re Township of Berkeley, L-1855-15; In re Township of Brick,
L-1857-15; In re Township of Jackson, L-1879-15; In re Township
of Lacey, L-1912-15; In re Township of Little Egg Harbor,
L-1911-15; In re Township of Manchester, L-1910-15; In re
Township of Ocean, L-1884-15; In re Borough of Pine Beach,
L-1687-15; In re Borough of Point Pleasant, L-1858-15; In re
Township of Stafford, L-1913-15; and Township of Toms River,
L-1867-15.
2
    S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 67 N.J. 151
(Mount Laurel I), appeal dismissed and cert. denied, 423 U.S.
808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975); and S. Burlington
Cty. NAACP v. Twp. of Mount Laurel, 92 N.J. 158 (1983) (Mount
Laurel II).
3
    The February 18, 2016 order includes a signature of another
judge who handled two of these thirteen consolidated matters,
and who joined the opinion of the Mount Laurel judge. Reference
in our decision to the "court" or "judge" refers to the Mount
Laurel judge who entered the order and rendered the opinion
under review.




                                4                         A-3323-15T1
period obligation; (2) unmet prior round obligations from 1987

to 1999; (3) present need; and (4) prospective need.

      We granted amicus status to the following entities that

urged us to reverse the order: Colts Neck Township; Township of

Millstone; Township of Middletown; Township of South Brunswick;

The Municipal Consortium; and the Municipal Group.4                               The New

Jersey    State   League      of   Municipalities           (NJLM)   also      appeared

before the court as a respondent.

      These entities contend the court is without legal authority

to   create   a   "separate        and   discrete"       gap-period      obligation.

Instead, they maintain that a municipality's affordable housing

obligation for the third-round cycle is comprised of unmet prior

round    obligations     from       1987       to   1999,     present        need,      and

prospective need.        They argue that prospective need projects

into the future a town's housing obligation for ten years from

the current time, not from the beginning of the gap period in

1999.    They acknowledge that the identifiable housing need that

arose    during   the   gap    period      would    be   captured       by    a    town's

present need obligation, but they are adamant that there is no

"separate and discrete" gap-period obligation.

4
     The Municipal Group is a formal coalition of hundreds of
municipalities organized to address fair share methodological
issues in the aftermath of the Court's opinion in In re N.J.A.C.
5:96 II.




                                           5                                      A-3323-15T1
      We granted amicus status to the following entities that

urged us to affirm the order:                Disability Rights New Jersey; the

New Jersey Chapter of the American Planning Association; New

Jersey     Future;    and      the    Housing          and    Community      Development

Network.

      Fair Share Housing Center (Fair Share), New Jersey Builders

Association      (NJBA),       and    Highview         Homes,     L.L.C.      (Highview)

appeared before the court as intervenors and, pursuant to In re

N.J.A.C.    5:96     II,     Fair    Share       participated     as    an    interested

party.      Fair     Share    agrees       that    a    municipality's        affordable

housing obligation for the third-round cycle is comprised of

unmet prior round obligations from 1987 to 1999, present need,

and   prospective      need.         Fair     Share      concedes      that    a     town's

prospective need requires calculations projecting forward ten

years.     Fair Share asserts, however, that prospective need also

requires     a     municipality        to        perform      housing      calculations

retroactively      during     the    gap     period.          Therefore,      Fair    Share

maintains    that     gap-period       housing         need   comprises       part    of    a

town's calculation of its prospective need.                       As a result, Fair

Share defines prospective need differently than those entities

urging us to reverse the order.                     For Fair Share, prospective

need covers a period of twenty-seven years: from 1999 to the

present, and then ten years into the future.                              Thus, to the




                                             6                                     A-3323-15T1
extent a municipality is required to establish its prospective

need from 1999 to the present, and then ten years into the

future,    Fair    Share     urges     us       to          uphold       the    court-imposed

"separate and discrete" gap-period housing obligation.

      The narrow legal issue on appeal is whether a "separate and

discrete" gap-period affordable housing obligation is authorized

by (1) the core principles of the Mount Laurel doctrine, as

codified in the Fair Housing Act of 1985 (FHA), N.J.S.A. 52:27D-

301 to -329; and (2) In re N.J.A.C. 5:96 II.                             Resolution of this

legal question specifically addresses whether a municipality's

prospective     need   involves       a     retroactive                housing       obligation

starting in 1999.      Our focus, therefore, is on the propriety of

the   court's     conclusion    that       such         a       "separate      and   discrete"

obligation is "constitutionally mandated."

      Applying the core principles of the Mount Laurel doctrine

and the plain language of the FHA, including its unambiguous

definition    of   "prospective       need"         —       a    forward       "projection    of

housing    needs     based     on    development                 and     growth      which    is

reasonably    likely   to    occur     in       a    region         or    a    municipality,"

N.J.S.A.   52:27D-304(j)       —     and    following              the     Supreme      Court's

admonition not to become an alternative administrative decision

maker for unresolved policy issues surrounding the Third Round

Rules, we hold that the FHA does not require a municipality to




                                            7                                          A-3323-15T1
retroactively calculate a new "separate and discrete" affordable

housing obligation arising during the gap period.                 Pursuant to

In re N.J.A.C. 5:96 II, "previous methodologies employed in the

First and Second Round Rules should be used to establish present

and prospective statewide and regional affordable housing need,"

and prior round unfulfilled obligations "should be the starting

point   for   a    determination     of     a   municipality's    fair    share

responsibility."         Supra, 221 N.J. at 30 (emphasis added).              As

the Court instructed, subject to the guidelines and principles

it outlined in In re N.J.A.C. 5:96 II, Mount Laurel judges

          may confidently utilize similar discretion
          [used by the Council on Affordable Housing
          (COAH)]   when assessing a town's plan, if
          persuaded that the techniques proposed by a
          town will promote for that municipality and
          region the constitutional goal of creating
          the realistic opportunity for producing its
          fair share of the present and prospective
          need for low- and moderate-income housing.

          [Ibid. (emphasis added).]

We emphasize that under our tripartite system of government, the

imposition    of    a    new   retrospective     calculation,     designed    to

establish affordable housing need during the gap period — a new

methodology       that    essentially       addresses    "unresolved     policy

details of replacement Third Round Rules" — is best left for

consideration      by    the   Legislative      and   Executive   branches    of

government, where public policy issues associated with such an




                                        8                              A-3323-15T1
additional "separate and discrete" obligation can be fairly and

fully debated in the public forum.                             The Legislature may craft

new legislation addressing any gap period between housing cycles

if   that     is   the     course       it    wishes         to    take.     Enforcement      of

subsequent legislation promoting affordable housing needs — and

its effect on a municipality's Mount Laurel obligation — would

still be a matter that may be brought to the courts.

       The judge did not determine whether any of the town's plans

will        satisfy        their        constitutional                  affordable     housing

obligations.          At this point in the litigation, his main legal

concern      was    whether        to    impose          a     "separate      and    discrete"

affordable housing obligation for the gap period, in addition to

a    town's        unmet     prior           round,          present,      and      prospective

obligations.        Having resolved that legal question, the judge may

now determine whether the towns have met their constitutional

goal of creating "[a] realistic opportunity for producing its

fair share of the present and prospective need for low- and

moderate-income housing."                    In re N.J.A.C. 5:96 II, supra, 221

N.J. at 30 (emphasis added).

       We    therefore      reverse          the       order      and   remand   for   further

proceedings.




                                                   9                                   A-3323-15T1
                                         I.

     We begin by reviewing the pertinent principles of the Mount

Laurel doctrine, the enactment of the FHA, the role of COAH, and

the Supreme Court's decision in In re N.J.A.C. 5:96 II.5

     In    Mount    Laurel    I,   the        Supreme    Court     concluded      that

developing municipalities must "presumptively make realistically

possible an appropriate variety and choice of housing" through

land use regulations.        Supra, 67 N.J. at 174.              The Court stated

that such municipalities "cannot foreclose the opportunity of

the classes of people mentioned for low[-] and moderate[-income]

housing and in its regulations must affirmatively afford that

opportunity, at least to the extent of the municipality's fair

share of the present and prospective regional need."                      Ibid.    The

Court determined that land use regulations are encompassed in

the State's police power, required such regulations to "promote

public    health,   safety,    morals     or     the     general    welfare,"      and

concluded "a zoning enactment which is contrary to the general

welfare is invalid."      Id. at 175.

