# Urban League of Essex County v. Mahwah Tp.

> New Jersey Superior Court Appellate Division · August 1, 1984 · 207 N.J. Super. 169

URL: https://www.frixlaw.com/law-library/cases/2382492

## Case

- **Court:** New Jersey Superior Court Appellate Division
- **Decided:** August 1, 1984
- **Citations:** 207 N.J. Super. 169; 504 A.2d 66
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Harvey Smith
- **Cited by:** 10 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

207 N.J. Super. 169 (1984)
504 A.2d 66
URBAN LEAGUE OF ESSEX COUNTY, NORTH JERSEY COMMUNITY UNION, AMY INGRAM, JOHN LIGON AND JOSE MUNIZ, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
TOWNSHIP OF MAHWAH, BOROUGH OF RAMSEY, NEW JERSEY, BOROUGH OF SADDLE RIVER, NEW JERSEY AND BOROUGH OF UPPER SADDLE RIVER, NEW JERSEY, DEFENDANTS.
v.
BEAVER CREEK, INC., A NEW JERSEY CORP., EMSEY-MC BRIDE, A JOINT VENTURE; FRANKLIN COMMONS EAST, A NEW JERSEY PARTNERSHIP; FRANKLIN COMMONS WEST, A NEW JERSEY PARTNERSHIP; AND HIGH DEBI HILLS CORP., A NEW JERSEY CORPORATION, PLAINTIFFS-INTERVENORS.
Superior Court of New Jersey, Law Division Bergen County.
August 1, 1984.
*175 Richard Bellman for plaintiff (Steel & Bellman, attorneys).
E. Carter Corriston and Brian T. Campion for defendant Mahwah Tp. ( Breslin & Breslin, P.A. ).
John P. Nulty for plaintiff-intervenor Beaver Creek, Inc. ( Bannon, Rawding, Nulty & McDonald, attorneys).
Frank Holahan for plaintiff-intervenor Emsey-McBride ( Harwood, Lloyd, Ryan, Coyle & McBride, attorneys).
Glenn W. Banks for plaintiff-intervenor Franklin Commons East.
James W. MacIsaac for plaintiffs-intervenors Franklin Commons West and Ridge Gardens.
Robert K. Hartmann and Michael P. O'Rourke for plaintiff-intervenor High Debi Hills Corp. ( Hartmann, Brooks & Van Dam, attorneys).
HARVEY SMITH, J.S.C.
I — PROCEDURAL HISTORY
The first dozen years of this controversy, from the filing of the Complaint in February 1972 to publication of the Mount Laurel II opinion on January 20, 1983, are chronicled in the Supreme Court decision. Southern Burlington County N.A.A.C.P. v. Mount Laurel Tp., 92 N.J. 158, 332-336 (1983). However, as a result of Mount Laurel II, the focal point of this *176 litigation has shifted and the case in its present form bears little resemblance to the pre-1983 lawsuit. This is primarily because the Urban League has been joined in its quest for zoning changes by developers seeking a realistic opportunity to build low and moderate income housing at a profit.
Three months after the decision, Philip B. Caton was appointed as the expert to assist the Court in determining Mahwah's fair share of the present and prospective regional need for low and moderate income housing. In further compliance with the Supreme Court mandate, an expedited fair share hearing date was set. Prior to the hearing, over the municipality's objection, Beaver Creek, Inc. was permitted to intervene and seek a builder's remedy provided that it abide by all previous scheduling.
Three witnesses testified at the fair share hearing. The court-appointed expert presented his fair share formula consisting of three elements of equal weight: vacant developable land, commercial and industrial ratables in the region and employment growth. The resulting allocation of Mahwah's fair share of the regional need through 1990, in his opinion, was 699 units.
Alan Mallach, the Urban League's expert, voiced two objections to Caton's approach. He criticized the failure to include families living in physically standard units who spend more than 25% of their gross income for housing. Mallach also disagreed with Caton on the number of physically sub-standard units that comprised the indigenous need.
Michael F. Kauker, Mahwah's planner, took issue with Caton's regional definition but frankly admitted it was a "judgmental call." There was no allegation that the eight county region defined was unreasonable. He also challenged as being outdated the statistics used by Caton to establish the amount of vacant developable land.
Both Mallach and Kauker disagreed to some extent with the allocation process used by Caton. They disputed the weight or lack of weight given to employment base, fair share figures *177 assessed against inner cities and selection of a vacancy rate percentage. Nevertheless, all the experts agreed Mahwah has not met its fair share obligation.
Although the arguments against those aspects of Caton's reports have some merit, they involved judgmental decisions and "fine-tuning." All of these calculations are by nature somewhat speculative because they are based upon assumptions and projections over time. Consequently, the conclusions reached by Caton were found to be totally credible.
Shortly after the hearing, a Letter Opinion accompanied by the following Implementation Order was issued:
A fair share hearing in accordance with Supreme Court mandate having been conducted on September 6 and 7, 1983, and it being found that the Township of Mahwah has not met its Mount Laurel obligation:
It is on this 16th day of September 1983, ORDERED:
1. The fair share for Mahwah through 1990 is 699 units to be distributed as follows:
present need — low income units — 266 moderate income — 104
prospective need — low income units — 203 moderate income — 126
___ ___
469 230
2. The Township of Mahwah shall have 90 days from the date of this Order to revise the zoning ordinance to achieve compliance with Mount Laurel objectives.
3. Philip B. Caton of the firm of Clarke and Caton 342 West State Street, Trenton, New Jersey 08618, is hereby appointed as special master to assist the municipal officials in achieving compliance.
4. The master's fees for the fair share hearing shall be paid by the Township of Mahwah.
5. The master shall consider any application to construct Mount Laurel type housing and shall consider any zoning modifications to implement such a plan. The master may, in his discretion, schedule hearings for the presentation of any such plans and notify any appropriate entities, including the parties to this litigation, so as to permit them to be in attendance at any such presentations. In the event any such presentations embody plans which are consistent with Mount Laurel, the master shall make such determinations as he deems appropriate.
6. This being considered an ongoing emergent matter, the master may, upon telephone notice to all counsel, apply to the Court for further instruction.
*178 Following the Implementation Order, seven additional developers came forward to present plans for the construction of Mount Laurel housing on specific sites. Thus, the governing body was confronted with the necessity of considering eight major development applications as part of its rezoning obligation. In the ensuing 90 days, the Planning Board and Governing Body considered developers' submissions and obtained written reports from traffic consultants, engineering experts, the Chief of Police, the Township Superintendent of Schools and the Chairman of the Mahwah Environmental Commission. [1] P. David Zimmerman was retained by the Township as an additional planning expert and on December 23, 1983, the Mount Laurel II Housing Plan, prepared by Kauker & Zimmerman, was submitted to the governing body.
The philosophy embodied in Mahwah's housing plan was to achieve compliance with a minimal addition to the housing stock. By rehabilitating dilapidated structures, obtaining rent subsidies for qualified tenants and permitting the construction of accessory units in all residential districts, they felt some of the need could be met without new construction. Another approach was to obtain public funding for construction of subsidized housing on particular sites to be occupied exclusively by low income people. Nevertheless, even under their projections, the planners were forced to turn to interested private developers and allow construction of a substantial number of units under a mandatory set-aside program. [2] From the very beginning the governing body was concerned because extensive *179 use of this method, although likely to produce the required units, could almost double the housing stock and change the character of the community.
The court-ordered rezoning process culminated in the Township Committee's adoption of an ordinance to implement the Mount Laurel II Housing Plan. [3] Three sites were rezoned, given a new ML-1 designation and were earmarked exclusively for public housing. An additional three sites were rezoned and given a new ML-2 designation for private development with a 25% mandatory set-aside. Accessory apartments were made conditional uses in all residential districts and some unnecessary cost-generating requirements were eliminated. The Mahwah Housing Commission was created to encourage rehabilitation of dilapidated units, to work with the Bergen County Housing Authority in an effort to secure public sector funding, and to assist in expediting new private sector construction.
The municipality's position is that Ordinance #851 satisfies its obligation as shown on the following chart prepared by its planners:
*180
SUMMARY OF HOUSING PLAN FOR MAHWAH TOWNSHIP, N.J.
1980 1983 1984 1990
Low Moderate Low Moderate Total
1. Accessory Apartments - - 80 20 100
2. Bergen County Housing
Authority
Public Units - - 42 42 84
Section 8 - - 30 10 40
Manufactured Housing - - 5 5 10
3. Mahwah Housing Project 41 41
4. Rehabilitation HIP 36 12 77 25 150
5. Mandatory Set-Aside
(Private Development) 225 150 375
___ __ ___ ___ ___
Totals 36 12 459 293 800
Total Low Needed — 466 Units
Total Moderate Needed — 230 Units
Total Needed — 699 Units
Although municipal officials claimed they had achieved compliance, none of the interested developers believed Ordinance #851 provided any realistic opportunity for construction. Prior to rezoning, Mahwah's planning experts had given a numerical ranking to each proposed project. However, the Ordinance placed only the two highest ranked proposals in an ML-2 zone. Of the six denied rezoning, four sought intervention to challenge their ranking and seek builders' remedies. Those rezoned asked intervention to attack objectionable ordinance provisions and protect their new zoning designations.
On February 22, 1984, an order was issued instructing the Master to review Ordinance #851 for compliance and report his findings to the Court. The order also permitted all developers who previously submitted proposals to intervene by March 1, 1984. The following developers asked for and were granted leave to intervene:
*181
Units
Intervenor Acreage Proposed Zone
Kilmer Woods 93 1400 ML-2
Franklin Commons West 20 284 ML-2
Ridge Gardens 38 540 PRD-6
Beaver Creek 48 672 R-20
Franklin Commons East 44 624 R-20
High Debi Hills 32 404 C/R-40
The Master's report took issue with the Kauker-Zimmerman conclusion that Ordinance #851 provided a realistic opportunity for creation of 800 lower income units. Caton felt the allowance of accessory apartments, rehabilitation of dilapidated units and public sector new construction would realistically provide a maximum of only 129 units, leaving the balance of required units to be provided through a mandatory set-aside program. He also criticized the mandatory set-aside percentage and the failure of the ordinance to eliminate cost-generating requirements not necessary for public health and safety.
All six intervening developers joined the Master in alleging it was not economically feasible to build under the terms of the ordinance. Their experts concluded a 25% mandatory set-aside as well as cost-escalating ordinance standards effectively precluded any chance for a profitable project. Absent substantial relief from the Court, they flatly stated these projects would be abandoned in favor of more profitable investments.
The compliance hearing began as scheduled on April 4, 1983. Since it was the first one ever held, the question of burden of proof was raised at the outset. It was ruled that the municipality had the burden of proving compliance and must first submit evidence to justify its position on the effect of Ordinance #851. Trial commenced with the issue of whether fair share credit was to be given the municipality for 100 units of accessory apartments.
*182 II — ACCESSORY APARTMENTS
To draft an Ordinance for implementation of their Mount Laurel II Housing Plan, Mahwah's experts examined its present housing stock with an eye toward converting parts of existing houses into lower income units. They found 68.8% of the 3,809 units in the municipality were one-family houses with three or more bedrooms, thus suitable for conversion into multiple units. Next, analysis of accepted demographic material confirmed the size of individual households in the township has been shrinking largely because of the increased divorce rate, the trend toward postponing marriage and the growing number of senior citizens. This led them to conclude Mahwah's aging stock of roomy houses was an underutilized resource readily available for use in the effort to achieve compliance.
P. David Zimmerman, the Township's expert in this field, explored the various alternatives for housing lower income people in these existing houses. He considered legalizing "granny flats", small self-contained removable units designed for installation in backyards. Although they are extensively used in Australia, this concept was rejected because it was untested in this country and could significantly alter existing neighborhood character. The concept of "shared housing", where kitchens and other major facilities in existing houses are used in common, was also rejected. He believed legitimization of this practice would be akin to legalizing rooming houses and not appropriate for a suburban municipality like Mahwah.
Accessory apartments, on the other hand, presented a different set of facts, which led Zimmerman to conclude they could provide an acceptable solution. Accessory apartments are created by converting part of a single family residence into an independent unit which shares only a yard, off-street parking and perhaps an entrance. They are an inexpensive source of new housing, allow more efficient use of existing structures, help insure proper maintenance of older homes, ease the financial burden of senior citizen homeowners and enable single *183 parents to keep their children in a stable environment in the wake of divorce.
In an attempt to project the number of accessory apartments that would be built over the next six years should Mahwah revise its ordinance to permit them, Zimmerman surveyed municipalities which had adopted such regulations in the past. He found a lack of data in New Jersey and, consequently, focused upon the experience of five municipalities in other states. His study encompassed the history of accessory apartments in Westport, Connecticut; Weston, Connecticut; Babylon, New York; Lindenhurst, New York and Renton, Washington. Taking an average of percentage of accessory units in each town (8.2% to 14.2%), he divided these figures into the average time accessory apartment ordinances had been in effect (23.2 years) and ascertained an annual absorption rate (0.36% to 0.66%). Applying this annual absorption rate to Mahwah, he concluded 116 accessory apartments (the average between 82 and 150) would be built by 1990. To be conservative, he reduced this figure to an even 100 units. This turned out to be only 2.6% of the Township's housing stock, well below the 8.2% to 14.2% found in the municipalities studied. This lower absorption rate convinced him a realistic opportunity existed for the production of these apartments, providing building costs would allow marketing at appropriate rents. To test this theory, he developed a specific pro-forma for Mahwah using a $10,000 average cost of conversion and the following presumptions:
(a) A $10,000 home improvement loan at 14% for 15
years ....................................... $133.18 per month
(b) Increased taxes ............................. 16.38 per month
(c) 10% profit on $10,000 ....................... 83.33 per month
_______
TOTAL $232.89 per month
===== =======
Applying Caton's regional income data, Zimmerman determined a two-person low income household can afford a monthly rental of $266 for a one-bedroom apartment and a moderate income *184 household can afford $432 for the same unit. This led him to conclude accessory apartments "are eminently affordable to all low and moderate income households."
