Daily Development for Monday, February 5, 2007

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MUNICIPAL GOVERNMENT; "AFFIRMATIVE HOUSING DUTY; MUNICIPAL DISCRETION; ROAD VACATION: A municipality may not use its discretion by refusing to vacate unneeded roads where the purpose or effect of such a refusal is to interfere with the quick and cost efficient construction of affordable housing. Menk Corporation v. Township Committee of Barnegat, 2006 WL 3849001 (N.J. Super. Law Div. 2006)

A developer sued to compel a municipality "to vacate three unimproved paper streets so that [the developer could] proceed with a 347-unit inclusionary development that [would] provide thirty-five affordable housing units." The municipalitys planning board granted final approval for the development, but made it "subject to the condition that [the municipality] would vacate three paper streets located within [the developers] property." Despite some early indication that it might vacate the roads, eventually the municipality decided it would not. That is why the developer sued. In its suit, the developer "contend[ed] that the paper streets within its subdivision [were] not needed for any public purpose ... [and that the municipalitys] refusal to vacate the streets inpede[d] the creation of affordable housing because it would require complete re-engineering of the project to accommodate the [existing] street layout thereby causing delay and significant cost generation and because the resulting street system would violate the Residential Site Improvement Standards." Further, when the municipality suggested that if it were required to vacate the roads, the developer would have to pay for the value of the underlying property, the developer responded that it had no such obligation. In its defense, the municipality claimed that it had "an absolute right to decide whether it should vacate a street and the court[s] simply cannot interfere with that exercise of discretion." Its other argument was that its refusal did not have Mount Laurel implications "because [the developer] could redesign its subdivision so as to incorporate [the existing] roads."

The Court recognized that "most of the cases relating to street vacation disputes [had] arisen in the context of a challenge to the affirmative exercise of that power as opposed to a refusal to exercise it." Nonetheless, it believed that the same principles applied. First, "[t]he general rule is that the decision to vacate lies in the sound discretion of the governing body and that power is subject to limited review by the courts. ... Vacation of public streets is essentially a legislative function. Therefore, it is a plenary power which is only subject to judicial review based on constitutional claims, those instances tainted with fraud or palpably not in the service of a public interest, or when there is a clear perversion of power itself." Thus, the Court was faced with the need to decide whether to "vindicate the Mount Laurel doctrine," it could interfere with the municipalitys discretion. In answering that question, the Court looked to an earlier New Jersey Supreme Court decision which stated: "Negatively, [a municipality] may not adopt regulations or policies which thwart or preclude" the opportunity for affordable housing. Prior case law also taught that where a road vacation does not serve the public interest under the vacation statute, such an ordinance can be voided by a court. There was even a case where a municipality vacated roads and because that vacation interfered with the municipalitys reasonable efforts to satisfy its Mount Laurel responsibility, the road vacation was set aside. Here, it was evident to the Court that the municipalitys "refusal to act affirmatively to vacate the streets in [the] factual context [presented had] constitutional implications when viewed within the framework of the Mount Laurel doctrine." In its mind, the Court believed that is was "not necessary to demonstrate that [the municipality was] willfully delaying [the developers] project or that it [was] affirmatively placing obstacles in the path of the opportunity to produce affordable housing." In fact, the Court held that there was "simply no sustainable public interest in maintaining the three unused and unneeded streets. To the contrary, there [was] a strong public interest in eliminating them so as to promote the construction of affordable housing quickly and without delay or unnecessary cost generation." For that reason, the Court ordered the municipality to vacate the roads.

As to whether the municipality was entitled to compensation for the roads, the Court could not find "a single case in which a municipality [had] received compensation for vacating a paper street located in property the municipality did not own at the time of the road vacation." Generally, "a municipality has no interest in the bed of streets. Instead, the presumption is that title to one half of the road bed lies in the abutting property owner subject to whatever public right of way or easement may exist." Since the developer owned land on both sides of the public street, the municipality was not entitled to compensation.

Compare: Mount Laurel Township v. MiPro Homes, L.L.C., 910 A.2d 617 (N.J. 2006) A municipality's condemnation action to further its Green Acres open space program is valid even if the developer demonstrates that the real motive behind such action is to slow residential development.

A developer purchased a sixteen-acre site in order to build twenty-three single family homes priced between $400,000 and $450,000 each. The municipality learned of the developer's plans and added the entire parcel to its list of sites to be purchased as part of the municipality's open space program. By the time the municipality added the property to its list, the developer had received final approvals and commenced site preparation work in anticipation of beginning construction. When the developer refused to sell its property to the municipality, the municipality began condemnation proceedings to acquire the property through eminent domain.

The lower court dismissed the condemnation proceeding, finding that the municipality's true purpose was not to promote open space, but rather to slow residential development which, according to the lower court, was an inappropriate use of the power of eminent domain. The Appellate Division reversed, finding that a municipality's condemnation action for open space is valid even if the developer demonstrates that the real motive behind such action is to slow residential development. The Supreme Court affirmed, noting New Jersey's strong public interest in acquiring and preserving open space, further noting the Green Acres Program and other statutes enacted for recreational and open-space purposes. It also noted that the municipality's desire to limit development, because of the strain on its resources (i.e., overcrowded schools, traffic, and pollution), was consistent with the public interest in acquiring open spaces.

Editors Comment: What the editor finds of interest in these cases is the fact that neither of them involves specific land use regulatory decisions, but other municipal actions. Nevertheless, the court applies "affirmative zoning" requirements popularized as "Mount Laurel" duties. The imposition of these duties appear to be general statements of public policy imposed by the courts, and not specific statutory requirements.

The Reporter for the above items is Ira Meislik of the New Jersey Bar.

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