     Approximately eight years later, the Court returned to the

issue.     In   Mount   Laurel     II,   supra,     92    N.J.     158,   the     Court

5
    In general, the Court determined COAH failed to promulgate
valid   Third    Round   Rules,    concluded   that    exhausting
administrative remedies before COAH was therefore no longer
necessary, and established procedures for affordable housing
matters to proceed before designated Mount Laurel judges.



                                         10                                 A-3323-15T1
reaffirmed    the       doctrine    and    fashioned       a    judicial          remedy      for

determining       a     municipality's           constitutional             obligation          to

provide for low- and moderate-income housing.                         In re Adoption of

N.J.A.C. 5:96 and 5:97 by the New Jersey Council on Affordable

Hous., 215 N.J. 578, 587-89 (2013) (In re N.J.A.C. 5:96 I).

Adding teeth to the doctrine, the Court sanctioned a builder's

remedy,     which       permitted     builder-plaintiffs              to        sue    for    the

opportunity       to    construct    housing       at    higher       densities          than   a

municipality would allow.              Id. at 589.              In strengthening the

Mount Laurel doctrine, the Court explained that the core of the

doctrine was a municipality "would satisfy [its] constitutional

obligation by affirmatively affording a realistic opportunity

for   the   construction       of    its    fair       share    of        the    present      and

prospective       regional     need       for    low[-]        and    moderate[-income]

housing."     Mount Laurel II, supra, 92 N.J. at 205.                                 The Court

stated that a realistic opportunity depends on "whether there is

in fact a likelihood — to the extent economic conditions allow —

that the lower income housing will actually be constructed."

Id. at 222.            Although the Court devised a scheme to address

resolution    of       litigation     in    this       field,        it    reiterated         its

preference for legislative action.                      Id. at 212-13.                Two years

later, and in the aftermath of AMG Realty Co. v. Township of

Warren,     207     N.J.    Super.     388,      453     (Law     Div.          1984),       which




                                            11                                         A-3323-15T1
articulated      a       method     for       calculating          affordable      housing

obligations      that         substantially         impacted       the    likelihood      of

whether lower income housing would actually be constructed, the

Legislature enacted the FHA.

     The     FHA     codified           the        core    constitutional          holding

undergirding the Mount Laurel obligation.                         In re N.J.A.C. 5:96

I, supra, 215 N.J. at 584.                The FHA required "reasonable fair

share   housing      guidelines         and    standards."           N.J.S.A.      52:27D-

302(d).     The FHA created COAH, N.J.S.A. 52:27D-305, which was

designed to provide an administrative alternative to litigating

constitutional compliance in exclusionary zoning actions.                             In re

N.J.A.C. 5:96 II, supra, 221 N.J. at 7-8, 11.

     COAH's primary responsibility was to assign and determine

municipal    affordable         housing       obligations.          Id.   at   7   (citing

N.J.S.A. 52:27D-305, -307).               The FHA required COAH to enact and

thereafter      update         regulations          that     established        statewide

affordable      housing        need;    to     assign       an     affordable      housing

obligation to each municipality for its designated region; and

to   identify      the     techniques         available      to     municipalities        in

addressing the assigned obligation.                        Ibid.      (citing N.J.S.A.

52:27D-307, -308).              The criteria and guidelines that the FHA

directed     COAH        to     adopt     were       targeted       for     "[m]unicipal

determination of its present and prospective fair share of the




                                              12                                   A-3323-15T1
housing need in a given region which shall be computed for a

[ten]-year period."          N.J.S.A. 52:27D-307(c)(1).                 The FHA defined

prospective need:

           "Prospective need" means a projection of
           housing needs based on development and
           growth which is reasonably likely to occur
           in a region or a municipality, as the case
           may be, as a result of actual determination
           of   public   and   private   entities.  In
           determining prospective need, consideration
           shall be given to approvals of development
           applications, real property transfers and
           economic projections prepared by the State
           Planning Commission established by sections
           1 through 12 of P.L.1985, c.398 (C.52:18A-
           196 et seq.).

           [N.J.S.A. 52:27D-304(j).]

Although   municipalities            were    free     to    resolve      constitutional

Mount   Laurel      obligations       in     the     courts,      the    FHA    preferred

resolution in an administrative forum.                     In re N.J.A.C. 5:96 II,

supra, 221 N.J. at 4.

    The      FHA        encouraged     and        rewarded       voluntary      municipal

compliance by (1) providing a period of immunity from civil

lawsuits     to     towns     that     participated          in    the     process      for

demonstrating          constitutional        compliance          (the    exhaustion-of-

administrative-remedies             requirement);          and     (2)    providing       a

presumption       of     validity     in     any     later       exclusionary      zoning

litigation        for     municipalities           who     secured       from    COAH     a

substantive       fair     housing     plan       certification.           Ibid.        The




                                             13                                  A-3323-15T1
viability of these provisions was subject to COAH's updating of

housing    obligations,        as     well       as     related       substantive       and

procedural rules.      Ibid.

    In     1986,     COAH     began       adopting        rules       delineating       the

affordable       housing    obligations          of     municipalities.           In     re

Adoption   of     N.J.A.C.     5:94       and    5:95     by    the    N.J.     Coal.    on

Affordable Hous., 390 N.J. Super. 1, 23 (App. Div.), certif.

denied, 192 N.J. 71 (2007) (In re N.J.A.C. 5:94).                         COAH adopted

rules covering the periods of 1987 to 1993 — the First Round

Rules — and 1993 to 1999 — the Second Round Rules.                                    In re

N.J.A.C. 5:96 I, supra, 215 N.J. at 590.                       These rules generally

utilized     a    methodology       for     calculating         affordable       housing

obligations      employed    before       the    Legislature      enacted       the    FHA.

Ibid.

    In the First Round Rules, COAH defined present need as "the

total number of deficient housing units occupied by low[-] or

moderate[-income]      households          as    of     July    1,     1987."         Ibid.

(quoting   N.J.A.C.        5:92-1.3).           COAH    used    several       factors    to

establish present need, such as "overcrowding, age of unit, and

lack of plumbing, kitchen or heating facilities as indicators of

dilapidated housing."         Id. at 590-91.

    The    First     Round     Rules      also        incorporated      the     statutory

definition of prospective need as "a projection of low[-] and




                                           14                                    A-3323-15T1
moderate[-income] housing needs based on development and growth

. . . reasonably likely to occur in a region or a municipality."

Id.     at    591     (quoting          N.J.A.C.       5:92-1.3).             COAH    analyzed

statistics to project forward the number of "'low- and moderate-

income       households'      that       would       form    between     1987    and       1993."

Ibid.        (quoting       N.J.A.C.       5:92,       Appendix     A    at    92-49).         In

determining         prospective         need,    COAH       considered    such       things   as

municipalities'            "approvals      of    development          applications,         real

property      transfers       and       economic      projections        prepared      by     the

State Planning Commission."                Ibid.       (quoting N.J.A.C. 5:92-1.3).

      For      the     Second           Round    Rules,        COAH      used        the    same

methodologies employed in the First Round Rules.                                Id. at 592.

COAH also adopted additional regulations granting credits and

various       adjustments          to     reduce       municipalities'          fair        share

figures.       Ibid.        (summarizing the adopted regulations granting

credits and adjustments).                 Various legal challenges to the First

and Second Round Rules failed.                   Ibid.

      Essentially, the methodology of allocating municipalities'

affordable      housing       obligations            largely    followed       the    remedial

approaches established by Mount Laurel II and AMG Realty.                                     Id.

at 593.       COAH first calculated the need for affordable housing

in    each     of    the     State's       regions,          then   allocated         to     each

municipality         its    fair    share       of    the     present    and     prospective




                                                15                                     A-3323-15T1
regional      need.         Ibid.      A   municipality    would     be     assigned       a

proportionate fair share of the region's housing need based on

economic projections and its capacity to accommodate affordable

housing.       Ibid.        A municipality would subject itself to the

possibility     of     defending       a   builder's     remedy     challenge       if    it

failed   to    create       a   realistic      opportunity    for    satisfying          its

assigned share.         Ibid.

      Although        the    Second    Round     Rules   expired     in     1999,    COAH

belatedly promulgated its first iteration of the Third Round

Rules in 2004.6         Ibid.       The rule proposal published in the New

Jersey Register explained that a municipality's fair share for

the   period     from        1987     through    January     1,     2014,    would        be

calculated using three criteria:

              (1) a municipality's "rehabilitation share"
              based on the condition of housing revealed
              in the data gathered for the 2000 Census,
              previously    known  as   a   municipality's
              indigenous   need;   (2)   a  municipality's
              unsatisfied prior round obligation (1987
              through 1999), satisfaction of which will be
              governed by the second round rules; and (3)
              a municipality's "growth share" based on
              housing need generated by statewide job
              growth and residential growth from 1999
              through 2014.