With a potential monthly income stream of up to $432 measured against expenses of only $149.56, Zimmerman felt the potential profit was large enough to make conversion an attractive proposition to homeowners. As an added incentive, he reasoned, market value of real estate would increase at least in the amount spent for the home improvement. He suggested if the proposed Mahwah Housing Commission promoted this program, there was a strong likelihood more than 100 lower income households would be living in accessory apartments by 1990.
Mahwah's Township Committee incorporated Zimmerman's recommendations into Ordinance #851. Accessory apartments were legalized for the first time and permitted as conditional accessory uses in all residential zones. A limitation of one accessory unit per house was imposed with the further requirement it be situated entirely "within the habitable portion of the principal dwelling." The floor area had to be not less than 400 square feet nor more than 800 square feet and cover no more than 30% of the principal dwelling. Occupancy was limited to a maximum of three people. Each unit was required to have its own kitchen, bathroom and entrance. Owner occupancy of either unit and adequate off-street parking for both units was mandatory. A certificate of occupancy would be issued "only if at least one of the households has a low or moderate income."
The other three experts who reported on this subject agreed that authorization of accessory apartments is an acceptable mechanism to help achieve compliance under most circumstances. However, the restrictive provisions in this ordinance combined with the nature of Mahwah's housing stock caused them to sharply dispute Zimmerman's projections. Caton was conservative in his prognostication about the future effectiveness of these provisions. Both Alan Mallach, the Urban League's *185 expert, and Peter Abeles, Franklin Commons East's expert, believed these amendments would not result in the production of any significant number of lower income units.
Zimmerman's five town study was attacked as being misleading because nearly all the conversions included in his computations had taken place prior to the enactment of ordinances. Once accessory apartments were legitimized, very few subsequent conversions had been reported. Although accessory apartments comprise 10% of Babylon's housing stock, only six applications have been processed since passage of its ordinance in 1980. In Princeton Township, one of the few New Jersey municipalities to allow accessory apartments and similar to Mahwah in many respects, only 16 conversions under the ordinance were reported over a 10 year period.
Mallach testified Zimmerman's conclusions were distorted by the input of the data from Babylon. That municipality, he pointed out, has a completely different type of housing stock than Mahwah where houses were selling last year at prices well over $100,000. In Babylon, prior to its ordinance, there were scores of vacant tract houses for sale and homeowners were more concerned about paying mortgages than preserving property values. In his opinion, Mahwah homeowners would not convert 1/3 of their $100,000 houses into rent-controlled apartments. Caton concurred noting Zimmerman's projection has a fundamental problem: the absolute lack of precedent. None of the other ordinances referred to imposes a price ceiling on rentals.
Much of the criticism of Zimmerman's pro forma was based upon a total lack of back-up information. The $10,000 estimated conversion cost was considered much too low and 15 year home improvement loans at 14% interest are no longer available. Other deficiencies were the failure to include utility charges, insurance premiums and reserve for maintenance and repairs. Mallach determined these apartments could not possibly rent for less than $304 to $416 a month. Both he and *186 Abeles were of the opinion there would be only a trickle of conversions unless a direct financial incentive is given to home-owners.
Turning to the ordinance restrictions, they found no basis for the one unit per single-family home limitation. The consensus was the number of units should be dictated by available space and house configuration. Locating the accessory apartments entirely within the habitable portion of the principal dwelling was also deemed arbitrary since it eliminated the use of attached garages and prevented any structural additions. The limitation on square footage in many cases would prevent the most economical type of conversion (simply partitioning off a second floor). The limit on the number of occupants was found to bear no relationship to health and safety standards. In sum, these unnecessary conditions would, in all probability, inhibit homeowners from undertaking these building alteration projects.
Zimmerman's contention that real estate value would be increased by the cost of conversion was emphatically rejected. With houses selling in and above the $100,000 range, the other experts considered an accessory apartment for tenancy by a lower income household a deterrent to resale and a depressant of market value. Most prospective purchasers would want these homes for their own family use and the prospect of dispossessing a lower income tenant before reconverting would hurt future sales.
Caton's projections accepted Zimmerman's formula, but made adjustments to compensate for the distortion caused by the inclusion of Babylon. He then reduced his figure to reflect the anticipated slow beginning of the program and negative effect of the rent ceiling. Predicated on the assumption of an ordinance modification to allow the use of attached garages, he concluded Mahwah should be credited with a total of 25 units.
Given a less restrictive ordinance, the potential exists for municipalities to use this mechanism more productively. However, *187 based upon the evidence in this case, the accessory apartment provisions of Ordinance #851 provide a realistic opportunity for the production of 25 units of lower income housing (5 low and 20 moderate).
III — PUBLIC SECTOR
Mahwah plans to provide 325 units of lower income housing through the public sector, both by new construction and use of existing structures. A substantial portion of these units will be the result of on-going independent programs of the Bergen County Housing Authority; others will be the product of cooperative agreements which have already been executed between the Township and the Authority.
A — PUBLIC HOUSING
The Kauker-Zimmerman report claims credit for 54 units of public housing by new construction. "Stag Hill Site A", an eight acre tract owned by the County and under contract to the Authority, and two smaller parcels, have been rezoned for this purpose. These parcels have been designated ML-1, requiring 100% of the units be available for low and moderate income households. HUD has given site approval and reserved funds for a specific project on "Stag Hill Site A". Forty-five units, all exclusively designed for low income renters, will be constructed there. An additional nine units will be built on a different parcel under contract to the Authority. These sites have received HUD approval, are appropriate for development and the Authority has successfully completed projects of this type in the past.
Caton agreed all 54 of these units should be credited toward the fair share.
The Township also claims credit for 30 moderate income units under an "Affordable Housing Program" sponsored by the Bergen County Housing Authority. The Authority buys the land, makes site improvements and, through public bidding, *188 contracts for construction. The purchasers pay only actual construction costs, which have been averaging $40,000. Because a $10,000 down payment is required, acquisition is limited to the upper segment of moderate income families. These units will be built on "Stag Hill Site A" in conjunction with the rental housing.
The Authority has been successful in providing these affordable units in the past and the Master expects continued success. He believes the combination of low and moderate income housing by rental and ownership opportunities will provide a good economic mix on the site and agrees Mahwah should receive full credit for these 30 units. During the trial Carla Lerman, Executive Director of the Bergen County Housing Authority, testified funds are available for an additional five units. Her testimony is credible and gives Mahwah credit for all 35 units.
B — MAHWAH HOUSING PROJECT
The Kauker-Zimmerman report proposed a "Mahwah Housing Project" be constructed on an eight acre parcel owned by the County known as "Stag Hill Site B." Three development options, with varying numbers of lower income units, were proposed.
The first option involved a HUD program in which three or more bedroom apartments would be constructed for rental to lower income families. A total of 477 of these units may be made available by HUD in this fiscal year. They will be allocated throughout Region 2, an area encompassing New York, New Jersey, the Virgin Islands and Puerto Rico. Mahwah plans to construct 80 of these units on this site. Carla Lerman testified the only action taken by the Authority has been to request an allotment of 100 of these units from HUD. The program has not yet been advertised throughout the County and no site selections have been made. Mahwah's only action has been to express an interest to the Authority.
*189 The Master found that no realistic opportunity for this type of construction exists, because Mahwah's chance of obtaining such a large percentage of the Region 2 allocation is remote.
The second alternative was for the Township to seek HUD funding through the Bergen County Community Development Block Grant Program. These funds would be used to provide infrastructure improvements on the site, making it economically feasible to build 80 units, 41 of which would be affordable to low income families.
The third option was to induce the County to sell this parcel to a developer at private sale, on condition lower income housing be built. The raw land cost would be set low enough to allow the developer to profitably build 84 market rate units and 24 subsidized units.
Utilization of "Stag Hill Site B" for any type of Mount Laurel housing seems unlikely in the foreseeable future. The evidence shows it to be topographically unsuitable in many respects. The proposed alignment of Highway I-287 borders the property and has caused the Bergen County Housing Authority to reserve consideration of acquisition at this time. The present ML-1 zoning designation precludes the private development options and the proposal to sell public lands to a private developer without open bidding or specific statutory authority is of questionable legality.
There is no realistic opportunity for the creation of lower income units through any of these options.
C — RENT SUBSIDIES:
The Township intends to participate in a HUD Section 8 Rental Subsidy Program. This is a mechanism to subsidize renters spending more than 30% of their gross income for housing. Tenants qualifying under federal guidelines are issued a Certificate of Participation, which requires them to find an apartment at a rental not exceeding the regional ceiling fixed by HUD. The landlord must agree to participate before *190 HUD will subsidize the difference between the approved rent and the amount the tenant is able to pay.
This program is already available to Mahwah tenants under the auspices of the Bergen County Housing Authority. However, only six certificates are being used in the Township, mainly because rents exceed the HUD maximum. Twelve other families are on the waiting list, but there is no guarantee future participants will find qualified housing in the municipality.
Both Caton and Mallach agree this rent subsidy program is not an appropriate tool to be used in the context of meeting fair share. It is an income transfer device, which neither creates new housing nor rehabilitates substandard units. In addition, families living in physically standard units but forced to spend more than 25% of their gross income on housing were specifically excluded in the fair share computations. Had they been included, the fair share number would be substantially greater than the 699 units identified.
The municipality is entitled to no credit toward the fair share for this program.
D — REHABILITATION:
Kauker and Zimmerman originally reported the existence of 150 dilapidated units in the Township, all of which were to be rehabilitated by 1990. A dilapidated housing unit is defined as one with multiple serious deficiencies in need of substantial rehabilitation in order to be suitable for permanent habitation. Lower income occupants of such units are an underhoused segment of the population, generally comprising the bulk of the indigenous component of a municipality's present housing need. See Mount Laurel II — Challenge and Delivery of Low-cost Housing, Center for Urban Policy Research, Rutgers (1983). Consequently, any such unit salvaged through rehabilitation while remaining affordable should be credited against the township's fair share obligation.
*191 The Bergen County Home Improvement program (HIP) provides the only public funding currently available for this purpose. Financial assistance for rehabilitation is given to lower income households in the form of low interest or deferred payment loans for correction of serious code violations relating to health and safety. A mere 13 rehabilitations have been completed in Mahwah under this program since 1980 and only five applications are currently being processed. Nevertheless, the township planners hope to substantially increase the number of HIP applications by utilizing the proposed Mahwah Housing Commission. They intend to educate the target population through an aggressive out-reach campaign and urge owners of dilapidated houses to take advantage of the County's program. [4]
In his fair share report, the Master identified 102 substandard units as the indigenous component of Mahwah's present need; the Township subsequently reduced its figures to conform. Furthermore, since only owner-occupied units are eligible for HIP loans, Caton estimated the number of dilapidated units that would qualify by applying the owner-to-renter ratio which presently exists in Mahwah. This eliminated tenant-occupied units, leaving a balance of 60 eligible structures. He concluded it would be realistic to expect 1/3 of these to be rehabilitated by 1990; ten low and ten moderate. The evidence clearly supports the Master's conclusion.
E — MANUFACTURED HOUSING:
Credit for ten units of manufactured housing is claimed by the municipality. The basis for this assertion is its proposed participation in an experimental program sponsored by the Bergen County Housing Authority. This project would entail *192 acquiring suitable sites in Mahwah for the construction of rental housing by a prefabricated technique.
This pilot program is too speculative at this juncture to be given credit.
F — CONCLUSION:
The evidence compels a finding that Mahwah's claim for credit of 325 public sector housing units is overstated. Based upon the testimony and exhibits, the Township has demonstrated a realistic opportunity for the production of only 109 units, 64 low and 45 moderate.
IV — OVERZONING
The mandatory set-aside is the only other device in Ordinance #851 designed to provide a realistic opportunity for construction of Mount Laurel housing. Since the extent of its use now becomes the pivotal issue, a recapitulation of the effect of prior rulings on Mahwah's fair share obligation will clarify the extent of the problem. So far, credit has been disallowed for 291 units claimed by the municipality as shown on the following chart:
CLAIMED BY MAHWAH ALLOWED BY THE COURT
Low Moderate Total Low Moderate Total
Accessory Apartments 80 20 100 5 20 25
Bergen County Housing
Authority
Public Units 42 42 84 54 35 89
Section 8 30 10 40 0 0 0
Manufactured Housing 5 5 10 0 0 0
Mahwah Housing Project 0 41 41 0 0 0
Rehabilitation HIP 113 37 150 10 10 20
_______________________ ______________________
Totals 270 155 425 69 65 134
====== === === === == == ===
Subtracting credits allowed by the Court from the total fair share obligation leaves a deficit of 565 units to be provided *193 through the mandatory set-aside ordinance provisions. [5] However, in order to achieve compliance, it will be necessary to either rezone or fashion remedies for a greater number of units.
In Oakwood at Madison, Inc. v. Tp. of Madison, 72 N.J. 481 (1977), the Supreme Court recognized the necessity for overzoning. Judge Conford, dealing with production of least-cost housing, noted:
sound planning calls for providing for a reasonable cushion over the number of contemplated least cost units deemed necessary and believed theoretically possible under a particular revision. Plaintiff adduced testimony that a reasonable margin over any formulaic quota was necessary in order to produce any likelihood of achievement of the quota. The reasons are evident. Many owners of land zoned for least cost housing may not choose to use it for that purpose. And developers of least cost housing may not select all of the zoned land available therefor, or at least not within the anticipated period of need. Thus, overzoning for the category desired tends to solve the problem. [ Id. at 519 .]
In Mount Laurel II, the Court applied this concept to fair share obligations holding, "a realistic opportunity to provide the municipality's fair share may require over-zoning, i.e., zoning to allow for more than the fair share if it is likely, as it usually is, that not all of the property made available for lower income housing will actually result in such housing." [ 92 N.J. at 270 ; emphasis supplied.]