6
     We characterized this delay as "dramatic," "inexplicable,"
and frustrating the public policies embodied by the Mount Laurel
line of cases.   In re Six Month Extension of N.J.A.C. 5:91 et
seq., 372 N.J. Super. 61, 95-96 (App. Div. 2004) (In re Six
Month), certif. denied, 182 N.J. 630 (2005).




                                            16                                  A-3323-15T1
          [Id. at 593-94 (quoting In re N.J.A.C. 5:94,
          supra, 390 N.J. Super. at 27).]

    During     the   gap   period,   we   considered   challenges   to    the

validity of the Third Round Rules and remanded the matter to

COAH on two occasions with instructions to adopt revised Third

Round Rules.

    Our first remand to COAH with instructions to adopt revised

rules occurred in 2007.        In re N.J.A.C. 5:94, supra, 390 N.J.

Super. at 47.    At that time, we sustained some but rejected many

of the challenges to the first iteration of the Third Round

Rules.   Importantly, Judge Mary Catherine Cuff, writing for the

panel, noted that "municipalities are responsible for fulfilling

their prior round obligation."        Id. at 28 (citing N.J.A.C. 5:94-

2.1(a)(2)).

               Judge      Cuff's     opinion      rejected
                     [7]
          appellants'         arguments      that      the
          "rehabilitation share" of a municipality's
          affordable    housing   obligation,   sometimes
          also referred to as present need, should
          include "cost burdened" low- and moderate-
          income households that reside in standard
          housing and households that lack permanent
          housing or live in overcrowded housing; that
          COAH's     methodology      for     identifying
          substandard    housing   was   "arbitrary    and
          unreasonable"; that the [T]hird [R]ound

7
    The appellants challenged the validity of COAH's substantive
rules for the third round that calculated affordable housing
needs from 1999 to 2014, as well as the validity of several
regulations.



                                     17                             A-3323-15T1
[R]ules improperly eliminated the part of
the first and second round methodologies
that required reallocation of excess present
need in poor urban municipalities to other
municipalities in the region; that the use
of   regional   contribution   agreements   to
satisfy part of a municipality's affordable
housing   obligations   violates   the   Mount
Laurel   doctrine   and   federal  and   state
statutory provisions; that the allowance of
bonus credits towards satisfaction of a
municipality's        affordable       housing
obligations unconstitutionally dilutes those
obligations; and that the rule relating to
vacant land adjustments violates the Mount
Laurel doctrine and the FHA.

     However,       Judge     Cuff's     opinion
invalidated    the    parts  of    the  original
[T]hird    [R]ound     [R]ules    that   reduced
statewide and regional affordable housing
need based on "filtering"; adopted a growth
share    approach       for     determining    a
municipality's fair share of prospective
needs for affordable housing and excluded
job growth resulting from rehabilitation and
redevelopment in determining job growth;
compelled developers to construct affordable
housing without any compensating benefits;
authorized    a    municipality     to  give   a
developer the option of payment of a fee in
lieu of constructing affordable housing, but
provided no standards for setting those
fees; and authorized a municipality to
restrict up to 50% of newly constructed
affordable    housing     to   households   with
residents aged fifty-five or over.

[In re Adoption of N.J.A.C. 5:96 and 5:97 by
the N.J. Coal. on Affordable Hous., 416 N.J.
Super.   462,   475-76   (App.   Div.  2010)
(emphasis added) (citations omitted), aff'd
as modified, 215 N.J. 578 (2013).]




                      18                           A-3323-15T1
       In   2010,   Judge      Stephen     Skillman,       also     writing      for     a

different     panel,    invalidated        a    substantial        portion      of     the

revised     Third      Round     Rules,        including     the     growth          share

methodology used by COAH, id. at 511-12; regulations concerning

the preparation of fair share plans, id. at 487-88; presumptive

incentives    embodied      in   the     regulations,       id.    at    488-93;       and

regulations concerning rental credits, id. at 493-95.

       Judge Skillman upheld several of the regulations, however,

such as the elimination of reallocated present need, id. at 500-

02     (reasoning   COAH       possessed       the   authority       to    focus        on

municipalities' own obligations, see N.J.A.C. 5:97-2.4, rather

than     reallocating       excess      present      need     away       from        those

overburdened with substantial housing); and COAH's decision to

use the prior round obligations without updating the obligations

based on actual household growth, id. at 498-500.                       Consequently,

we redirected COAH to adopt new rules.

       During the gap period, the New Jersey Supreme Court also

invalidated revised Third Round Rules and issued deadlines for

COAH to adopt new regulations.                 In re N.J.A.C. 5:96 I, supra,

215 N.J. at 619-20.            Acknowledging the FHA had set a course

tracking     the    Mount      Laurel     II     allocation       methodology          for

satisfaction of present and prospective need, the Court remarked

that "the Third Round Rules' validity hinges in whether they are




                                          19                                    A-3323-15T1
consistent with the FHA."       Id. at 612-17.            In 2014, the Court

granted COAH an additional five months to adopt new rules.                         In

re N.J.A.C. 5:96 and 5:97, 220 N.J. 355, 355-56 (2014).

      COAH failed to meet the extension deadline, which led the

Court to grant Fair Share's motion in aid of litigants' rights

in In re N.J.A.C. 5:96 II, supra, 221 N.J. at 5-6.                    The Court

recognized the administrative process had become nonfunctioning.

Id.   at   5.    As   a   result,    the      FHA's    exhaustion-of-remedies

requirement had been rendered futile.                 Ibid.    Therefore, there

no longer existed a legitimate basis to block access to the

courts     for    resolution        of        municipal       compliance       with

constitutional    affordable   housing.           Ibid.       Recognizing     there

existed various stages of municipal preparation during the gap

period,    the   Court    established         a   transitional     process       for

exclusionary zoning actions to proceed.                Ibid.     The Court also

emphasized:

                 Importantly, nothing herein should be
            understood to prevent COAH from fulfilling
            its     statutory     mission      to     adopt
            constitutional      rules       to       govern
            municipalities' Third Round obligations in
            compliance with the FHA.      Nor should the
            action taken by this Court, in the face of
            COAH's failure to fulfill its statutory
            mission,   be   regarded   as   impeding    the
            Legislature   from   considering    alternative
            statutory remedies to the present FHA.

            [Id. at 6 (citation omitted).]




                                         20                                A-3323-15T1
       The Court developed a process which tracked the processes

provided for in the FHA.           Id. at 29.        It did so to facilitate a

return to agency proceedings in the event COAH promulgated new

Third   Round    Rules.     Ibid.      In      establishing     the   process   for

exclusionary zoning actions to proceed, the Court stated:

              [I]t is not this Court's province to create
              an     alternate     form    of     statewide
              administrative decision maker for unresolved
              policy details of replacement Third Round
              Rules . . . .     The courts that will hear
              such declaratory judgment applications or
              constitutional compliance challenges will
              judge them on the merits of the records
              developed in individual actions before the
              courts.   However, certain guidelines can be
              gleaned from the past and can provide
              assistance to the designated Mount Laurel
              judges in the vicinages.

              [Id. at 29-30 (emphasis added).]

The   Supreme    Court    established       procedures    for      addressing   two

classes of municipalities that were stranded by COAH's inability

to adopt valid Third Round Rules.                Id. at 24-29 (outlining the

procedures for municipalities that "made the effort to comply

promptly with the Third Round Rules and . . . received a grant

of    substantive    certification,"           and   municipalities      that   had

"participating" status with COAH).

       Although presented with numerous opportunities to do so, at

no    point   did   the   Court,    the     Legislature,      or   the   Appellate

Division impose an additional separate gap-period obligation.




                                          21                              A-3323-15T1
Rather, in establishing a municipality's fair share affordable

housing obligation, the focus consistently remained on present

and prospective housing need.

                                     II.

    We    now    turn   to   the   proceedings      conducted      by   the     judge

leading to his ruling that municipalities are "constitutionally

mandated" to address the gap period as a "separate and discrete"

component of their fair share Mount Laurel obligation.

    Following the procedures established by the Court in In re

N.J.A.C. 5:96 II, supra, 221 N.J. at 21-34, several Ocean County

municipalities       filed    declaratory      judgment       actions         seeking

resolution      of   their   Mount   Laurel        obligations.         The     judge

undertook preliminarily to determine the present and prospective

affordable housing needs of the municipalities.                    To reach this

determination, the court reviewed several expert reports that

expressed differing opinions on the subject.

    The    judge     appointed     Richard    B.    Reading   as    the       Special

Regional Master, who was to "assist the court in making the

preliminary determination envisioned by the Supreme Court of the

present and prospective needs."              The judge allowed submissions

of expert reports and expected to conduct a plenary hearing at

which the court would address the conflicting expert opinions as




                                      22                                  A-3323-15T1
to   the    methodology      for     calculating     the   municipalities'

affordable housing obligations.

     On    December    29,   2015,   Mr.   Reading   submitted   a    report

entitled     "COAH's      Un[-]adopted      Third     Round   Methodology

Calculation of 'Gap' Period Housing Needs."           In this report, Mr.

Reading listed these questions the judge identified in a case

management order:

            1) Is the methodology provided in Appendix
            D[8] of the current iteration of the [un-
            adopted] Third Round Rules an appropriate
            and correct methodology?

            2) Do the trial courts have the authority to
            require a municipality to address the . . .
            'gap' obligation component as part of a
            municipality's prior obligation?[9]

     Mr. Reading concluded that the "methodology in Appendix D

[did] not follow the methodologies utilized in the calculation

of affordable housing needs employed in the [p]rior [r]ounds."

He stated that "[a] review of the history of Mount Laurel did

not disclose a methodology that expanded the calculation of fair

share beyond [p]resent and [p]rospective [n]eed."             He remarked

that Sections 304 and 307 of the FHA established "prospective


8
    Mr. Reading identified the un-adopted Third Round Rules as
N.J.A.C. 5:99, Appendix D.
9
    The third question, "[w]hat is the proper allocation of the
1000 unit cap . . . [and] how should the gap be applied to any
'gap period' need if one exists," is not at issue.



                                      23                             A-3323-15T1
need as a period of ten years and includes a projection of

housing   needs   based    upon   development         and   growth    that    is

reasonably likely to occur."         He determined that the "inclusion

of the prior [gap period] within prospective need is contrary to

prior round methodologies, the language of the FHA and history

of determining affordable housing needs."               As to "identifying

and   quantifying"   the   housing     need   from    the   gap   period,    Mr.

Reading stated:

           [The unmet need arising during the gap
           period] was discussed in terms of the
           disposition of [low- and moderate-income]
           housing needs that existed . . . in the
           past.    These households would be partially
           included by the [low- and moderate-income]
           households in over[]crowded or deficient
           housing units that are encompassed in the
           new calculation of [p]resent [n]eed.     Those
           [low- and moderate-income] households that
           have occupied sound (non-deficient) housing
           units are already [in] housing and would not
           represent an identifiable need.     Some [low-
           and    moderate-income]    households   formed
           during    the  gap   period   may   no  longer
           represent an affordable housing need due to
           a   variety   of   reasons   including  death,
           changes in income, increase or decrease in
           household size, retirement and/or relocation
           outside of New Jersey. . . .       Although it
           may be possible to generate an estimate of
           such a residual need, such an estimate would
           be speculative.

           [(Emphasis added).]

Mr.   Reading   stated   "there   is    a   uniform    consensus     among   the

interested parties that the methodology provided in Appendix D




                                       24                              A-3323-15T1
is   not    an     appropriate       and      correct      methodology         for       the

calculation       of    affordable      housing     [gap-period]        needs."            He

explained further that even though there existed this consensus

rejecting     COAH's          un-adopted      methodology,        "an        appropriate

methodology for determining an affordable housing need [during

the 1999-2015 'gap period' was] not . . . presented."10

     On February 17, 2016, Mr. Reading issued a report entitled

"Bridging   the        Gap,   1999-2015     'Gap'   Period    Affordable           Housing

Needs."      In    this       report,   Mr.      Reading    responded         to    expert

opinions contained in reports submitted by Dr. David N. Kinsey,

on behalf of Fair Share, and Econsult.                     After reviewing these

opinions, Mr. Reading recommended to the judge that he "consider

the inclusion of the [g]ap[-p]eriod, calculated distinctly and

separately from [p]resent and [p]rospective [n]eed," which is a

markedly    different          recommendation       than     what       he    expressed

previously.

     Mr. Reading stated Dr. Kinsey provided two alternatives for

calculating      affordable       housing       needs   arising     during         the   gap


10
     Mr. Reading acknowledged, in a later report, Fair Share's
contention that the gap-period should be included "within the
extended 1999-2025 [p]rospective [n]eed."    He also considered
the NJLM and a report prepared by Econsult Solutions (Econsult),
on behalf of a consortium of municipalities, stating there is no
basis for "retrospective analysis of housing need, which has
always been based on 'present and prospective need.'" (Emphasis
added).



                                           25                                      A-3323-15T1
period:    calculating    the      entire      period    from    1999-2025     as   a

prospective need, without a separation of the gap period and

prospective     need    projection;         and    replicating      COAH's     1994

recalculation    of    the   1987-1993         housing    need     (although    Mr.

Reading recognized that such a recalculation was done to adjust

a prior (1987-1993) obligation, not to establish a methodology

for addressing a lapse in assigned obligations).

    Econsult      provided         a     comprehensive          methodology     for

establishing    the    1987-1999       prior    round   obligations,    the    2015

present need, and the 2015-2025 prospective need.                      Econsult's

methodology did not include calculations for the gap period.

Econsult critiqued Dr. Kinsey's two alternatives.                      As to the

first   alternative,     Econsult       maintained      essentially    that    gap-

period low- and moderate-income households living in deficient

housing would be encompassed in present need, while low- and

moderate-income households living in adequate housing would not

represent an identifiable need.                As to the second alternative,

Econsult    reiterated       its       positon    that     present     need     and

prospective need combine to represent the entire fair share need

of, in its opinion, Dr. Kinsey's calculation of retrospective or

gap-period needs.

    In his February 17, 2016 report, Mr. Reading stated that

the gap-period issue had become a legal issue.                   He acknowledged




                                         26                              A-3323-15T1
that all parties agreed low- and moderate-income households were

formed during the gap period and have secured housing, some of

which were deficient or overcrowded, which would be reflected in

present need.    As to the proper methodology for calculating

municipalities' affordable housing need arising during the gap

period, he concluded:

         The calculation of the current needs of the
         affordable hous[ing] formed during the [gap
         period] is not a process that is [e]mbedded
         in the [p]rior [r]ound methodology, [and] is
         not projected ([p]rospective) need, but
         should be undertaken as a separate and
         discrete component of affordable housing
         need.   Prior submissions provided by [Fair
         Share] and Econsult on December 8, 2015
         contended that the calculation for the [g]ap
         [p]eriod   affordable  housing   needs   were
         unnecessary because they were properly a
         part of the 1999-2025 [p]rospective [n]eed
         . . . or were unnecessary altogether because
         the FHA does not make any provision for a
         retrospective need . . . .

                . . . .

         Assertions that a determination of [g]ap
         [p]eriod affordable housing need cannot be
         reduced    to    a    precise    mathematical
         calculation devoid of all assumptions and
         estimates is not distinctly different than
         the preparation of estimates for . . .
         [p]resent . . . and [p]rospective [n]eed[,]
         [which]   are   likewise    predicated   upon
         estimates [and] . . . would . . . be no more
         impaired.

As a result, Mr. Reading recommended the court should sanction a

completely new and different methodology than that used during




                               27                        A-3323-15T1
the   first    two    rounds    or   in    the    FHA,   one   that     "should     be

calculated as [a] separate and discrete component of affordable

housing   need     utilizing     data     and    procedures    appropriate     to   a

prior,    rather      than     future     period."       In    other    words,      he

recommended a methodology that retrospectively calculated gap-

period housing need, rather than, as he stated in his December

29,   2015    report,    the     unmet     gap-period    housing       needs   being

included in "the new calculation of present need."

      The next day, on February 18, 2016, the court adopted Mr.

Reading's new recommendation and issued its opinion.                     As to the

gap period, the court stated:

              The    court    finds   municipalities    are
              constitutionally mandated to address [the
              gap-period] obligation.    This "gap period"
              need is to be calculated as a separate and
              discrete component of a municipality's fair
              share    obligation.      This   component[,]
              together with a municipality's unmet prior
              round obligations [from] 1987 to 1999[,] and
              its present need and prospective need[,]
              shall comprise its "fair share" affordable
              housing obligation for the third [round]
              housing cycle.

                     . . . .

                   [I]t is ironic that both parties (or
              interests) appearing in [a] 2004 Appellate
              Division case are now advancing arguments
              before this court [that] they vehemently
              opposed in [In re Six Month].

                     . . . .