Even Mahwah's housing plan recommended zoning for a surplus of 101 units "to assure greater ability to implement and achieve compliance." During the trial, the opinions of experts were so varied as to be of little assistance. Zimmerman's report recommended zoning for 101 extra units. In his testimony, he attributed the entire surplus to accessory apartments and public sector housing. He said no overzoning was required *194 in the private sector because applications by builders assured the construction of the mandated units. The Master testified the extent of overzoning should depend on the reliability of the local housing plan, the final content of the ordinance and the size of the various development proposals. Under the facts in this case, Caton felt the extent of overzoning could be reduced from the current 101 unit projection. Peter Abeles opined site and financing problems will prevent successful completion of some of these projects. Overzoning is modest insurance that the Mount Laurel obligation will be met. He recommended 20% to 25% overzoning. Alan Mallach testified if there were no ready builders and this were merely a rezoning of vacant sites, 50% overzoning would be appropriate. In this case, he felt 10% overzoning would be adequate unless Kilmer Woods decides not to construct lower income housing. In that event, he feels there should be a total rezoning.
Throughout these proceedings some developers have voiced an intention to abandon their projects unless the mandatory set-aside provisions of Ordinance #851 are substantially changed. Kilmer Woods is the largest project involved and at the required 25% set-aside, would provide 325 lower income units. It has a preliminary site plan approval for construction of 500 luxury townhouses on the site under the prior zoning (PRD-6). Emsey-McBride, the developer, maintains this site plan is protected from the zone change to ML-2 for a period of 3 years from the date of preliminary approval under N.J.S.A. 40:55D-49. Depending on the outcome of this litigation, it intends to decide at some future time either to build lower income housing or litigate the novel issue of whether the constitutional dimensions of Mount Laurel II predominates over the statutory protection afforded by the Municipal Land Use Law.
Ridge Gardens, Franklin Commons East and Franklin Commons West are separate entities with aspects of common ownership and a single managing partner. At the required 25% set-aside, they would provide 362 lower income units. Thus, *195 the fate of 72% of the potential lower income units involved rests in the hands of two decision-makers. If either one abandons his project any prospect of meeting the fair share will be greatly diminished. [6]
Mixed income developments under a mandatory set-aside concept have never before been attempted in New Jersey. The total absence of precedent, the concentration of power, the hazards of the construction business, the vicissitudes of the economy and the spectre of protracted litigation make completion of every one of these projects extremely questionable. Considering the evidence in this case, overzoning of 25% of the units to be furnished through private sector construction is necessary to provide a "reasonable cushion". Thus, a total of 706 units must be provided through mandatory set-asides: 565 deficit and 141 overzoning.
V — COMMUNITY IMPACT
In order to provide 706 units of lower income housing under a mandatory set-aside program, a total of from 2824 to 3530 new units would have to be constructed. This will almost double the existing housing stock and, according to the township's experts, have a tremendous adverse impact on the community. Mahwah's position is the Court should either postpone its Mount Laurel II obligation or phase it over a period of years.
Throughout this litigation, Mahwah maintained the belief compliance should be achieved with minimal addition to the housing stock. This was grounded on the assumption any significant addition will cause a precipitous rise in municipal taxes and change the rural character of the community. To advance this argument, Kauker discussed the "community character" *196 which currently exists in Mahwah. He explained the community character is the way people perceive their environment; their reactions to visual impacts of buildings and land use, attitudes about the way individuals interact, even perceptions while sitting in traffic. Planners gauge this character by examining several factors: population change, rate of this change, density, land use mix, financial ability of the municipality to provide services and changing relationships with other communities.
Kauker described Mahwah as a diverse but well-balanced community with varied housing types. The municipality is approximately 26 square miles which includes 16 square miles of conservation zone. According to the 1980 census, the population was about 12,100 people living in 3,721 housing units. He explained that the population is distributed into identifiable neighborhoods, each with distinctive characteristics.
Fardale, located in the southeast corner of Mahwah, is a low density area, consisting mostly of single family homes on one acre lots. It also contains a PRD zone with a clustering of townhouses. The township's western section is largely pastoral with a scattering of one family homes and limited capacity roads. The central area is low-density with many open spaces and mostly 1 acre zoning. A good deal of its land mass lies in the conservation area of the State Development Guide Plan. Ramapo Ridge is the neighborhood designated by the Governing Body for high-density development. It is zoned for and has been developed with office buildings and townhouses. Kilmer Woods, the largest Mount Laurel II development, is planned for this area with the municipality's approval. West Mahwah, an older area located north of Route 17, is densely developed with commercial uses, garden apartments and older homes on small lots. Cragmere, located in the northeastern section between Franklin Turnpike and Airmont Avenue, consists of many different housing types: old homes on small lots, new homes on 1/2 acre and acre lots, garden apartments and a PRD development. Masonicus, the northeasterly section of town, *197 east of Airmont Avenue, contains one family houses, townhouses, and is similar to Fardale.
Kauker then turned to the impact immediate compliance would have on Mahwah. He calculated an average growth rate from 1950-1980 of 850 units per decade. To project the rate from 1980-1990 he used three different formulas: under Ordinance #851 there would be 1925 new units; using Caton's 22% set-aside, 2,796 units; and with a 20% set-aside, 3,495 new units would result. The population would rise from 12,100 to a possible total of 24,386, what he termed a "population explosion."
Another significant aspect of impact was the projected change in ratio of single-family to multi-family units. Currently, Mahwah has roughly 66% single family dwellings, while in Northern Bergen County 90% of the housing units are single-family. Projecting the 24,386 population and total of 8,409 units in 1990, the ratio of single to multi-family will become approximately 44% single and 55% multi-family. He noted that only the urbanized South Bergen towns have more multi-family than single-family homes. This factor alone, he stated, would change Mahwah from a semi-rural to an urban or semi-urban community.
Kauker also noted Mahwah's current share of Bergen County's housing units of 1.25% would rise to 2.14% in 1990. This would result in an "unfair share" for the township. Based upon a telephone survey, he formed the opinion the housing market in Mahwah's region cannot absorb all the market rate units that would be built under the mandatory set-aside program. According to this reasoning, if Mahwah and only a few other towns are compelled to fulfill their Mount Laurel II obligation, the market would be saturated and the rest of the municipalities would be "held harmless" from producing lower income housing.
The Master and other experts disagreed with Kauker's opinion of negative results which would occur if compliance is *198 achieved. They asserted community character involves the mix of land uses and their proportions, not visual impressions. Impact really involves the effect of development on infrastructure, i.e., roads, sewers, water supply and municipal services. All agreed Mahwah's infrastructure is sufficiently developed to accommodate all the Mount Laurel II construction required with little difficulty. Even if visual impressions were considered, the impact of new construction would be trivial because all the new set-aside developments would occupy less than two% of Mahwah's land mass.
Moskowitz was the only expert who agreed with Kauker the change in proportion from 60% single-family/40% multi-family units to 45% single-family/55% multi-family units would be substantial. The others characterized the proportional change as insignificant, noting an increase in multi-family units is a trend in all communities due to the prohibitively high cost of one family houses. Also, they felt Kauker's assumption that 50% or more multi-family is some sort of standard for urban character is simply incorrect. Hence, Kauker's theory that compliance would change the semi-rural nature of the community is unfounded.
The notion that compliance would cause a precipitous rise in taxes was advanced by Zimmerman. Based upon his calculations, the municipal tax burden of set-aside and public housing units will be significantly greater than tax revenues generated. This difference, which he termed a municipal subsidy, would be $1,557,000 or $500 more in taxes for each present homeowner.
The other experts rejected this theory for several reasons. There was no reliable back-up data to support any of his calculations and the industrial and commercial segments of the tax base were not included. Indeed, the rezoning of Franklin Commons from an industrial zone to ML-2 by the township is inconsistent with Mahwah's argument. It was also pointed out single-family houses cost municipalities more than they generate *199 in taxes and multi-family units generally break even or produce revenue.
Finally, to ameliorate this alleged negative impact, the township planners advanced the argument any fair share should be phased. It was suggested the development occur over 18 years, representing three Master Plan periods, as had been recommended for settlement in other communities involved in Mount Laurel II litigation.
The evidence in support of the community impact theory was unpersuasive. There was a total lack of underlying data produced to verify Mahwah's position. The "destruction of neighborhood" theme, created by Kauker for this litigation, is totally subjective and not based upon established planning principles. The true measure of community impact is the capacity of infrastructure to absorb new construction. Clearly, Mahwah's roads, sewers, utilities, schools and water supply system are all capable of accommodating the required development.
The change in ratio of one family homes to multi-family units is of little significance. Even absent Mount Laurel II, all experts agreed economics have changed the pattern of development in Northern Bergen County. Zimmerman's prognostication of a $500 per year tax increase for present homeowners is totally unfounded.
The postponement for phasing argument has already been disposed of by the Supreme Court. In response to Mount Laurel I, Mount Laurel Township rezoned and included "control provisions" to equate the fulfillment of its fair share obligation with fulfillment of similar obligations by other municipalities in the county. The trial court found no provision in Mount Laurel I making a fair share obligation dependent upon the action of other municipalities. So. Burl. Cty. N.A.A.C.P. v. Tp. of Mt. Laurel, 161 N.J. Super. 317 , 348 (Law Div. 1978). Mount Laurel II specifically approved this ruling. 92 N.J. at 304 n. 54.
*200 VI — THE MANDATORY SET-ASIDE PERCENTAGE
The Implementation Order of September 6, 1983, in addition to requiring the revision of Mahwah's zoning ordinance, directed the Master to consider specific proposals by developers. To this end, Caton conferred with various municipal officials and set informal guidelines to assist interested developers. The township planners wanted to have these developments designed in a manner compatible with the existing housing stock. Instead of high rises, they suggested townhouses with building heights similar to those previously constructed in the municipality or condominium flats with densities approximately the 14 units per acre found in the Garden Apartment (GA-200) District.
In order to determine economic feasibility, prospective developers had to ascertain the required number and sales price of the mandated lower income units. The original proposals were all based upon a 20% set-aside, i.e. four market rate units for each lower income unit. Sales prices of the lower income units were computed on the basis of income ceilings furnished by the Master. [7]
All proposals submitted were evaluated by township planners as part of the site selection process. They considered the following "potential development impacts" for all projects: on-site environmental impact, community-wide impact and compliance with current standards. The category of environmental impact dealt with the effect of the individual project on land and vegetation, flooding and streams, form and location of buildings, interior road network and parking and proximity to social and cultural amenities. Community-wide impact was *201 identified as increased demand on utilities, off-site traffic and population density. Compliance with current standards included consistency with existing master plan and zoning controls, potential for completion of the project and consistency with Mount Laurel objectives.
Community-wide impacts were the most heavily weighted, and environmental impacts the least. The proposals were then ranked in order of their desirability: (1) Kilmer Woods; (2) Franklin Commons West; (3) Ridge Gardens; (4) Cherry Hills West; (5) Beaver Creek; (6) Minetto; (7) High Debi Hills; (8) Franklin Commons East; (9) Cherry Hills East; (10) Buehler. [8]
The township planners had not anticipated the number of developers eager for an opportunity to provide lower income housing. Zimmerman testified the balanced Mahwah Housing Plan called for about 1/2 of its fair share obligation or 350 units to be provided through mandatory set-asides with a total new construction limited to 1,000 units. This would require a 33 1/3% set-aside, forcing builders to subsidize each lower income unit with profits from only two market rate units. A 20% set-aside would result in 1750 new units which, in his opinion, would radically change the character of the municipality.
In Ordinance #851, the Township Committee settled on a 25% set-aside at a density of 14 units per acre and a height limitation of three stories. They also incorporated a number of cost reduction provisions for construction in the ML-2 zone. The new zone included only three tracts that would adequately provide the required private sector construction:
*202
Total Units at Lower Income Units
14 per acre at 25% set-aside
Kilmer Woods 1300 325
Franklin Commons West 200 50
Lotito 16 4
____ ___
Total 1516 379
===== ==== ===
Kauker and Zimmerman considered the 25% set-aside reasonable. They believed the 14 unit per acre density in ML-2 zones automatically increased raw land values to an extent large enough to enable developers to profitably subsidize at a 3 to 1 ratio. The basis for this conclusion was a new methodology they devised and used to economically evaluate each developer's submission. The first step was to ascertain the land value after rezoning by taking the proposed sales price of the market rate units, multiplying it by 14 for each acre and ascribing a land value of 10% of that figure. Next, they computed an anticipated profit on all units by applying a profit percentage to the proposed sales price. Then, they estimated the savings developers would realize in site preparation because of the ordinance cost reduction provisions. The total increased land value, profit on construction and site preparation savings were termed a "found resource."
The second step was to calculate the dollar amount of the subsidy needed for the lower income units. This was done by adjusting the developer's estimated construction costs downward to arrive at what they considered the reasonable cost of construction. Then, the gross income to be derived from the sale of lower income units was calculated by using the Master's figures to compute allowable sales prices. Subtracting allowable sales prices from the reasonable construction costs yielded the subsidy required. This was dubbed the "shortfall."
Finally, the "shortfall" was deducted from the "found resource" to ascertain the net financial gain or loss resulting from the rezoning. A good deal of testimony concerned the *203 application of this methodology to the financial data furnished by Emsey-McBride in the pro forma for Kilmer Woods. Despite many concessions about the accuracy of the figures used, Kauker and Zimmerman concluded this project would yield astronomical profits. And, they were convinced an economic analysis of the other proposals would show the same result, i.e., FOUND RESOURCE minus SHORTFALL equals WINDFALL.