                                          28                               A-3323-15T1
                 Even   if    the    municipalities  were
            [therefore]    not    [now]    estopped  from
            advancing their position[,] and despite
            their efforts here to distinguish . . . [In
            re Six Month] . . . the court finds the
            underlying principles in [In re Six Month]
            . . . are the same as the matter here.

            [(Emphasis added).]
                                      III.

    On appeal, the entities urging us to reverse the order

argue that the judge erroneously imposed a new "separate and

discrete" component of a municipality's fair share affordable

housing obligation during the gap period.                     They contend the

judge erred by: (1) failing to apply the plain language of the

FHA; (2) ignoring the guidelines and principles established by

In re N.J.A.C. 5:96 II; (3) applying the doctrine of judicial

estoppel; and (4) acting as a replacement agency for COAH by

resolving unresolved policy details of replacement Third Round

Rules.

    They     assert     that   a   municipality's     fair    share   affordable

housing obligation for the third-round cycle is comprised of:

(1) the unmet prior round (before 1999) obligations; (2) present

need; and (3) prospective need.              They maintain, as Mr. Reading

expressed    in   his    December    29,     2015   report,    that   gap-period

affordable    housing      needs     would     be   captured     in   a    town's

calculation of its present need.             They emphasize that imposing a

retrospective     gap-period       obligation       does   not   allow     for     a



                                       29                                 A-3323-15T1
realistic       opportunity       that        the     lower       income       housing      will

actually be constructed.

       The entities urging us to affirm the order under review

argue     primarily       that:     (1)        a     municipality's            prior        round

unfulfilled      affordable       housing           obligations         includes      the    gap

period;    (2)    the     FHA,    as     determined          by    COAH,       provides      for

cumulative and uninterrupted calculations of prospective need;

(3)    COAH's    interpretation          of    the     FHA    providing         for    gapless

affordable      housing    need     is    reasonable;             and    (4)    the    judge's

ruling complies with the FHA and In re N.J.A.C. 5:96 II.

       Our standard of review is well settled.                          The sole question

on    appeal,    whether    a     retrospective          gap-period         obligation         is

authorized by the core principles of the Mount Laurel doctrine,

as codified in the FHA, and In re N.J.A.C. 5:96 II, is a legal

issue not entitled to any special deference.                            Manalapan Realty,

L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

                                              IV.

       Applying the plain language of the FHA, the guidelines and

principles established by In re N.J.A.C. 5:96 II, and respecting

the separation of powers doctrine,11 we conclude that the judge




11
     The framers of the New Jersey Constitution articulated the
separation of powers doctrine expressing that

                                                                                 (continued)


                                              30                                       A-3323-15T1
erroneously imposed a requirement that a municipality undertake

a   new,   "separate   and   discrete"    gap-period   calculation    –    in

addition    to   unmet   prior    round    obligations,    present,       and

prospective needs – to establish a municipality's fair share

affordable housing obligation.           We also reject the contention

that judicial estoppel precludes reversal of the February 18,

2016 order under review.

                                  A.

      We start with the plain language of the FHA.         Our paramount

goal in interpreting a statute is to ascertain the Legislature's

intent, and "generally[] the best indicator of that intent is

the statutory language."       DiProspero v. Penn, 183 N.J. 477, 492

(2005) (citation omitted).       When interpreting a statute, we give

words "their ordinary meaning and significance."              Tumpson v.

Farina, 218 N.J. 450, 467 (2014) (quoting DiProspero, supra, 183

N.J. at 492).    Only when the statutory language is ambiguous and

yields more than one plausible interpretation do we turn to


(continued)
          [t]he powers of the government shall be
          divided among three distinct branches, the
          legislative, executive, and judicial. No
          person   or    persons  belonging   to   or
          constituting one branch shall exercise any
          of the powers properly belonging to either
          of the others, except as expressly provided
          in this Constitution.

            [N.J. Const., art. III, ¶ 1.]



                                    31                           A-3323-15T1
extrinsic      sources,          such    as    legislative      history.         DiProspero,

supra, 183 N.J. at 492-93.                 Here, there is no ambiguity.

       The     plain        language      of    the    FHA     refers    to    present    and

prospective need.                Responding to the significantly high fair

share     obligations            in     the     aftermath       of     AMG     Realty,    the

Legislature enacted the FHA, finding that one of the "essential

ingredients"           to       its     response       was    "the      establishment      of

reasonable           fair    share       housing       guidelines        and     standards."

N.J.S.A. 52:27D-302(d).                  Consequently, the Legislature focused

on    present       and     prospective        need,    N.J.S.A.       52:27D-307(b),     and

charged COAH to adopt guidelines for "[m]unicipal determination

of its present and prospective fair share of the housing need in

a given region which shall be computed for a 10-year period,"

N.J.S.A. 52:27D-307(c)(1) (emphasis added).

       The FHA defines prospective need not by looking backwards,

but     rather        as    a     "projection         of     housing     needs    based    on

development and growth which is reasonably likely to occur in a

region    or     a    municipality."            N.J.S.A.       52:27D-304(j)       (emphasis

added).        In determining prospective need, COAH considered such

things         as         municipalities'             "approvals        of       development

applications, real property transfers and economic projections

prepared by the State Planning Commission."                          In re N.J.A.C. 5:96

I, supra, 215 N.J. at 591 (quoting N.J.A.C. 5:92-1.3).




                                                32                                  A-3323-15T1
      The FHA did not define present need, but in the valid First

Round Rules, COAH defined present need as "the total number of

deficient housing units occupied by low[-] or moderate[-income]

households."       Id. at 590 (quoting N.J.A.C. 5:92-1.3).                   COAH used

several      factors        to      establish       present        need,     such       as

"overcrowding, age of unit, and lack of plumbing, kitchen or

heating facilities as indicators of dilapidated housing."                              Id.

at 590-91.

      The    judge     noted        that    COAH,     in    each     of    its      three

unsuccessful       attempts         to     promulgate       Third     Round       Rules,

referenced    the     gap     period,      albeit    with   different      unapproved

methodologies.        Although the judge acknowledged COAH's reference

to the gap period during its three iterations of the un-adopted

Third Round Rules, we note that an agency is not at liberty to

impose additional requirements onto a statute that do not exist

on its face.       See In re N.J.A.C. 5:96 I, supra, 215 N.J. at 614-

15 (invalidating the growth share methodology in the Third Round

Rules and explaining that COAH may not enact regulations plainly

at   odds   with     the    FHA);    see   also     Oberhand   v.    Dir.,    Div.      of

Taxation,      193         N.J.     558,     568     (2008)        (explaining         "an

administrative agency's interpretation will not be followed when

the agency extends a statute 'to give it a greater effect than

its language permits'" (quoting GE Solid State v. Dir., Div. of




                                            33                                   A-3323-15T1
Taxation, 132 N.J. 298, 306 (1993))); Fedders Fin. Corp. v.

Dir., Div. of Taxation, 96 N.J. 376, 392 (1984) (stating "[i]t

is   well     established    that   [an    agency's]    regulatory     authority

cannot go beyond the Legislature's intent as expressed in the

statute"); Serv. Armament Co. v. Hyland, 70 N.J. 550, 563 (1976)

(explaining "an administrative interpretation which attempts to

add to a statute something which is not there can furnish no

sustenance to the enactment").                 To the extent COAH interpreted

the FHA to include a requirement beyond present and prospective

need and fulfilling prior round obligations, we conclude such an

interpretation is "at odds with the plain meaning of the [FHA]."

Oberhand, supra, 193 N.J. at 568.               The same proscription applies

to the courts.

       Importantly,       during    the    sixteen-year     gap     period,     the

Legislature amended the FHA twelve times.                It did not amend the

FHA, however, to require a retrospective determination of gap-

period obligations.         Failure to so amend the FHA does not amount

to     Legislative      authorization     to     retroactively    adopt    a    new

methodology for calculating affordable housing gap-period needs,

even     if    COAH's     un-adopted      Third     Round   Rules    sought      to

encapsulate the gap period.          See GE Solid State, supra, 132 N.J.

at 312-13 (rejecting that the Legislature's failure to interfere

with an administrative interpretation is proof that the agency's




                                          34                              A-3323-15T1
interpretation conforms with legislative intent or establishes

legislative acquiescence); see also Airwork Serv. Div., Div. of

Pac. Airmotive Corp. v. Dir., Div. of Taxation, 97 N.J. 290, 296

(1984)    (explaining          that    administrative             acquiescence        is     only

relevant      when      "the    Legislature's          intent      cannot        otherwise     be

determined by a critical examination of the purposes, policies,

and language of the enactment" (emphasis added)).