None of the other experts agreed with either the approach or conclusions of the township planners. Initially, there is no uniform existing base price of land upon which to assess the value of these diverse properties for the purpose of measuring an increase in value attributable to the zone change. The sites involved were located in a variety of districts: Kilmer Woods and Ridge Gardens were PRD-6 (townhouses at six units per acre); Franklin Commons West was GI-200 (general industrial); Beaver Creek and Franklin Commons East were R-20 (single-family on 1/2 acre lots) and High Debi Hills was R-40 (single-family on one acre lots).
Secondly, construction under a mandatory set-aside program is completely different from building under the pre-existing ordinance. Even in the PRD-6 district, the increase from 6 to 14 units per acre is so great as to represent a change in kind, not degree. Tight plot plans, minimum amenities and scaled down individual units are required in ML-2 construction. While undisputed evidence showed present low density townhouses in Mahwah are selling in the $150,000 range, market rate units in ML-2 developments are projected at $50,000 to $90,000. Obviously, land values will not increase in proportion to the number of units, especially in an experimental mixed income development.
Thirdly, there is no sound basis upon which to gauge anticipated building costs. The expert testimony varied between $28 and $48 per square foot for "sticks and bricks" construction costs in today's marketplace. It is reasonable to anticipate a delay in the commencement of construction until the appellate *204 process is completed in this case. None of the witnesses even dared to project future building costs.
Finally, the township planners estimated there would be a savings of from $500 to $1,000 per unit for site improvement costs because of the ordinance amendment. They considered this part of the "found resource" and credited it as a gain to the developer. Elimination of restrictions and exactions not related to public health and safety are required by Mount Laurel II and Mahwah's experts' premise results in a surcharge to developers for eliminating the very cost-generating requirements responsible for inflated housing prices.
In sum, Mahwah's planners were more concerned with limiting production of new units and preventing windfall profits than providing a reasonable opportunity to construct lower income housing. To this end, they requested proposals based upon a higher than 20% set-aside. Several developers offered 22% on condition tax abatements be granted or major off-site improvements be provided. The Township, however, deemed these submissions as admissions which bolstered their position on profitability.
The Master conditionally endorsed a 22% set-aside provided sufficient concessions and incentives were granted. His position was based upon updated income figures which substantially raised sales prices of subsidized units. Since the original proposals anticipated profitability at 20%, he reasoned this added revenue should make 22% feasible. Not totally enamored of a requirement above 20%, he reported: "... while a distinction of 2% might seem diminimus (sic), it could actually reduce the total residential rezoning required by as much as 250 units."
The other experts were all adamant that any increase above the 20% set-aside would unnecessarily jeopardize the prospects for construction. Alan Mallach testified the 25% set-aside deviates from the position of the Supreme Court in Mount Laurel II and disregards the historical basis for the 20% *205 set-aside. Since there are willing builders with ample developable sites in Mahwah, the only possible reason for proposing the higher level is to discourage construction. He pointed out a 20% or less set-aside has been the national experience with few deviations; e.g. a 12 1/2% set-aside Maryland program has produced over 5,000 lower income units, a 25% set-aside California program has been successful but under much more liberal income conditions for buyers of subsidized units. He emphasized there is no history of any lower income units being produced under a 25% set-aside with the stringent Mount Laurel income restraints. The difference between a 20% and 25% set-aside imposes a significant increase in cost to the builder, affects marketability and increases the risk.
Peter Abeles not only agreed with Mallach but testified the 20% set-aside should be adopted on a state-wide basis. He said the surest way to stop Mount Laurel type development is to increase the set-aside precentage. Twenty percent (20%) has become the generally accepted standard in pending litigation and adjudication of a specific percentage in each case will lengthen and add to the cost of litigation. Put another way, it is unnecessary to reinvent the wheel in every case.
Harvey Moskowitz, one of Kilmer Woods' experts, pointed out that although Mount Laurel II referred to 20% as a minimum, it has already become a standard. He likened it to set-back requirements where the minimum also becomes the maximum. His opinion was the additional financial risk imposed by a 25% set-aside will effectively prevent construction. Robert Mcauliffe, Kilmer Woods' other expert, echoed Moskowitz' sentiments. He testified any increase in the 20% set-aside would change the social complexion of the development and cause Kilmer Woods to abandon its project because of the increased marketing risk.
The weight of the credible evidence presented combined with the intent of Mount Laurel II and marketplace factors *206 compels a finding that a 20% set-aside is the maximum permissible to engender the construction of lower income housing.
VII — THE LOW/MODERATE RATIO
The apportionment of the 699 units comprising Mahwah's fair share obligation has been set at 230 units of moderate and 469 units of low income housing. [9] Facially, it would appear this 2 to 1 ratio of low to moderate should be incorporated into the mandatory set-aside program by requiring two low for every moderate unit. During the rezoning process, the Master requested developers to structure their pro formas on the basis of providing 60% low and 40% moderate income units. Nevertheless, the submissions made and the ordinance enacted provided an even split: 50% moderate and 50% low.
Obviously, if all developments are built out at this ratio there will be a surplus of moderate and a shortage of low income units. Unless a total much greater than the fair share is provided, the prospective need for low income housing will not be met. For obvious economic reasons, none of the developers have challenged the 50%/50% split. Even the Urban League has adopted this position for the reasons set forth below in the report of Alan Mallach:
The 50/50 standard, which is supported in the Mount Laurel II decision implicitly at 309, reflects both practical and theoretical considerations. The practical grounds are straightforward: since each low income unit is substantially more financially burdensome for a developer, any increase in the number *207 of low income units makes the financial feasibility of the development, that much more problematical. This is extremely important, since (a) it is in the interest of the Mount Laurel remedy to make development feasible; and (b) there is a finite limit to the amount of additional cost which can be added to market units, where one is trying to develop a relatively affordable market-rate product. Moderate income units can be provided with a modest subsidy; low income units require a deep subsidy, perhaps as much as $20,000/unit.
If the 50/50 approach were dramatically at variance with the distribution of need, it might be necessary to reappraise the above point, and perhaps seek alternatives (a smaller overall percentage, perhaps, with more low income units than moderate income units). It is not seriously at variance with the need, for one compelling, although unfortunate, reason. The mandatory set-aside approach simply cannot subsidize units down to the level where the very poor can afford them. There is a de facto floor on the affordability of a unit provided through this approach, which is likely to be in the area of 40% of median at a minimum. If one looks at the distribution of households between 30% and 80% of median, rather than from 0% to 80%, one finds that the split is 60% moderate income and 40% low income.
This analysis might suggest that a 60% moderate/40% low split would be appropriate. This, however, is not the case, for two reasons. First, within the present need category, there is a disproportionate concentration of low income households, which dictates provision of more low income units. Second, the ability of low income households to find minimally acceptable housing at a price they can afford within the existing (used) housing market is substantially less than that of moderate income households. For these reasons, it is desirable to seek to meet a greater part of the low income need, within that income range which can be accommodated through the set-aside approach, than the moderate income need. Thus, the 50/50 approach appears to balance both practical and theoretical consideration.
It should be noted that Mallach's report goes on to identify an "intermediate" segment of the lower income population as those households earning between 50% and 65% of the median. He observes that affordable housing for this particular segment is often overlooked by municipalities and developers in the course of structuring Mount Laurel compliance strategies.
The Master dealt with this problem by requiring developers to target their prices, for planning purposes, toward households earning 65% and 50% of the median. This would allow for the price structure to be subsequently refined to a full range of income levels equally above and below these benchmarks without economic penalty to the developer; i.e., 30% to 50% for low income and 50% to 80% for moderate income. Thus, the rezoning *208 process in Mahwah has provided for the needs of a reasonably broad range of lower income levels.
With regard to the proportion of low versus moderate income units, the evidence established if more than 1/2 of these subsidized units are sold to low income households the resulting socio-economic composition of individual developments will adversely affect marketability. Accordingly, the township's requirement that developments include a minimum of 50% of the lower income units for low income households is at the reasonable maximum for proportionality. The proposed developments in Mahwah are each sufficient in size to accommodate a 50/50 distribution of low/moderate units.
VIII — REMOVING EXCESSIVE RESTRICTIONS AND EXACTIONS
The astronomically high cost of housing in New Jersey motivated the Supreme Court in Mount Laurel II to order the removal of all municipally-created barriers to construction of mandated lower income housing. When it rendered the decision in 1983, the Court had documentation before it that the average 1981 new home price in New Jersey had been $75,000, a figure affordable by only 1 in 20 families. 92 N.J. at 212 n. 6. Other factors indicated judicial intervention could significantly lower housing costs. For example, in 1972, evidence demonstrated the selling price of some new single-family homes could have been decreased from $57,618 to $33,843 by merely reducing lot size and frontage requirements. 92 N.J. at 259 n. 25.
In dealing with the problem, the Court specifically required elimination of zoning and subdivision restrictions and exactions not necessary for the protection of health and safety. In so doing, they recognized achieving the delicate balance between required cost reduction measures and protection of health and safety would be difficult in future cases. Guidelines were set instructing trial courts to consider updated standards in the construction field in conjunction with specific evidence submitted *209 by the parties to determine whether municipally-imposed housing costs have been sufficiently reduced. 92 N.J. at 259 . In the case of Mahwah, developers advocated specific ordinance revisions to achieve the required cost reduction and furnished a good deal of credible evidence on the subject. The municipality offered virtually no opposition on this point.
The evidence established house sales in Mahwah during 1984 have been averaging $150,000; in nearby Saddle River the average sales price is $450,000. The current price of housing in Northern Bergen County is shown in the 1984 Annual Survey of Bergen County Housing Developments:
Price Project Name Location Plot Size
$ 115,000 Tributary Woods Englewood 2713
$ 115,900 Willow Court Townhouses Englewood 2 acres
$ 174,900 West Woods Norwood 100 X 100
$ 179,900 Hemlock Estates Midland Park 100 X 150
$ 189,900 Fardale Estates Mahwah 24,800
$ 210,000 Midvale Estates River Vale 18,000
$ 229,900 West Woods Norwood 100 X 100
$ 279,000 Aris Estates Allendale 3/4 acre
$ 285,000 Manor Estates Washington Twsp. 1 acre
$ 298,900 Hidden Acre Estates Wyckoff 25,000
$ 300,000 Saddle Ridge Estates Upper Saddle River 1 acre
$ 320,000 Tivon Construction Woodcliff Lake 23,500
$ 344,900 Town & County Developers Woodcliff Lake 3/4 acre
$ 359,900 Five Oaks Haworth 45,000
$ 359,900 Town & County Developers Montvale 1 acre
$ 389,900 Town & County Developers Montvale 1 acre
$ 449,900 Lily Pond Franklin Lakes 1 acre
$ 449,900 Town & County Developers Upper Saddle River 1 acre
$ 450,000 Leonard Estates Franklin Lakes 1 acre
$ 475,000 Forest Ridge Upper Saddle River 1 acre
$ 525,000 Rio Vista Cresskill 1 acre
$ 648,000 Twinbrook Estates Saddle River 2.14 acres
$ 675,000 Urban Farms Franklin Lakes 1 acre
$ 685,000 Saddle River Estates Saddle River 2 acres
$ 685,000 High Ridge Saddle River 2 acres
$ 735,000 High Ridge Saddle River 2 acres
*210
$ 749,500 Powder Hill Estates Saddle River 2 acres
$ 750,000 Timberline Manor Alpine 2 acres
$ 759,000 Nigro Construction Co. Saddle River 2 acres
$ 995,000 High Ridge Saddle River 2 acres
$1,000,000 Rio Vista Alpine 2 acres
"The Well-to-do Buoy the Market," The Record (Hackensack, N.J.)
May 20, 1984, Section R at 2.
With a single exception, every witness who dealt with the subject recognized a tremendous demand for conventional housing in the Mahwah region at more affordable prices. [10]
Naomi D. Friedman, a local real estate broker testified prospective purchasers looking for housing under $100,000 are regularly directed to either Rockland County, New York or Central New Jersey. There was a unanimity of opinion that potential first-time home buyers with annual incomes of less than $30,000 are effectively cut out of the Mahwah market because no quality housing is currently being offered at an appropriate price range. [11]
*211 A Housing Market and Feasibility Analysis prepared for Beaver Creek by Real Estate Research Corporation verified the existence of a large market for housing at prices, expressed in 1983 dollars, from between $56,000 and $81,250 per unit. The report concluded smaller units in this price range will attract a diverse group of buyers, most with annual incomes in the $25,000 to $30,000 range. They found significant numbers of these potential home buyers live in Northwest Bergen County and are eager to purchase housing if it can be marketed in this price range.
Mandatory set-aside developments involve concepts totally different from those employed in building conventional projects. Townhouses currently being built in Mahwah at 4 or 6 to an acre at prices in excess of $100,000 are not suitable market rate units for Mount Laurel type development. Mixed income projects at 14 to an acre cannot be expected to compete with these low-density luxury developments. Market rate units must be priced below existing levels yet high enough to subsidize lower income units. Marketability becomes the key issue. All developers concurred in the findings of Real Estate Research Corporation and projected their sales prices for market rate units between the low $50,000's and high $80,000's. This reaches the untapped market of potential home buyers who cannot afford the current Mahwah prices but earn more than 80% of the region's median income. To provide a realistic *212 opportunity for builders to sell some units for as little as $50,000, subsidize others and still make a reasonable profit, requires Mahwah's ordinances be thoroughly cleansed of cost additive measures not necessary for health and safety.
Minimum standards relating to health and safety factors fall into many areas. Conceptually, local regulations in this field can be divided into two categories. There are the land planning provisions governing set-backs, placement of buildings, buffering, amount of open space, densities, etc., which are generally found in zoning codes. Subdivision and site plan ordinances usually set forth technical standards for performance criteria concerning construction of roadways and parking areas, surface drainage, land clearing and soil removal and other site improvements.
John Rahenkamp, an expert in landscape architecture and land planning was retained by Beaver Creek to review Mahwah's existing development codes. He is nationally recognized for his work in the area of reducing building costs through the use of innovative but proven techniques. Rahenkamp analyzed Ordinance #851 in light of other code requirements to determine whether the township had reduced unnecessary cost generating requirements to the extent required by Mount Laurel II.
He began by analyzing the design and engineering standards in Mahwah's ordinances relating to on-site improvements, then made a judgment as to whether each required improvement was really necessary for public health and safety. If unnecessary, it was eliminated. If necessary, he looked for less costly recognized engineering methods to produce the required results. His preference was to keep land in its natural state, allow for flexibility in site plan design, take advantage of natural contours and encourage innovative use of materials. This low technology approach, in his opinion, is equally as effective but less costly than traditional rigid site improvement requirements. Rahenkamp concluded Ordinance #851 failed to *213 comply with Mount Laurel II and the municipality's efforts resulted in only minimal savings. The Master concurred.
Other experts on behalf of developers also provided reports and testimony on the subject of cost reduction supplementing Rahenkamp's study. The municipality did not offer a single shred of evidence to contradict the recommended cost reduction provisions.
If traditional zoning laws were applicable, the more costly municipal requirements would be upheld as a reasonable exercise of governmental discretion and Rahenkamp's recommendations would carry no legal weight. Actually, the existing regulations may well be valid when applied to construction in other zones. However, in zones designated for the production of lower income housing, site plan and subdivision regulations are valid only if they eliminate all restrictions and exactions not necessary for the protection of health and safety. Consequently, the cost reduction provisions of Ordinance #851 as they affect Mahwah's development regulations must be evaluated under the new test set forth in Mount Laurel II.
Therefore, the Court's evaluation of each cost reduction provision contained in Ordinance #851, in light of the uncontradicted evidence presented, follows:
ORDINANCE #851 § 9A — PHASING
1. THE APPROVING AGENCY MAY REQUIRE THE CONSTRUCTION OF A DEVELOPMENT IN TWO OR MORE STAGES AND MAY PHASE THE CONSTRUCTION OF STAGES IN PERIODS OF TWO OR THREE YEARS BETWEEN ISSUANCE OF BUILDING PERMITS FOR EACH STAGE.
2. WITHIN THE ENTIRE DEVELOPMENT IF DEVELOPED IN ONE STEP, OR WITHIN EACH STAGE IF THE DEVELOPMENT IS A STAGED PROJECT, LOWER INCOME *214 HOUSING SHALL BE PHASED IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:
MINIMUM
PERCENTAGE OF TOTAL PERCENTAGE OF LOWER
DWELLING UNITS INCOME DWELLING UNITS
(BUILDING PERMITS) (CERTIFICATES OF OCCUPANCY)
25 10
50 25
75 50
100 100
THE ABOVE PERCENTAGE SHALL REFER TO THE PERCENTAGE OF TOTAL DWELLING UNITS HAVING FINAL SITE PLAN OR SUBDIVISION APPROVAL AND THE PERCENTAGE OF LOWER INCOME DWELLING UNITS COMPLETED AND CERTIFICATES OF OCCUPANCY ISSUED.
COMMENT: The purpose of Paragraph 1 is to lessen the impact of sudden development on the municipality. By controlling the pace of development, the township will be able to better manage off-site problems caused by new construction such as traffic, water supply and sewerage disposal. However, it can also be used as a tool to prevent construction of lower income housing by failing to issue building permits for periods of two or three years. The evidence established Mahwah's infrastructure is capable of handling the extent of new development required. The pace of construction should be governed by market conditions. This paragraph is unreasonable.
Paragraph 2 limits the issuance of building permits for market rate units until a set percentage of subsidized units have been sold. This is designed to prevent developers from selling only market rate units, harvesting a profit, then abandoning the project. The ordinance ratio, however, fails to take in account the need to allow the sale of market rate units at the beginning of a project in order to provide sufficient cash flow to subsidize the lower income units. The schedule below, recommended *215 by Rahenkamp, assures the construction of both types of housing in tandem while providing the builder with a more reasonable opportunity to develop.
Market Rate Housing Lower Income Housing
Percentage (Maximum) Percentage (Minimum)
Up to 25% 0% (none required)
25% + 1 unit At least 10%
Up to 50% At least 25%
Up to 75% At least 50%
75% + 1 unit At least 75%
Up to 100% 100%
ORDINANCE #851 § 9B — FEES AND WAIVERS OF FEES
1. THE APPLICABLE APPROVING AGENCY SHALL WAIVE SUBDIVISION AND SITE PLAN APPLICATION FEES FOR EVERY UNIT DESIGNATED AS LOWER INCOME HOUSING.
2. FOR ALL NON-LOWER INCOME UNITS THE FOLLOWING FEES SHALL ACCOMPANY THE APPROPRIATE APPLICATION.
A. FILING FEE FOR PRELIMINARY APPROVAL: ONE-HUNDRED DOLLARS ($100) PLUS FIVE ($5.00) DOLLARS FOR EACH PROPOSED DWELLING UNIT.
B. FILING FEE FOR FINAL APPROVAL: TWO DOLLARS AND FIFTY CENTS ($2.50) FOR EACH PROPOSED MARKET RATE DWELLING UNIT.
3. NOTWITHSTANDING ANY OTHER ORDINANCE REQUIREMENT OF THE TOWNSHIP OF MAHWAH, PROFESSIONAL AND LEGAL REVIEW FEES SHALL BE PROPORTIONATELY REDUCED BY THE PERCENTAGE OF LOWER INCOME UNITS CONTAINED IN THE DEVELOPMENT.
4. THE APPLICANT SHALL DEPOSIT THE SUM OF FIVE (5%) PERCENT OF THE COSTS OF SITE IMPROVEMENTS TO COVER ENGINEERING INSPECTION OR OTHER INSPECTIONS *216 OR REVIEW OF THE PROJECT. SUCH SUM SHALL BE IN THE FORM OF ESCROW ACCOUNTS IN AMOUNTS AND IN A FORM ACCEPTABLE TO THE APPROVING AGENCY. SUCH FUNDS SHALL BE USED BY THE TOWNSHIP ONLY FOR THE PURPOSES RELATING TO THE APPLICATION, AND SHALL BE EXPENDED ONLY FOR THE ACTUAL OUTLAYS INCURRED AS A RESULT OF THE APPLICATION. IF ACTUAL INSPECTION COSTS BASED UPON TIME AND EXPENSE RECORDS ARE LESS THAN THE FIVE (5%) DEPOSITED, THE BALANCE SHALL BE RETURNED TO THE APPLICANT. IF ACTUAL COSTS BASED UPON TIME AND EXPENSE RECORDS ARE MORE THAN THE FIVE (5%) PERCENT DEPOSITED, THE APPLICANT SHALL PAY THAT AMOUNT TO THE TOWNSHIP.
COMMENT: Paragraphs 1 and 2 result in a cost saving of only $7.50 per lower income unit.
Paragraph 3, while facially reducing review fees, makes no provision for payment of the difference by the municipality. Hence consulting professionals are expected to provide 100% of the work for only 80% of their standard fee. Since they set their own billing rates without outside control, this provision is still tantamount to issuing a blank check.
Although authorized by N.J.S.A. 40:55D-53(h), the 5% unstaged escrow fund in Paragraph 4 is unreasonable. At an estimated site improvement cost of $7,500 per unit, developers would have to post $375 in advance to cover inspection fees. In large projects, the escrow required sometimes exceeds design engineering fees and may exceed a quarter of a million dollars. Rahenkamp felt engineers in the public sector, whose only function is to make inspections, should not be paid more than 20% of the amount paid to the engineers who design and supervise the entire project.
In New York City, Abeles pointed out, self-inspection by engineers and architects in the employ of private builders is *217 permitted, eliminating this cost entirely. The experience in New York City shows the public interest has been adequately protected because these professionals are required to certify their findings at the risk of losing their licenses and must carry malpractice insurance.
A 1983 study by Passaic and Bergen County civil engineers indicates professional review services can be obtained at from $30 to $75 per unit. An escrow requirement in excess of that range will unnecessarily add to the ultimate cost of housing. Section 9B fails to recognize the need for either set inspection fees or open bidding in Mount Laurel II projects.
ORDINANCE #851 § 9C — APPLICATION PROCEDURE FOR DEVELOPMENT IN THE ML-1 OR ML-2 ZONE
1. AN APPLICANT FOR DEVELOPMENT IN THE ML-1 OR ML-2 ZONE SHALL SUBMIT REQUIRED PLANS AND DOCUMENTS TO THE APPROVING AGENCY FOR REVIEW AND APPROVAL AS REQUIRED BY THE TOWNSHIP OF MAHWAH SUBDIVISION AND SITE PLAN ORDINANCES. THE APPROVING AGENCY SHALL DISTRIBUTE THE PLANS TO THOSE AGENCIES REQUIRED BY LAW TO REVIEW AND/OR APPROVE DEVELOPMENT PLANS AND TO TOWNSHIP AGENCIES WHICH NORMALLY REVIEW DEVELOPMENT PLANS.
2. THE APPROVING AGENCY SHALL HOLD A PUBLIC HEARING ON THE APPLICATION. THE HEARING SHALL BE HELD NOT LESS THAN THIRTY (30) DAYS NOR MORE THAN FORTY-FIVE (45) DAYS FROM THE DATE OF SUBMISSION OF A COMPLETE APPLICATION.
3. NOTWITHSTANDING ANY OTHER ORDINANCE REQUIREMENT OF THE TOWNSHIP OF MAHWAH OR N.J.S.A. 40:55D-46 OR N.J.S.A. 40:55D-48, THE TIME PERIOD FOR OFFICIAL ACTION ON COMPLETE SUBDIVISION AND SITE PLAN APPLICATIONS FOR PRELIMINARY APPROVAL SHALL BE SEVENTY FIVE (75) DAYS UNLESS *218 THE APPLICATION IS FOR LESS THAN 10 LOTS OR LESS THAN 10 ACRES OR UNLESS THE APPLICANT CONSENTS TO AN EXTENSION OF TIME.
4. IN ADDITION TO MATERIAL SUBMITTED FOR REVIEW AS REQUIRED BY THE TOWNSHIP OF MAHWAH SUBDIVISION AND SITE PLAN ORDINANCES, THE APPLICANT MUST ALSO SUBMIT A HOUSING PLAN DETAILING THE TYPE, SALE, AND RENTAL SCHEDULE FOR ALL HOUSING UNITS. THIS PLAN SHALL INCLUDE BUT NOT BE LIMITED TO INFORMATION ACCORDING TO THE FOLLOWING:
1. MARKETING OF UNITS
2. SALE PRICE AND RENT SCHEDULE
3. NUMBER OF UNITS TO BE SOLD AND/OR RENTED
4. NUMBERS OF BEDROOMS
5. SQUARE FOOTAGE OF UNITS
6. OTHER REASONABLE INFORMATION AS REQUIRED BY MAHWAH HOUSING COMMISSION AND/OR PLANNING.
COMMENT: Section 9C represents a bona fide effort by Mahwah to establish a fast track procedure for Mount Laurel II applications. It requires the Planning Board to hold a hearing and act within 75 days following receipt of a completed application instead of the 95 days provided in N.J.S.A. 40:55D-46(c). However, this provision fails to establish a mechanism to process these applications in an expedited manner. Developers are still required to obtain approvals from municipal agencies not subject to time limits set forth in the Municipal Land Use Law. The date an application is deemed complete can be delayed for a number of reasons beyond the applicant's control. For example, Mahwah ordinances require obtaining Environmental Impact Statements from the Municipal Environmental Commission and soil removal permits from the Township Committee. These bodies should be required to act promptly and report specific objections early in the process.
The interjection of the Mahwah Housing Commission into the review process merely adds another layer to the existing bureaucracy. *219 Rahenkamp testified developers are reluctant to assert their statutory right to have applications granted because of the failure of planning boards to act in the time required. Rather than face certain litigation, they have in the past preferred to grant extensions.
The Planning Board cannot be expected to continue its normal work and process Mount Laurel II applications within this short time frame. Lay members of the Planning Board should receive assistance from independent technical experts in handling preliminary matters. An entirely new procedure is required to accomplish the desired fast-track processing.
ORDINANCE #851 § 9D — DEVELOPMENT STANDARDS
1. GROSS DENSITY SHALL NOT EXCEED FOURTEEN (14) DWELLING UNITS PER ACRE.
COMMENT: William F. Murphy, an architect, and planner for Kilmer Woods, testified other provisions in Ordinance #851 make it impossible to design for this density even on a trouble-free site.
However, this provision is reasonable provided it is interpreted to allow more than 14 units per acre in certain areas, as long as the overall density of the project does not exceed 14 units per acre.
2. NO MORE THAN EIGHTEEN (18) DWELLING UNITS SHALL BE PERMITTED WITHIN A RESIDENTIAL STRUCTURE.
COMMENT: The most cost efficient structure which can be built today is a 3 story condominium flat containing 24 units. All developers have included this type of dwelling in their proposals because it allows back-to-back construction with common stairways which comply with the BOCA Code. Fire rating and construction materials, rather than an arbitrary number, should govern the units per building.
3. SETBACKS AND BUFFER ZONES.
*220 A. FROM A COLLECTOR STREET — 35 FOOT SETBACK
B. FROM ALL TRACT LOT LINES:
1. FOR TRACTS LESS THAN 5.0 ACRES — A MINIMUM SETBACK OF 20 FEET SHALL BE REQUIRED IN THE ML-1 AND ML-2 ZONES.
2. FOR TRACTS GREATER THAN 5.0 ACRES — A MINIMUM BUFFER OF 50 FEET AND A MAXIMUM BUFFER OF 100 FEET SHALL BE PROVIDED IN ALL ML-2 ZONES.
THE APPROVING AUTHORITY SHALL CONSIDER THE FOLLOWING PERFORMANCE STANDARDS: TOPOGRAPHY OF AREA, EXTENT OF NATURAL GROUND COVER, RELATIVE LOCATION OF PROPOSED STRUCTURES, LOCALIZED DENSITY, NATURE OF ADJACENT ZONE AND LAND USES, EXTENT OF PEDESTRIAN AND VEHICULAR ACTIVITY AND ANY OTHER SITE CONDITION FACTORS DEEMED RELEVANT BY THE APPROVING AGENCY.