       Fair        Share,      supported          by        Dr.        Kinsey,     interprets

"prospective need" to mean that a town is required to look at

affordable housing needs prospectively starting from 1999, in

addition      to    a   separate      ten-year         prospective        need    calculation

from the present.              In other words, Fair Share argues a town's

"prospective need" would cover a period of twenty-seven years,

from     1999      to   ten    years       from      now.         We    conclude      such     an

interpretation is clearly at odds with the FHA's unambiguous

definition of prospective need.                      As it is defined in the FHA,

prospective        need     refers    to    a     "projection"          of   growth    in     the

future,       namely      a    "projection           of     housing       needs     based      on

development and growth which is reasonably likely to occur in a

region or a municipality."                 By its nature, it does not involve

retrospectively including a gap-period calculation.

       In sum, to impose a gap-period requirement would inevitably

add a new requirement not previously recognized under the FHA.




                                                35                                    A-3323-15T1
The     Supreme        Court    has       cautioned          courts    not     to   become     a

replacement agency for COAH in promulgating substantive rules.

Rather, based on COAH's inaction, courts must work within the

provisions of the FHA and should employ the first and second

round    methodologies          to     determine        a     municipality's        compliance

with its Mount Laurel obligations.                            Until COAH adopts Third

Round Rules, or until the Legislature acts, the courts may not

act as a legislature by imposing new, substantive obligations

not recognized under the FHA.

                                                B.

      Next, the judge did not follow the guidelines established

by the Court in In re N.J.A.C. 5:96 II.                               We will address the

relief     requested       in     In       re    N.J.A.C.       5:96     II,    the    Court's

response, and then our application of the guidelines to the

judge's ruling.

                                                (i)

      In In re N.J.A.C. 5:96 II, Fair Share, the NJBA, the NJLM,

and various towns expressed their respective positions as to the

guidance        they     believed         the        Court    should     provide      to     the

designated       Mount     Laurel         judges.        We    briefly    summarize        these

competing positions to emphasize the Court's unwillingness to

decide    "unresolved          policy      details       of    replacement      Third      Round

Rules"     or     to     become       a    "replacement          agency      for    COAH"     by




                                                 36                                   A-3323-15T1
essentially   endorsing   a   new   methodology    for   separately     and

discretely calculating affordable housing needs during the gap

period.

          [Fair Share] ask[ed] that the second-round
          methodology, with limited modifications, be
          directed    for    use    in    such   [remand]
          proceedings    and   that    newly   authorized
          judicial actions proceed expeditiously and
          on    a    notice-and-opportunity-to-be-heard
          basis.

               . . . .

               . . . [NJBA] contend[ed] that the
          administrative   stalemate    ha[d]   permitted
          municipalities to "shelter themselves" from
          suit   under   COAH's   jurisdiction    without
          providing any additional affordable housing
          in years. They urge[d] the Court to fashion
          relief   that   [would]   require   courts   to
          examine what towns have done to date in
          attempting to satisfy their constitutional
          obligations.

               . . . .

          [Various   towns]   contend[ed]   that   trial
          courts would be tasked with determining
          whether    a   municipality's    fair    share
          allocation    will    be    "cumulative"    or
          applicable only to one compliance period.
          The[y] also contend[ed] that adjudicating
          such Mount Laurel matters would require
          courts to confront the myriad differences
          between the methodologies utilized in the
          prior rounds and those contained in the
          various iterations of COAH's Third Round
          Rules.

               . . . .

               [NJLM]    argue[d]          that     the     314
          municipalities   [which        had    submitted    to



                                    37                            A-3323-15T1
          COAH's substantive certification under the
          earlier   Third   Round   Rules]  should   not
          forfeit    their    protection   from    suit.
          According   to   NJLM,   exclusionary   zoning
          litigation would punish the municipalities,
          which [were] not responsible for COAH's most
          recent failure to adopt compliant Third
          Round Rules.

               Notably, NJLM propose[d] an alternate
          solution, arguing that COAH ha[d] expended
          significant resources in developing the most
          recent proposed regulations, which efforts
          should not be wasted. NJLM suggest[ed] that
          the Court appoint "a former high-ranking
          policy-making official" to recruit three
          "professional    planners"   to   assist   in
          reviewing COAH's proposed Third Round Rules,
          the 3000 public comments, and any responses
          prepared by COAH's staff.     NJLM propose[d]
          that this Court authorize those planners to
          revise the proposed Third Round Rules for
          review by the Court-selected "policy-making
          official."      If   the   policy  maker   is
          satisfied, NJLM further propose[d] that he
          or she would present the revised regulations
          to this Court for approval, and for entry of
          an order directing COAH to adopt the Third
          Round Rules in that form.

          [In re N.J.A.C. 5:96 II, supra, 221 N.J. at
          12-16 (emphasis added).]

The Court responded to Fair Share's plea for guidance and, in

light of the various stages of municipal preparation that had

existed   "as    a     result   of   the   long     period        of    uncertainty

attributable to COAH's failure to promulgate Third Round Rules,"

the   Court     devised    a    transitional      process        before     allowing

exclusionary     zoning    actions    to   proceed.         Id.        at   20.      In

articulating     the   transitional    process,     and     by    expressing       the



                                      38                                     A-3323-15T1
concomitant "guidelines . . . gleaned from the past [that] can

provide assistance to the designated Mount Laurel judges," id.

at 29-30, the Supreme Court did not include a new methodology

for calculating additional housing obligations during the gap

period.    In    our    view,   consideration       of   imposing   such     a   new

policy — that essentially addresses "unresolved policy details

of replacement Third Round Rules" — is best left to the other

two branches, where important public policy considerations can

be fairly, fully, and openly debated.

                                    (ii)

      We now address the actual guidelines and principles listed

by the Court for use by designated Mount Laurel judges handling

declaratory     judgment     applications    on     constitutional-compliance

applications.          In   enumerating     these    guidelines,     the      Court

reiterated it did not intend to punish the towns that were "in a

position of unfortunate uncertainty due to COAH's failure to

maintain the viability of the administrative remedy."                       Id. at

23.   Instead, the Court explained:

          Our goal is to establish an avenue by which
          towns can demonstrate their constitutional
          compliance [i.e., present and prospective
          obligations]    to   the    courts    through
          submission of a housing plan and use of
          processes,   where  appropriate,   that   are
          similar to those which would have been
          available through COAH for the achievement
          of    substantive    certification.     Those
          processes include conciliation, mediation,



                                      39                                   A-3323-15T1
            and the use, when necessary, of special
            masters.   The end result of the processes
            employed by the courts is to achieve
            adoption of a municipal housing element and
            implementing   ordinances   deemed  to   be
            presumptively valid if thereafter subjected
            to challenge by third parties.

            [Id. at 23-24 (emphasis added).]

The Court then identified specific procedures, guidelines, and

principles.

    In   In    re    N.J.A.C.         5:96    II,    the     Court    reasserted      that

"previous methodologies employed in the First and Second Round

Rules   should      be    used       to   establish        present    and   prospective

statewide and regional affordable housing need."                              Id. at 30

(emphasis added).          As a result, municipalities were required to

demonstrate    to        the   court      computations        of    housing    need    and

municipal   obligations          "based      on    those     methodologies."       Ibid.

(emphasis   added).            The    Court       reminded    the    designated       Mount

Laurel judges they had the same discretion that COAH enjoyed

when "assessing a town's plan, if persuaded that the techniques

proposed by a town will promote for that municipality and region

the constitutional goal of creating the realistic opportunity

for producing its fair share of the present and prospective need

for low- and moderate-income housing."                     Ibid.     (emphasis added).

    Importantly, the Court did not eradicate the prior round

obligations.     Ibid.         Instead, the Court stated "municipalities




                                              40                                A-3323-15T1
are   expected     to    fulfill        those       obligations.        As   such,     prior

unfulfilled housing obligations should be the starting point for

a determination of a municipality's fair share responsibility."

Ibid.       In reaching this conclusion, the Court cited Judge Cuff's

recognition that "municipalities are responsible for fulfilling

their prior round obligation," In re N.J.A.C. 5:94, supra, 390

N.J. Super. at 28, and Judge Skillman's approval, as a starting

point, for the imposition of "the same prior round obligations

[COAH] had established as the second round obligations in 1993,"

In re N.J.A.C. 5:96, supra, 416 N.J. Super. at 498-500.