THE USE OF SITE SCREENING DESIGN DEVICES SUCH AS BERMS, SPECIALIZED LANDSCAPING, FENCING, AND OTHER SIMILAR DEVICES SHALL BE ENCOURAGED BY THE APPROVING AGENCY. IN THE ML-1 ZONE, SAID BUFFER SHALL BE A MINIMUM OF 35 FEET AND A MAXIMUM OF 50 FEET, SUBJECT TO THE PERFORMANCE STANDARDS NOTED ABOVE.
FOR TRACTS GREATER THAN 5.0 ACRES IN THE ML-1 ZONE, SAID BUFFER SHALL BE A MINIMUM OF 35 FEET AND A MAXIMUM OF 50 FEET SUBJECT TO THE PERFORMANCE STANDARDS SPECIFIED HEREIN.
C. RESIDENTIAL STRUCTURES SHALL BE SET BACK NO LESS THAN TWENTY-FIVE (25) FEET FROM ANY PAVED VEHICULAR TRAVELED WAY OR PARKING AREA.
COMMENT: The 35 foot set back in Paragraph A is overly rigid, wastes space and adds costs. A 20 foot set back from collector streets would be adequate.
*221 A sliding scale of set backs, from between 20 and 50 feet, depending upon adjacent zoning is more appropriate than the 50 to 100 feet provided in Paragraph B. The performance standards to be considered by the approving agency in setting particular buffer distances are in accord with the current state of the art.
Paragraph C, however, requires excessive cost producing site clearing. A 10 foot set back from paved roadways would allow sufficient area for landscaping and walkway; the 25 foot minimum forces buildings toward the external property boundaries and may cause an encroachment toward neighboring residences.
4. BUILDING HEIGHT
NO STRUCTURE SHALL EXCEED THE LESSER OF THREE (3) STORIES OR THIRTY-FIVE (35) FEET IN HEIGHT.
COMMENT: The 3 story maximum is reasonable; the 35 foot height limitation is not. An increase to 40 feet would give architectural flexibility and permit construction of gable roofs while complying with the BOCA Code.
5. DISTANCE BETWEEN BUILDINGS
THE MINIMUM DISTANCE BETWEEN ANY TWO BUILDINGS SHALL NOT BE LESS THAN THE AVERAGE HEIGHT ABOVE FINISHED GRADE OF THE HIGHER OF TWO OPPOSING WALLS, BUT SHALL IN NO CASE BE LESS THAN 20 FEET.
COMMENT: The 20 foot minimum is standard for emergency vehicle access. The additional distance, if the building height test is applied, is cost generating because the additional width will increase the linear feet of utilities without providing corollary public benefit.
6. PARKING REQUIREMENTS
A. PARKING STALLS SHALL MEASURE NOT LESS THAN NINE (9) FEET IN WIDTH AND EIGHTEEN (18) FEET IN LENGTH.
*222 B. THERE SHALL BE A MINIMUM OF ONE AND ONE HALF (1 1/2) PARKING SPACES PROVIDED FOR EACH ONE BEDROOM DWELLING UNIT AND TWO (2) PARKING SPACES FOR ALL OTHER DWELLING UNITS.
C. THE WIDTH OF ALL AISLES PROVIDING DIRECT ACCESS TO INDIVIDUAL PARKING STALLS SHALL NOT BE LESS THAN:
PARKING ANGLE AISLE WIDTH
0 DEG. 12'
30 " 12'
45 " 13'
60 " 18'
90 " 24'
D. ONLY ONE-WAY TRAFFIC SHALL BE PERMITTED IN AISLES SERVING PARKING SPACES PLACED AT AN ANGLE OTHER THAN 90 DEGREES.
COMMENT: The Mahwah Site Plan Review Ordinance ( Mahwah Code § 145) requires parking stalls measure not less than 10 feet in width by 20 feet in length. The new requirement of 9 by 18 is equivalent to the top of the range of acceptable sizes according to research studies of the Urban Land Institute and National Association of Home Builders. The nationally recognized recommended size is 8.5 by 17. Paragraph A results in 15%-18% less paving which lowers the cost of parking lot construction and storm water detention.
Paragraph B reduces the present requirement of 2 parking spaces for each dwelling unit to 1.5 spaces for 1 bedroom units, but does not affect larger units.
There was no adverse testimony about any of these provisions which are both reasonable and cost reducing.
7. PEDESTRIAN WALKWAYS
ALL RESIDENTIAL DEVELOPMENTS SHALL PROVIDE A SYSTEM OF CONTINUOUS PAVED WALKWAYS NOT LESS THAN FIVE (5) FEET IN WIDTH LINKING PRIMARY RESIDENTIAL ENTRANCES TO OFF-SITE TOWNSHIP, *223 COUNTY OR STATE ROADS. SUCH WALKWAYS NEED NOT PARALLEL STREETS OR DEDICATED ROADS. THE WALKWAY SYSTEM SHALL LINK-UP WITH ADJACENT PUBLIC FACILITIES WHERE FEASIBLE. SIDEWALKS SHALL BE PROVIDED ADJACENT TO COLLECTOR STREETS.
COMMENT: In well planned developments, as much as 50% of conventionally required walkways can be eliminated at substantial cost savings with no harm to residents. In most instances 4 feet in width is adequate. Basically, this provision appropriately deals with the subject matter by greater reducing excessive sidewalk requirements. Rahenkamp suggests bike paths may be more desirable than walkways in some locations.
8. REFUSE COLLECTION AND STORAGE
PROVISION SHALL BE MADE FOR THE PROPER STORAGE AND COLLECTION OF REFUSE AND SHALL BE WITHIN AN ENCLOSED BUILDING OR STRUCTURE OF APPROPRIATELY SCREENED AND LANDSCAPED, AND SHALL BE REASONABLY ACCESSIBLE FOR VEHICULAR COLLECTION.
COMMENT: A reasonable provision.
9. COMMON OPEN SPACE REQUIREMENTS
A. A MINIMUM OF TWENTY (20) PERCENT OF THE LAND AREA OF ANY DEVELOPMENT OTHER THAN SINGLE OR TWO-FAMILY HOUSING AND WHICH MAY INCLUDE ENVIRONMENTALLY RESTRICTED LAND, SHALL BE DESIGNATED FOR CONSERVATION, OPEN SPACE, RECREATION AND/OR OTHER COMMON OPEN SPACE.
B. ALL PROPERTY OWNERS AND TENANTS SHALL HAVE THE RIGHT TO USE THE COMMON OPEN SPACE.
C. ALL COMMON OPEN SPACE DEEDED TO AN OPEN SPACE ORGANIZATION, TRUST OR PRIVATE ORGANIZATION, *224 SHALL BE OWNED AND MAINTAINED AS PROVIDED FOR IN N.J.S.A. 40:55D-43.
D. COMMON OPEN SPACE MAY INCLUDE TRACT SETBACK AREAS FOR COMPUTATION PURPOSES. SUCH SPACE SHALL BE READILY ACCESSIBLE TO ALL RESIDENTS OF THE DEVELOPMENT, AND NO AREA DESIGNATED AS OPEN SPACE SHALL BE LESS THAN THIRTY-FIVE (35) FEET IN WIDTH.
COMMENT: In Paragraph C, the municipality has elected not to require developers to deed open space to the township. This leaves the burden of future maintenance with the residents of these Mount Laurel II developments and will increase monthly payments. Nevertheless, this is a valid exercise of municipal discretion.
The other common open space requirements are reasonable except for the 35 foot wide minimum in Paragraph D which is unwarranted and unrelated to public health and safety.
10. DRAINAGE
A. STORM SEWERS, OPEN CHANNELS, BRIDGES, AND CULVERTS SHALL BE DESIGNED FROM MINIMUM FLOW CAPACITIES AS FOLLOWS:
DESIGN CAPACITY FREQUENCY OF STORMS
COLLECTION SYSTEMS 15 YEARS
CULVERTS 25 YEARS
DETENTION SYSTEMS 25 YEARS
EMERGENCY SPILLWAY SYSTEM
FROM DETENTION SYSTEM 100 YEARS
PROJECTS REQUIRING A DEP
STREAM ENCROACHMENT PERMIT 100 YEARS
B. ALL MATERIALS USED IN THE CONSTRUCTION OF (SEWERS) BE IN ACCORDANCE WITH THE SPECIFICATIONS OF THE "STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION OF THE NEW JERSEY HIGHWAY DEPARTMENT" CURRENT EDITION, AND *225 ANY SUPPLEMENTS AND MODIFICATIONS THEREOF UNLESS OTHERWISE SPECIFIED BY THE REVIEWING MUNICIPAL AGENCY.
C. SURFACE WATER RUNOFF SHALL BE REGULATED BY SECTION 145-25(J) AND 154-30(C) OF THE CODE OF THE TOWNSHIP.
D. WHERE REQUIRED BY THE TOWNSHIP AND AS INDICATED ON AN IMPROVED DEVELOPMENT PLAN, A DRAINAGE RIGHT-OF-WAY EASEMENT SHALL BE PROVIDED TO THE TOWNSHIP WHERE A TRACT OR LOT IS TRAVERSED BY A DRAINAGE SYSTEM, CHANNEL OR STREAM. THE DRAINAGE RIGHT-OF-WAY EASEMENT SHALL CONFORM SUBSTANTIALLY WITH THE LINES OF SUCH WATERCOURSE AND, IN ANY EVENT, SHALL MEET ANY MINIMUM WIDTHS AND LOCATIONS AS SHOWN ON ANY OFFICIAL MAP AND/OR MASTER PLAN OR AS RECOMMENDED BY THE TOWNSHIP ENGINEER.
COMMENT: Prior to Ordinance #851, drainage was regulated by identical provisions in the Site Plan Review and Subdivision Ordinances. Both Mahwah Code § 145-25(j) and § 154-30(c) provided: "Development shall not create more than zero (0%) percent increase in surface water run-off." While the changes made in the above provisions are not objectionable, Rahenkamp recommended adoption of additional specific cost saving measures.
The New Jersey Soil Erosion and Sediment Control Act ( N.J.S.A. 4:24-39 et seq.) and the New Jersey Storm Water Management Act ( N.J.S.A. 40:55D-93 et seq.) have, to some extent, pre-empted municipal control in this area. Storm water drainage systems in every type of development must be designed to carry the 100 year frequency storm with a duration of 24 hours. One recognized method employs primarily pipes, inlets and other capital intensive structural solutions. Another, at a substantial reduction in cost, uses a series of drainage swales conforming to the natural contour of the land whenever possible. *226 Rahenkamp believes the low technology alternative can be implemented on most sites to provide an equally effective solution to the management of storm water run-off if the following methodology is permitted:
(a) That surface runoff be permitted to enter streets from the front yards of residences; (b) That runoff from and along streets be carried by turf swales or standard curb and gutter at minimal grades and discharges into drainage swales, natural drainage courses, and retention ponds; (c) That street drainage not be allowed to cross local street intersections; (d) That storm sewers be designed for minimum number of inlets and pipes; (e) That surface runoff from rear yards of residences be collected in drainage easements and the open space drainage system; (f) That surface runoff from multi-family areas be collected in drainage swales and/or storm sewers, depending on volume and velocity standards; (g) That drainage swales be designed to carry runoff within each drainage area according to the best methods for preserving the natural character of the site; (h) That detention ponds be designed to retain and control increased stormwater runoff based on a 100-year storm frequency of 20 minutes duration and an intensity of 6.2 inches per hour; (i) That sediment basins and detention ponds be designed and constructed to provide for sediment storage and a minimum permanent pool water depth of 4 feet, and/or adequate flood storage capacity as established by the Standards for Soil Erosion and Sediment Control in New Jersey.
11. LIGHTING
A. STREET LIGHTING SHALL BE PROVIDED FOR ALL STREET INTERSECTIONS AND ALONG ALL COLLECTOR AND LOCAL: STREETS, PARKING AREAS, AND ANYWHERE ELSE DEEMED NECESSARY FOR SAFETY REASONS.
B. ANY OUTDOOR LIGHTING SUCH AS BUILDING AND SIDEWALK ILLUMINATION, DRIVEWAYS WITH NO ADJACENT PARKING, THE LIGHTING OF SIGNS, AND ORNAMENTAL LIGHTING, SHALL BE SHOWN ON THE LIGHTING PLAN IN SUFFICIENT DETAIL TO ALLOW A DETERMINATION OF THE EFFECTS UPON ADJACENT PROPERTIES, ROADS, AND TRAFFIC SAFETY FROM GLARE, REFLECTION, AND OVERHEAD SKY GLOW IN ORDER TO RECOMMEND STEPS NEEDED TO MINIMIZE THESE IMPACTS.
*227 C. SPECIFIC LIGHTING REQUIREMENTS. THE MAXIMUM INTENSITY OF LIGHTING PERMITTED ON ROADWAYS SHALL BE AS FOLLOWS:
AVERAGE MAINTAINED HORIZONTAL ILLUMINATION FOR RESIDENTIAL
AREAS:
STREET INTERSECTIONS 3.0 FOOTCANDLES
PARKING AREAS 1.0 FOOTCANDLES
COMMENT: The detailed lighting requirements spelled out in Mahwah Code § 145-28 of the Site Plan Review Ordinance and the above modifications are reasonable.
12. SANITARY SEWERS
THE DEVELOPER SHALL DESIGN AND CONSTRUCT SANITARY SEWER FACILITIES IN ACCORDANCE WITH THE N.J.D.E.P. PERMIT REQUIREMENTS AND IN SUCH MANNER AS TO MAKE ADEQUATE SEWAGE TREATMENT AVAILABLE TO EACH LOT AND STRUCTURE WITHIN THE DEVELOPMENT. IF A PUBLIC OR PRIVATE TREATMENT AND COLLECTION SYSTEM IS INCLUDED AS PART OF A DEVELOPMENT APPLICATION, THE DEVELOPER SHALL INSTALL SEWERS, INCLUDING CONNECTIONS TO EACH UNIT TO BE CONSTRUCTED.
COMMENT: Mahwah does not have the authority to deviate from Department of Environmental Protection standards in the area of sanitary sewers. The requirement that private collection systems include separate connections to each unit is unnecessarily cost generating. Single connections to service individual buildings are equally acceptable and substantially less costly. Robert D. McAuliffe, Kilmer Woods' expert in this field, testified "ganging" of sewers would save $416,400 in that development alone.
13. STREETS
A. ALL DEVELOPMENTS SHALL BE SERVED BY PAVED STREETS IN ACCORDANCE WITH THE APPROVED *228 SUBDIVISION AND/OR SITE PLAN AND ALL SUCH STREETS SHALL HAVE ADEQUATE DRAINAGE.
B. LOCAL STREETS SHALL BE PLANNED SO AS TO DISCOURAGE THROUGH TRAFFIC.
C. THE MINIMUM PUBLIC STREET RIGHT-OF-WAY AND CARTWAY AND THE MINIMUM PRIVATE STREET CARTWAY SHALL BE IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:
R.O.W. CARTWAY
1. COLLECTOR STREET 50' 26'
2. LOCAL STREET SERVING SINGLE
OR TWO FAMILY DETACHED
DWELLINGS WITH NO ON-STREET
PARKING 40' 24'
3. LOCAL STREET SERVING MULTI-FAMILY
OR TOWNHOUSES WITH
ATTACHED GARAGES OR OFF-STREET
PARKING AND WITH NO
ON-STREET PARKING 40' 24'
4. LOCAL STREET SERVING MULTI-FAMILY
OR TOWNHOUSES WITH
PARALLEL ON-STREET PARKING
ONE SIDE ONLY. 40' 30'
D. STREET INTERSECTIONS SHALL BE AS NEARLY AT RIGHT ANGLES AS IS POSSIBLE AND IN NO CASE SHALL BE LESS THAN 80 DEGREES. APPROACHES TO ALL INTERSECTIONS SHALL FOLLOW A STRAIGHT LINE FOR AT LEAST 100 FEET OR A CURVE WITH A RADIUS OF NOT LESS THAN 600 FEET. NO MORE THAN TWO STREETS SHALL MEET OR INTERSECT AT ANY POINT AND THE CENTERLINES OF BOTH INTERSECTING STREETS SHALL PASS THROUGH A COMMON POINT.
E. A TANGENT OF AT LEAST 100 FEET SHALL BE PROVIDED BETWEEN REVERSE CURVES ON COLLECTOR STREETS.
*229 F. CUL-DE-SACS SHALL BE NO MORE THAN 1,000 FEET IN LENGTH AND SHALL PROVIDE ACCESS TO NO MORE THAN 80 DWELLING UNITS. A TURNAROUND SHALL BE PROVIDED AT THE END OF THE CUL-DE-SAC WITH A PAVED TURNING RADIUS OF 40 FEET AND A R.O.W. IN THE CASE OF PUBLIC STREETS OF 100 FEET.
G. THE PAVEMENT STANDARD FOR ALL ROADS SHALL BE AS FOLLOWS:
I. AN UNYIELDING WELL COMPATED SUBGRADE.
II. A FOUR (4) INCH THICK MACADAM BASE COURSE CONSISTING OF TWO AND ONE-HALF (2 1/2) INCH DIAMETER STONES BOUND WITH DUST.
III. A TWO (2) INCH THICK BITUMINOUS STABILIZED BASE COURSE, N.J.D.O.T. MIX #I-2.
IV. A ONE AND ONE-HALF (1 1/2) INCH THICK BITUMINOUS CONCRETE SURFACE COURSE, N.J.D.O.T. MIX #I-5.
V. ALL MATERIALS SHALL MEET THE REQUIREMENTS AND SHALL BE INSTALLED IN ACCORDANCE WITH "STANDARD SPECIFICATION FOR ROAD AND BRIDGE CONSTRUCTION OF THE NEW JERSEY HIGHWAY DEPARTMENT" CURRENT EDITION, AND ANY SUPPLEMENTS, AND MODIFICATIONS THEREOF UNLESS OTHERWISE SPECIFIED BY THE REVIEWING AGENCY.
H. STREET GRADES
GRADES FOR COLLECTOR STREETS SHALL NOT EXCEED EIGHT (8) PERCENT AND GRADES FOR LOCAL STREETS SHALL NOT EXCEED TEN (10) PERCENT. NO STREET SHALL HAVE A GRADE LESS THAN 0.5 PERCENT.
COMMENT: Mahwah Code § 145-31 requires extensive use of sidewalks and curbing in connection with all street improvements. Paragraphs A and B are reasonable; Paragraph C *230 providing the 24 foot cartway for local streets serving multi-family or townhouse units with parking on one side only is reduced to 20 feet, is also adequate. However, despite the size of the right-of-way, local streets designed for no parking should be no wider than 20 feet. Wider streets attract parking regardless of signs and, as a result, become hazardous. Narrower streets are visually recognized as local residential streets, discourage parking, and reduce speeding.
Paragraphs D, E and F are reasonable provided the approving authority is given sufficient flexibility in granting waivers where appropriate.
The pavement standard adopted in Paragraph G is reasonable if developers are granted the option to use suitable alternative materials which conform with N.J. DOT specifications.
Paragraph H increases the permitted grade on local streets from 8% to 10%. Rahenkamp believes there is no safety reason to prohibit grades up to 15% in areas with no permitted parking and no intersections.
Mahwah's requirement that curbing be installed for all parking areas and all roadways is unnecessarily costly. Alternatives to the extraordinarily expensive curb should be considered for purposes of pavement edge protection and separation of people from automobile traffic. Rahenkamp testified equally effective low technology methods can accomplish these purposes at a fraction of the cost. In his opinion, curbing cannot be justified as a safety barrier because in most instances, vehicles striking curbs will mount them out of control. The alternative solution to unraveling blacktop edges is to simply run the base out 18 to 24 inches beyond the asphalt edge. Curbs should only be utilized at intersections and on steep grades. To illustrate his point, Rahenkamp noted there are no curbs on the Garden State Parkway.
*231 14. WATER SUPPLY
WATER MAINS AND CONNECTIONS LINES SHALL BE CONSTRUCTED IN SUCH A MANNER AS TO MAKE ADEQUATE WATER SERVICE AVAILABLE TO EACH BUILDING OR LOT WITHIN THE DEVELOPMENT. THE SYSTEM SHALL BE DESIGNED AND CONSTRUCTED IN ACCORDANCE WITH REQUIREMENTS AND STANDARDS OF THE AGENCY OR AUTHORITY HAVING WATER SUPPLY JURISDICTION. FIRE HYDRANTS SHALL NOT BE MORE THAN 500 FEET APART.
COMMENT: The water system in Mahwah is operated by a Water Department functioning under the control and jurisdiction of the Township Committee. Mahwah Code § 176-1 et seq. It is an integrated system consisting at present of 5 wells with a capacity of 5,000,000 gallons per day. The municipal wells are not scattered throughout the township but, rather, are all located along the Ramapo River where geological factors are most favorable. The largest consumer of water in the past had been the Ford Plant which is closed; the Abex Company, another large user, is in the process of shutting down. The water system is functioning adequately at present and has the capacity to serve a much larger population. Three factors attest to this conclusion: (1) the municipality is currently selling 255.5 million gallons of water a year to the neighboring municipality of Ramsey under a contract in effect since February 25, 1980; (2) The Northwest Bergen County Sewer Authority designed Mahwah's sewerage system based upon an estimated population of 28,000 people; and (3) no previous proposed development has been denied Planning Board approval based on inadequate water supply.
Peter Popoff, Mahwah's Water and Sewer Engineer, studied the existing system to determine the capacity and added cost of supplying water and sewerage to the proposed Mount Laurel II developments. Not knowing which projects would ultimately be approved, he estimated costs based on the assumption a new well would be required for each project. He testified his estimates would have to be revised downward once the extent *232 of development and nature of required improvements are determined. His off-site sewer and water improvement cost estimate ran as high as $1.5 million for High Debi Hills. However, the issue of cost aside, all experts agreed Mahwah's water and sewer systems have the requisite capacity to service all the proposed new developments.
Not addressed by Ordinance #851, but discussed during the trial, is the issue of utility costs. Major off-site improvements, where required, should be constructed in the most cost efficient manner and paid for in accordance with the statutory mandate of N.J.S.A. 40:55D-42 and principles set forth in Divan Builders v. Wayne Tp. Planning Board, 66 N.J. 582 (1975). There is no evidence in this case to justify exempting these developers from paying a reasonable portion of major off-site improvement costs necessitated by their construction.
The uncontradicted testimony, however, established other utility charges are apparently excessive as compared to the cost in other municipalities. There is a sewer connection charge ranging from $280 for 1 bedroom or efficiency apartments to $350 for 3 or more bedroom apartments set forth in Ordinance #855. There is a water capacity charge for new construction from $520 for a 1 bedroom or efficiency apartment to $700 for a 3 or more bedroom apartment and a tapping charge ranging from $300 to $550 in Mahwah Code § 176-6. Rahenkamp calculated the total of utility and hook-up fees will average $1,575 per unit. These fees, as they affect market rate units, must be reviewed in light of the methodology approved in White Birch Realty Corp. v. Gloucester Tp. Municipal Utilities, 80 N.J. 165 (1979) and must be waived entirely for subsidized units. See also Luv Condominiums Ass'n. v. Stanhope, 192 N.J.Super 159 (App.Div. 1983).
15. WAIVERS
THE APPROVING AGENCY WHEN REVIEWING APPLICATIONS FOR ML-1 AND ML-2 DEVELOPMENT SHALL HAVE THE POWER TO GRANT EXCEPTIONS TO THE *233 ABOVE DESIGN REQUIREMENTS AS MAY BE REASONABLE AND WITHIN THE GENERAL PURPOSE AND INTENT OF THE ML ZONES IF THE LITERAL ENFORCEMENT OF ONE OR MORE OF THE PROVISIONS IS IMPRACTICABLE OR WILL EXACT UNDUE HARDSHIPS BECAUSE OF PECULIAR CONDITIONS PERTAINING TO THE LAND IN QUESTION.
This provision is a positive measure which allows for flexibility by the approving agency in reviewing applications. It is in line with N.J.S.A. 40:55D-39(b) and 40:55D-40(b), which reflect the Legislature's intent to encourage economy in layout and design rather than adherence to rigid requirements. Waivers which result in cost reduction should be granted by the Planning Board unless there are clear health and safety reasons to the contrary.
Rahenkamp criticized two ordinances dealing with matters not addressed by Ordinance #851 as detrimental to the production of lower income housing. Mahwah Code § 145-24 requires developers submit a copy of their application to the Mahwah Environmental Commission. Within 15 days from receipt of the application, the Commission must notify the developer whether it must furnish an Environmental Impact Statement. This statement requires extensive information, involves large expenditures and, in some instances, calls for long open-ended studies. Mount Laurel II invalidated an ordinance provision calling for this type of exhaustive study by developers in this context. See 92 N.J. at 304, n. 54 . In addition, the sites involved in this litigation have been subjected to thorough scrutiny, much of the data which would normally be required by an Environmental Impact Statement has already been furnished. If the Mahwah Environmental Commission is to be involved in the approval process, the burden should be upon it to ask for specific environmental protective measures in a timely manner. Mahwah Code § 145-24 as applied to Mount Laurel II developments is unreasonable.
*234 Another potential cause for delay is found in Mahwah Code § 148, which requires developers to obtain soil removal permits from the Township Committee. The Governing Body has retained jurisdiction over this basic developmental function eliminating both the Planning Board and the time constraints imposed by the Municipal Land Use Law. Developers, while processing applications before the Planning Board, are compelled to shuttle back and forth between it and the Township Committee seeking the same approvals. Although "soil mining" is a proper subject for regulation and the requirement of filing detailed soil removal plans is reasonable, Mahwah Code § 148 is unreasonable as applied to Mount Laurel II development because of its propensity to cause costly delays.
The price of housing is directly related to the amount of time it takes to complete a project. Processing delays cause substantial cost increases which are ultimately passed on to the consumer. Notwithstanding the remedial provisions in the Municipal Land Use Law, administrative delay is still considered a major contributing factor to increased housing costs. Rahenkamp reported additional costs of up to $4,000 per dwelling unit (in 1979 dollars) can result from each year of delay.
The evidence established the need for a more efficient method of processing Mount Laurel II applications. Expenses engendered by protracted municipal proceedings must be reduced if housing is to be sold at affordable prices in Mahwah. [12] A methodology to achieve these savings was an integral part of Rahenkamp's recommendations.
Rahenkamp's conclusions about the cost effectiveness of Ordinance #851 compared to savings he believes can be accomplished without jeopardizing public health and safety, are shown on the chart below:
*235
ESTIMATED SAVINGS FROM:
Mahwah Rahenkamp's
Ordinance Recommendations
Activity Category #851
---------------------------------------------------------------------------
1. Streamlined Review and
Approval Procedure $ 8,000 $ 77,600
2. Reduced Municipal Fees and
Escrow Funds $ 563 $ 170,563-195,563
3. Modernized Site Development
Standards $120,551 $ 563,725
4. Reduced Utility System
Access Fees $ 0 $ 483,575
________ _______________
TOTAL SAVINGS $129,114 $1,295,463-1,320,463
SAVINGS PER UNIT $ 344 $ 3,455-3,521
Testimony indicates cost reductions of up to $3,500 per unit can be accomplished by removing requirements not necessary for the protection of public health and safety. Ordinance #851 will result in savings of approximately $350 per unit. This measure fails to remove excessive restrictions and exactions to the extend mandated by Mount Laurel II.