          Fulfilling    prior   round         obligations,      as   described       by   the

Court and in our 2007 and 2010 remand opinions, is decidedly

different      than     imposing    a     new,       retrospective,      "separate        and

discrete"       methodology        for        establishing       affordable         housing

obligations during the gap period.                        A court-imposed "separate

and discrete" retrospective gap-period calculation, on top of a

town's       existing     and    present            and    prospective       fair      share

affordable housing obligations, would amount to the Court acting

as    a    replacement    agency        for    COAH,      and   would   contravene        the

Court's       unwillingness        to     decide          unresolved     policy      issues

relating to replacement Third Round Rules.

          In addition to this assistance, the Court identified other

principles that Mount Laurel designated judges should follow,




                                               41                                   A-3323-15T1
such as: our prior treatment of reallocation of present need 12;

bonus credits; cost-burdened poor; and the reduction of fewer

surrogate indicators.       In re N.J.A.C. 5:96 II, supra, 221 N.J.

at 30-33.     The Court emphasized that the courts should "employ

flexibility in assessing a town's compliance and should exercise

caution to avoid sanctioning any expressly disapproved practices

from     COAH's   invalidated     Third       Round    Rules."    Id.    at     33.

Finally, the Court reiterated its "hope that an administrative

remedy     will   again    become    an       option    for   those     proactive

municipalities      that   wish     to    use    such    means   to    obtain     a

determination of their housing obligations and the manner in

which those obligations can be satisfied."                Id. at 34 (emphasis

added).

                                     (iii)

       Here, the judge's ruling respectfully did not comport with

In re N.J.A.C. 5:96 II.           The Court repeated its instructions

that "previous methodologies employed in the First and Second

Round Rules should be used to establish present and prospective

statewide and regional affordable housing need."                      Id. at 30.

Further, it stated that "[t]he parties should demonstrate to the

12
     "The [S]econd [R]ound [R]ules define[d] reallocated present
need as 'the share of excess deterioration in a region
transferred to all communities of the region with the exception
of Urban Aid Cities.'" In re N.J.A.C. 5:96 II, supra, 221 N.J.
at 30 n.4 (alterations in original) (citations omitted).



                                         42                              A-3323-15T1
court   computations         of    housing      need       and    municipal           obligations

based on those methodologies."                 Ibid.        The Court stated that the

starting      point    for   a    determination            of     a    municipality's         fair

share responsibility is the prior round unfulfilled obligations.

Ibid.        Requiring   municipalities              to    undertake         a     retrospective

"separate and discrete" additional calculation for affordable

housing need does not follow the First or Second Round Rules.

It mandates an entirely new obligation unauthorized by the FHA.

       The judge concluded that "New Jersey's affordable housing

need    is    cumulative       and     there    can       be     no    gaps      in    time   left

unaddressed."         He based this conclusion on his interpretation of

Mount Laurel II, stating the Court "found the obligation to meet

the prospective lower income housing need of the region is, by

definition,      one    that      is   met     year       after       year    in    the   future,

throughout      the    years      of    the     particular             projection         used   in

calculating prospective need."                      However, the Court's statement

was aimed at the practical effects of establishing prospective

need, stating:

                   The Mount Laurel obligation to meet the
              prospective      [looking       forward      not
              retrospectively] lower income housing need
              of the region is, by definition, one that is
              met   year   after   year    in    the   future,
              throughout the years of the particular
              projection used in calculating prospective
              need.      In this sense the affirmative
              obligation    to     provide     a     realistic
              opportunity to construct a fair share of



                                               43                                         A-3323-15T1
           lower income housing is met by a "phase-in"
           over those years; it need not be provided
           immediately. Nevertheless, there may be
           circumstances   in   which    the   obligation
           requires   zoning   that   will   provide   an
           immediate   opportunity   --   for   instance,
           zoning to meet the region's present lower
           income housing need.     In some cases, the
           provision of such a realistic opportunity
           might result in the immediate construction
           of lower income housing in such quantity as
           would radically transform the municipality
           overnight.    Trial courts shall have the
           discretion, under those circumstances, to
           moderate the impact of such housing by
           allowing even the present need to be phased
           in over a period of years.        Such power,
           however, should be exercised sparingly. The
           same   power   may   be  exercised    in   the
           satisfaction of prospective need, equally
           sparingly, and with special care to assure
           that such further postponement will not
           significantly   dilute   the    Mount   Laurel
           obligation.

           [Mount Laurel II, supra, 92 N.J. at 218-19
           (emphasis added).]

The   language     quoted    by   the   judge     pertained   to   the   Court's

recognition that phasing in was an option for municipalities in

calculating      present    and   prospective       need.     Therefore,       the

judge's reliance on Mount Laurel II for the proposition that

there   can   be     no     gap   periods    is     respectfully    misplaced.

Furthermore, the FHA, enacted after Mount Laurel II, and the

Court's opinion in In re N.J.A.C. 5:96 II do not support such a

conclusion.




                                        44                               A-3323-15T1
                                      C.

    Whether       to     establish    a    new     methodology         that   imposes

retrospective     calculations       for   determining       affordable       housing

needs   during    the    gap   period,     which    would    be   in    addition     to

satisfying       prior     round     unmet         present    and        prospective

obligations, is best left for consideration by the Legislative

and Executive branches.         As the Court explained in 2013, when it

invalidated COAH's Third Round Rules:

                The   Legislature    may    determine   to
           authorize    new   avenues    for    addressing
           regional    need   and    the   promotion    of
           affordable housing.     And, it may do so in
           ways that we do not attempt to circumscribe
           in this opinion because we do not know the
           breadth   of   considerations   that   may   be
           brought     forth    through      informational
           legislative    hearings    on   the    subject.
           Nevertheless, it is the Legislature that
           must devise the parameters to such an
           approach.   It must craft new legislation if
           that is the course it wishes to take.       Our
           courts can and should exercise caution and
           defer to such solutions when appropriately
           drafted by the Legislature.     See N.J. Ass'n
           on [Corr.] v. Lan, 80 N.J. 199, 220 (1979)
           (acknowledging importance of deference to
           legislative enactments addressing general
           welfare (citation omitted)); Roe v. Kervick,
           42 N.J. 191, 230 (1964) (recognizing value
           of deference when reasonable minds could
           differ and issue to be remedied "involves a
           concept which varies with the needs of the
           times").

                Although the Legislature may consider
           enacting an alternative form of remedy for
           the promotion of affordable housing in the
           housing regions of this state, see Hills



                                          45                                  A-3323-15T1
            [Dev. Co. v. Twp. of Bernards, 103 N.J. 1,]
            65 [(1986)] ("No one should assume that our
            exercise of comity today signals a weakening
            of our resolve to enforce the constitutional
            rights   of   New    Jersey's  lower   income
            citizens. The constitutional obligation has
            not changed; the judiciary's ultimate duty
            to   enforce   it   has   not  changed;   our
            determination to perform that duty has not
            changed."),       enforcement     of      the
            constitutional obligation is still a matter
            that may be brought to the courts.

            [In re N.J.A.C. 5:96 I, supra, 215 N.J. at
            616-17.]

     Deferring to the Legislature on such policy considerations

is especially important here because COAH is a "legislatively

created, unique device for securing satisfaction of Mount Laurel

obligations."       In re N.J.A.C. 5:96 II, supra, 221 N.J. at 29.

As the Court stated, it is not our role to become a replacement

agency for COAH          by creating "an alternate form of statewide

administrative decision maker for unresolved policy details of

replacement       Third    Round   Rules."       Ibid.         We    discern     no

constitutional basis for the judiciary, much less this court, to

intrude    into    the    policy-making     arena,    an   area     traditionally

reserved    in     our    tripartite   system        of    governance    to    the

legislative13 and executive branches.


13
     Although not dispositive on the legal question presented on
appeal, there are two identical pending bills in the Assembly
and Senate directly on point.         The Legislative statement
accompanying those bills states in pertinent part:
                                                     (continued)


                                       46                                A-3323-15T1
                                    D.

    We     reject   the    contention    that   the   doctrine   of   judicial

estoppel bars the challenge to the court's holding as to the

gap-period issue.         We review a trial court's decision to invoke

judicial estoppel using an abuse of discretion standard.                State,

Div. of Motor Vehicles v. Caruso, 291 N.J. Super. 430, 438 (App.

Div. 1996).

    The law as to the doctrine of judicial estoppel is well

settled.    To protect the integrity of the court system, "[w]hen


(continued)

                 Although the [FHA] clearly states that
            the State Constitution's affordable housing
            obligation is comprised of "present and
            prospective need" for affordable housing
            only, some courts have misunderstood the
            intent of the Legislature behind the [FHA],
            and imposed a retroactive obligation for the
            so-called gap period.    The purpose of this
            bill   is    to   eliminate    any   possible
            misconception    with    respect    to    the
            Legislature's   intent    to    ensure   that
            determination of a municipality's fair share
            of affordable housing will be based upon the
            present and prospective need for affordable
            housing, as clearly set forth in the [FHA],
            and that a fair share obligation will not
            include a retrospective need that may have
            arisen during any "gap period" between
            housing cycles.