IX — FINDINGS-MANDATORY SET ASIDE PROVISIONS
All the provisions in Ordinance #851 relating to mandatory set-aside development are invalid for the following reasons:
1. § 4 fails to provide a reasonable opportunity for construction of a sufficient number of lower income units. Only three tracts, Kilmer Woods, Franklin Commons West and Lotito were designated ML-2. At the ordinance-required density of 14 units per acre and applying a 25% set-aside, the maximum number of lower income units produced would be 379. A total of 706 units must be provided through mandatory set-aside provisions.
2. Section 7(1) by requiring a 25% mandatory set-aside inhibits the likelihood of construction.
*236 3. The ordinance, in its entirety, fails to remove excessive restrictions and exactions to the extent required by Mount Laurel II.
4. The ordinance fails to establish a mechanism to insure the expeditious processing by the municipality of developers' proposals for Mount Laurel II housing.
Therefore, it becomes the Court's sole responsibility to enforce Mahwah's constitutional obligation to provide the private sector with a reasonable opportunity to produce 706 units of lower income housing. Nevertheless, since the municipal officials have made a bona fide attempt to comply with the Court's rezoning order, great weight will be afforded to the planning choices enunciated in the ordinance. In that regard, the proposal of each Plaintiff-Intervenor must be weighed in the light of Mount Laurel II and the municipality's stated planning desires. The remedies to be afforded in order to achieve compliance must be carefully measured against the potential negative impact upon the residents of the municipality.
Aside from Beaver Creek, none of the developers sought a builder's remedy as described in Mount Laurel II. 92 N.J. at 279 . The other Plaintiff-Intervenors played no role in the preceding litigation and submitted proposals for the first time after the municipality was ordered to rezone. Since only developers who succeed in Mount Laurel II litigation are entitled to builders' remedies, these later participants fall into a different category. The builder's remedy test which places the burden on the municipality to establish that a project is environmentally unsound or clearly contrary to sound land use planning, plays no role in this context. In granting "compliance remedies", however, the Court must determine the most appropriate site for Mount Laurel II development. This will encompass all the principles of sound planning including consideration of surrounding land uses, development of infrastructure, topographical conditions, the intensity of the proposed development and environmental impact. It is the Court's obligation to make *237 every effort to cushion the impact of these developments on the municipality and safeguard the general public interest.
X — REVIEW AND APPROVAL PROCESS
A new procedure for review and approval of mandatory set-aside development applications in the Township of Mahwah is hereby established:
(1) AN INDEPENDENT PROFESSIONAL TECHNICAL REVIEW GROUP (PTRG) SHALL BE CREATED TO REVIEW AND PROCESS ALL MANDATORY SET-ASIDE DEVELOPMENT APPLICATIONS. THE PTRG SHALL CONSIST OF 3 MEMBERS: AN ENGINEER, A PLANNER AND AN ARCHITECT. ALL MEMBERS OF THE PTRG SHALL BE LICENSED IN THEIR FIELD BY THE STATE OF NEW JERSEY, HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN ANY PROPOSED DEVELOPMENT AND NOT BE CONNECTED WITH THE MUNICIPALITY IN ANY MANNER.
COMMENT: The function of the Planning Board, assisted by municipal professionals, is to apply the standards set forth in local ordinances promulgated for the protection of health and safety. In mandatory set-aside developments, however, different criteria must be used in the review and approval process. The PTRG will screen the developers cost reduction proposals and offer an independent professional viewpoint to the Planning Board. Although engineering and design criteria are generally reviewed by engineers and planners, an architect has been included in the PTRG to assure structural and aesthetic integrity in Mount Laurel II projects.
(2) THE MASTER WILL OVERSEE THE PROCESSING OF ALL MANDATORY SET-ASIDE DEVELOPMENT APPLICATIONS AND SHALL APPOINT MEMBERS OF THE PTRG FOR EACH INDIVIDUAL APPLICATION. THE MASTER MAY, IN HIS DISCRETION, SERVE AS A MEMBER OF THE PTRG FOR ONE OR MORE APPLICATION; HE MAY ALSO *238 APPOINT THE SAME PTRG MEMBER OR MEMBERS TO SERVE ON MORE THAN ONE APPLICATION.
COMMENT: This provision ensures that the organization and operation of the PTRG will be implemented under the Master's guidance. It affords a measure of flexibility to the Master since more than one PTRG may be required to efficiently process an influx of development applications at a particular time.
(3) THE PTRG SHALL PREPARE AN APPLICATION FORM WITH INSTRUCTIONS AND A CHECKLIST SETTING FORTH THE REQUIREMENT FOR ALL MANDATORY SET-ASIDE DEVELOPMENTS. IN THE EVENT OF ANY CONFLICT BETWEEN THE PTRG APPLICATION AND THE PLANNING BOARD APPLICATION, THE PTRG REQUIREMENTS SHALL PREVAIL.
COMMENT: Under present procedures, developers may not be advised of the need to make substantial revisions until a considerable amount of time has elapsed from the filing of an application. Planning Board members are generally laypeople who require input from their professional consultants before discussing changes with applicants. The purpose of this provision is to involve independent professionals early in the process so preliminary submissions may be revised or abandoned quickly.
(4) THE PTRG MAY, IN ITS DISCRETION, APPROVE DESIGN STANDARDS AND CONSTRUCTION TECHNIQUES NOT PERMITTED UNDER PRESENT MAHWAH REGULATIONS.
COMMENT: In Mount Laurel II developments, the obligation to remove unnecessary cost generating requirements not necessary for the protection of public health and safety changes the standards to be applied. The PTRG must determine whether mandatory set-aside development satisfies the requirements set forth in this opinion.
(5) WITHIN 2 WEEKS FOLLOWING SUBMISSION, THE PTRG SHALL PROVIDE THE DEVELOPER WITH WRITTEN *239 DETERMINATION AS TO WHETHER ITS APPLICATION IS COMPLETE. IF THE APPLICATION IS CONSIDERED INCOMPLETE, THE APPLICANT SHALL BE NOTIFIED IN WRITING AS TO THE ADDITIONAL MATERIALS REQUIRED. THE PTRG MAY, IN ITS DISCRETION, HOLD A PRELIMINARY DESIGN MEETING WITH THE APPLICANT.
COMMENT: N.J.S.A. 40:55D-46 dealing with preliminary site plan approvals and N.J.S.A. 40:55-48 dealing with preliminary subdivision approval have recently been amended for the second time by N.J.S.A. 40:55D-10.3 (effective July 1, 1984). Evidence adduced during the trial proved Planning Board failure to consider an application complete remains a primary source of costly delays despite Legislative efforts to expedite decisions on land use applications. Developers remain reluctant to invoke their rights to a statutory approval because of the inevitable ensuing litigation. This, and the following provision, will shift responsibility in this area from the Planning Board to the PTRG.
(6) WITHIN 2 WEEKS OF RECEIPT OF WRITTEN NOTIFICATION, THE DEVELOPER SHALL PROVIDE THE PTRG WITH THE REQUIRED ADDITIONAL MATERIAL. AT THIS POINT, REGARDLESS OF THE DEVELOPERS COMPLIANCE, THE PROJECT SHALL BE CONSIDERED COMPLETE AND THE PLANNING BOARD SHALL FORWARD COPIES OF THE APPLICATION TO MUNICIPAL AGENCIES IN ACCORDANCE WITH ITS BYLAWS.
COMMENT: If the developer fails to provide the required information or if the PTRG determines the data submitted is insufficient the Planning Board may deny the application or approve it on condition. This places the burden on the developer to comply with the PTRG request within two weeks. If the necessary information cannot be furnished in time, the application is presumed to have been prematurely filed. Any resubmission *240 will be treated as a new application and the time will begin to run from the new filing date.
Furnishing a copy of the application to interested municipal agencies at this early stage will also expedite matters. For example, the Mahwah Environmental Commission will be furnished the details of an application and can begin its evaluation.
(7) WITHIN 3 WEEKS FROM THE DATE AN APPLICATION IS DEEMED COMPLETE: (A) THE PTRG SHALL FILE ITS REPORT WITH THE PLANNING BOARD RECOMMENDING APPROVAL, DENIAL OR APPROVAL ON CONDITION; (B) INTERESTED MUNICIPAL AGENCIES SHALL FILE THEIR REPORTS WITH THE PLANNING BOARD. FAILURE TO FILE A REPORT SHALL BE DEEMED APPROVAL OF THE APPLICATION BY A MUNICIPAL AGENCY; (C) ALL DOCUMENTATION FILED WITH THE PLANNING BOARD SHALL BE MADE AVAILABLE TO THE PUBLIC AT LEAST 14 DAYS IN ADVANCE OF A PUBLIC HEARING.
COMMENT: This provision shifts the initial burden of furnishing information from the developer to the municipal agency which has the benefit of expert advice and knowledge of the community. For example, instead of imposing the burden of filing an Environmental Impact Statement upon the developer, the Mahwah Environmental Commission is presumed to know the problems involved in a particular site. It must request specific corrective measures in a limited time frame. This may require calling special meetings, but Mahwah's Mount Laurel II obligation requires such measures.
(8) THE PLANNING BOARD SHALL GRANT OR DENY PRELIMINARY APPROVAL WITHIN 95 DAYS OF THE DATE THE SUBMISSION OF THE APPLICATION IS DEEMED COMPLETE.
COMMENT: This is in accordance with N.J.S.A. 40:55D-46(c) and N.J.S.A. 40:55D-48(c). For a detailed historical review of the actions of both the Court and the Legislature in attempting *241 to expedite municipal decisions on land use applications see Diane Lizak, et al. v. Faria, et al. 96 N.J. 482 (1984)
(9) THE MASTER, IN HIS DISCRETION, AT THE REQUEST OF THE PTRG MAY APPOINT SUCH ADDITIONAL EXPERT OR EXPERTS AS HE CONSIDERS NECESSARY TO ASSIST THE PTRG IN ITS REVIEW OF A PARTICULAR APPLICATION.
COMMENT: Proof submitted during the trial indicated the assistance of other experts might be helpful to the PTRG in deciding site improvement requirements applicable to particular sites. A hydrologist may be needed to assist in the design of a detention pond or a traffic specialist in the design of access roads to insure minimal impact on neighboring residential neighborhoods. These services should be available to the PTRG.
(10)(A) FEES PAID TO THE MASTER FOR HIS GENERAL SERVICES IN SUPERVISING THE DEVELOPMENT APPLICATION PROCESS SHALL BE EQUITABLY APPORTIONED AMONG THE PRIVATE DEVELOPERS AND SUBMITTED TO THE COURT FOR APPROVAL.
(B) FEES PAID TO THE MEMBERS OF THE PTRG AND OTHER EXPERTS APPOINTED BY THE MASTER SHALL BE SET BY THE MASTER BASED UPON AN AGREED HOURLY RATE. DETAILED VOUCHERS SHALL BE SUBMITTED TO THE MASTER FOR HIS APPROVAL.
(C) ALL BILLS SHALL BE APPROVED BY THE COURT OR THE MASTER, AND PAID BY THE DEVELOPER WITHIN 10 DAYS FROM THE DATE OF APPROVAL. IF THE DEVELOPER FAILS TO PAY A VOUCHER WITHIN 10 DAYS AFTER APPROVAL BY THE COURT OF THE MASTER, PROCESSING OF ITS APPLICATION SHALL CEASE, NO BUILDING PERMITS SHALL BE GRANTED AND NO CERTIFICATES OF OCCUPANCY ISSUE UNTIL PAYMENT IS MADE.
*242 COMMENT: This provision eliminates the need to establish escrow funds to insure payment by the developer of these fees. Rahenkamp estimated, based upon a 375 unit development, between $170,563 and $195,563 could be saved in the reduction of municipal fees and escrow funds. He suggested a flat escrow deposit of from $65 to $75 per townhouse and $30 per apartment unit with a waiver of escrow deposits for lower income units. However, these sanctions adequately assure prompt payment without the necessity of a cost additive escrow fund provision.
The Master's approval of vouchers provides an impartial review as to the reasonableness of these professional fees. Should the municipality elect to have a review by its own consultants, it will be entirely at its own cost.
(11) DEVELOPERS NEED NOT DEPOSIT ESCROW FUNDS TO COVER INSPECTION FEES AND OTHER PROFESSIONAL SERVICES REQUIRED TO BE PERFORMED BY MUNICIPAL EXPERTS. MUNICIPAL EXPERTS PERFORMING SERVICES SHALL SUBMIT A DETAILED VOUCHER AS TO THE SERVICES PERFORMED AND HOURLY RATE CHARGE TO THE MASTER FOR HIS APPROVAL. FAILURE OF A DEVELOPER TO PAY SUCH VOUCHER WITHIN 10 DAYS FOLLOWING THE MASTER'S APPROVAL SHALL RESULT IN THE SAME SANCTIONS AS SET FORTH IN PARAGRAPH 10(c).
COMMENT: N.J.S.A. 40:55D-53(h) requires developers to reimburse the municipality for all reasonable inspection fees paid to the municipal engineer for inspection of improvements and authorizes the requirement of a deposit for "all or a portion of the reasonably anticipated fees to be paid to the municipal engineer for such inspections". This statutory requirement, although valid in other types of development, is unnecessarily cost generative in Mount Laurel II development. As indicated in the comment to Section 10, the alternative method set forth in this provision adequately protects the municipal interests.
*243 (12) APPLICATIONS SHALL BE PROCESSED WITHIN THE TIME FRAME SET FORTH IN THE ACTIVITY TIMETABLE BELOW:
ACTIVITY TIMETABLE
1. Application made to PTRG. 0 day
2. PTRG provides developer with written determination
as to whether application is complete. 14 days
3. Developer furnishes PTRG with required additional
material. Planning Board forwards copy of
applications to municipal age

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2382492. Public record. Not legal advice.