            [Statement   to   Assemb. No. 3821,  and
            Statement to S.B. No. 2254 at 7 (May 23,
            2016) (emphasis added).]




                                        47                            A-3323-15T1
a   party    successfully     asserts     a    position       in    a   prior      legal

proceeding,    that   party     cannot    assert      a    contrary     position      in

subsequent litigation arising out of the same events."                       Kress v.

La Villa, 335 N.J. Super. 400, 412 (App. Div. 2000) (emphasis

added),     certif.   denied,    168    N.J.    289       (2001).       It   has    been

summarized as follows: "The principle is that if you prevail in

Suit # 1 by representing that A is true, you are stuck with A in

all later litigation growing out of the same events."                         Kimball

Int'l, Inc. v Northfield Metal Prods., 334 N.J. Super. 596, 607

(App. Div. 2000) (citation omitted), certif. denied, 167 N.J. 88

(2001).

      Judicial estoppel is not a favored remedy because of its

draconian consequences.          It is to be invoked only in limited

circumstances:

             It is . . . generally recognized that
             judicial   estoppel   is   an   "extraordinary
             remedy," which should be invoked only "when
             a   party's    inconsistent    behavior   will
             otherwise   result   in   a   miscarriage   of
             justice."   Ryan Operations G.P. v. Santiam-
             Midwest Lumber Co., 81 F.3d 355, 365 (3d
             Cir. 1996) (quoting Oneida Motor Freight,
             Inc. v. United Jersey Bank, 848 F.2d 414,
             424 (3d Cir.) (Stapleton, J., dissenting),
             cert. denied, 488 U.S. 967, 109 S. Ct. 495,
             102 L. Ed. 2d 532 (1988)); see also
             [Teledyne Indus., Inc., v. NLRB, 911 F.2d
             1214,] 1218 [(6th Cir. 1990)] ("Judicial
             estoppel is applied with caution to avoid
             impinging on the truth-seeking function of
             the court because the doctrine precludes a
             contradictory position without examining the



                                         48                                   A-3323-15T1
           truth of either statement."). Thus, as with
           other claim and issue preclusion doctrines,
           judicial estoppel should be invoked only in
           those circumstances required to serve its
           stated purpose, which is to protect the
           integrity of the judicial process.

           [Id. at 608 (footnote omitted).]

In Ali v. Rutgers, 166 N.J. 280, 288 (2000), our Supreme Court

confirmed that judicial estoppel is an "extraordinary remedy."

The facts presented on this appeal do not warrant application of

this remedy.

      In invoking the doctrine of judicial estoppel and imposing

a   "separate   and   discrete"   gap-period   obligation,    the   judge

relied on our opinion in In re Six Month.        We conclude that the

court's    reliance   is   misplaced.    We    reach   that   conclusion

primarily because the parties and issues in In re Six Month were

substantially different than here, and since issuing our opinion

in In re Six Month, the Court provided Mount Laurel judges with

further guidelines and principles in In re N.J.A.C. 5:96 II.

      As to the dissimilarity of issues, our focus in In re Six

Month was on COAH's interim procedural rules designed to address

a six-year period between 1999 and 2004.        Supra, 372 N.J. Super.

at 68.    In In re Six Month, we identified the sole issue:

           These [seven] appeals concern only N.J.A.C.
           5:91-14.3, which provides a mechanism for
           municipalities previously certified in the
           second round to receive an extension of
           their substantive certification status and,



                                   49                           A-3323-15T1
           therefore, further protection from civil
           action   remedies, for  up   to   one  year
           following the adoption of the third-round
           rules, well beyond the previously scheduled
           1999 expiration of second-round standards
           and methodology.

           [Ibid.]

      Here, the issue is whether a retrospective "separate and

discrete" gap-period obligation is authorized by (1) the core

principles of the Mount Laurel doctrine, as codified in the FHA;

and (2) In re N.J.A.C. 5:96 II.             There, we were not asked to

address,   and   we    did   not   sanction,      a    gap-period    affordable

housing obligation, on top of prior unfulfilled obligations and

present and prospective needs.           Rather, we temporarily suspended

substantive certifications granted by COAH pursuant to N.J.A.C.

5:91-14.3, subject to rule modifications.                  Id. at 105.      As to

the   dissimilarity     of      parties,   none       of    the   Ocean    County

municipality entities participated in In re Six Month.

                                    V.

      In sum, we conclude that the core principles of the Mount

Laurel doctrine, as codified in the FHA, and the guidelines and

principles established by the New Jersey Supreme Court in In re

N.J.A.C. 5:96 II, do not authorize a retrospective new "separate

and   discrete"       affordable     housing      gap-period        obligation.

Following In re N.J.A.C. 5:96 II, a town should start with its

unfulfilled   prior     round    obligations      and      then   establish     its



                                      50                                  A-3323-15T1
present and prospective need in establishing a municipality's

fair share Mount Laurel obligation.

     Finally,     we     emphasize      that      our       holding      today   does       not

ignore    housing      needs    that     arose         in    the    gap    period      or     a

municipality's          obligation          to         otherwise          satisfy           its

constitutional fair share obligations.                      As Mr. Reading candidly

acknowledged,        "[low-    and     moderate-income]             households        formed

during the gap period may no longer represent an affordable

housing   need    due    to    a    variety       of    reasons         including    death,

changes   in    income,       increase    or      decrease         in    household     size,

retirement and/or relocation outside of New Jersey."                             However,

he also stated that housing need from the gap period would be

"partially     included"       by    those        living      in    "over[]crowded           or

deficient      housing    units      that      are      encompassed         in   the        new

calculation     of    [p]resent      [n]eed."           Therefore,         the   scope       of

present need should be dictated by identifiable housing need

characteristics as found by the reviewing Mount Laurel judge

when examining the evidence presented.14                       In this context, the

focus remains – as it has for the last forty years - on the

constitutional          obligation           of         realistically            affording


14
      The Municipal Group asserted in its amicus brief that
"municipalities   presented  facts   to   show  that developers
constructed roughly 90,000 rental units affordable to low[-] or
moderate-income households during the gap period."



                                          51                                        A-3323-15T1
opportunities for construction of a municipality's fair share of

present      and    prospective          need        for      low-     and       moderate-income

housing.

       We reach our conclusion emphasizing: (1) the core of the

Mount Laurel doctrine is a municipality "would satisfy [its]

constitutional obligation by affirmatively affording a realistic

opportunity        for    the   construction             of      its    fair       share    of    the

present and prospective regional need for low[-] and moderate[-

income] income housing," Mount Laurel II, supra, 92 N.J. at 205

(emphasis      added);      (2)      a    realistic              opportunity           depends     on

"whether there is in fact a likelihood -- to the extent economic

conditions allow -- that the lower income housing will actually

be   constructed,"        id.   at    222;      (3)        the    FHA       codified       the   core

constitutional holding undergirding the Mount Laurel obligation,

In re N.J.A.C. 5:96 I, supra, 215 N.J. at 584, and specifically

defined "prospective need" as a forward projection of housing

needs    "based      on    development          and        growth       .    .    .    [which     is]

reasonably     likely      to   occur      in        a     region      or    a    municipality,"

N.J.A.C. 5:92-1.3; (4) the FHA charged COAH with determining

"State and regional present and prospective need for low[-] and

moderate[-income] housing," In re N.J.A.C. 5:96 I, supra, 215

N.J.    at   589    (emphasis        added);         (5)      although           the   Legislature

amended the FHA twelve times during the gap period, it did not




                                                52                                          A-3323-15T1
impose    a   retrospective     "separate    and     discrete"    gap-period

obligation; (6) although the Appellate Division and the Supreme

Court    likewise   had    opportunities    during    the   gap   period    to

require a "separate and discrete" gap-period obligation, such an

obligation was not imposed, and instead remained steadfast to

the FHA's focus on State and regional present and prospective

need for low- and moderate-income housing; (7) identified low-

and moderate-income households formed during the gap period in

need of affordable housing can be captured in a municipality's

calculation of present need; and (8) under our tripartite system

of jurisprudence, imposing a "separate and discrete" gap-period

obligation is best left for consideration by the Legislative and

Executive branches of government where the issues can be fairly

and fully debated in the public forum.

    Reversed and remanded for further proceedings consistent

with this opinion.        We do not retain jurisdiction.




                                     53                             A-3323-15T1
