Holmdel Builders Ass'n v. Township of HolmdelHolmdel Builders Ass'n v. Township of Holmdel
The opinion of the Court was delivered by
In 1975, this Court held that developing municipalities are constitutionally required to provide a realistic opportunity for the development of low- and moderate-income housing.
Southern Burlington County NAACP v. Mount Laurel Township,
67
N.J.
151,
The cases that comprise this appeal arise out of attempts by several municipalities to comply with their obligation to provide a realistic opportunity for the construction of affordable housing under our ruling in Mt. Laurel II and the provisions of the FHA. The Townships of Chester, South Brunswick, Holmdel, Middletown, and Cherry Hill all adopted ordinances to provide for low- and moderate-income housing. The ordinances, in varying forms, impose fees on developers as a condition for development approval. The fees are dedicated to an affordable-housing trust fund to be used in satisfying the municipality’s Mt. Laurel obligation.
Several builders’ associations initiated suits challenging those ordinances, claiming that each was an ultra vires act, exceeding the authority of the zoning and police powers and the Fair Housing Act; an invalid tax in violation of the uniform property taxation requirement of the New Jersey Constitution; a taking without just compensation in violation of both the United States and New Jersey Constitutions; and a denial of due process and equal protection in violation of both the United States and New Jersey Constitutions. Plaintiff New Jersey Builders Association sought a refund of the monies paid into the Chester Township affordable-housing trust fund plus accrued interest.
The trial courts in each case except
Cherry Hill
ruled that the ordinance at issue was facially unconstitutional because it imposed an unauthorized tax on a select group of individuals. The trial court in
Chester
also held that the New Jersey Builders Association lacked standing to seek a refund on behalf
Defendants, and Cherry Hill as intervenor, appealed the grants of summary judgment on the substantive issues, and plaintiff New Jersey Builders Association cross-appealed on the standing issue. Consolidating the cases on appeal, the Appellate Division affirmed each case except
Holmdel.
The Appellate Division concluded that mandatory provisions for “in lieu” development fees are unauthorized revenue-raising devices.
Holmdel Builders Ass’n v. Township of Holmdel,
232
N.J.Super.
182, 193,
Accordingly, the Appellate Division ruled that the ordinances of the Townships' of Chester and South Brunswick, which require payment of a mandatory development fee, were invalid
We granted defendants’ and intervenor’s petitions, as well as the cross-petitions for certification of plaintiffs New Jersey Builders Association and Holmdel Builders Association. 117
N.J.
150, 151,
This appeal raises two major substantive issues. One is whether there is statutory authority, derived from the FHA, the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -129, and the general police power of government, N.J.S.A. 40:48-2, that enables a municipality to impose affordable-housing development fees as a condition for development approval. That issue raises the related questions whether the development-fee ordinances constitute an impermissible taking of property or violate substantive due process or equal protection. The second major issue is whether affordable-housing development fees are an unconstitutional form of taxation. Finally, if these ordinances are invalid, the appeal presents the issue whether a trade organization has standing to seek a refund on behalf of its members.
I.
Resolution of these several issues requires initially a presentation of the municipal ordinances involved in this case. It is
Chester Township’s Mt. Laurel obligation is limited to indigenous need. Accordingly, the Township amended its zoning ordinance to address its Mt. Laurel obligation. The purpose of the ordinance is to require all new development to share in the cost of Mt. Laurel compliance. The ordinance creates an affordable-housing trust fund and imposes a mandatory development fee on all new commercial and residential development as a condition for receiving a certificate of occupancy. New developments that are “identified as the type of construction which assists the Township in satisfying its affordable housing obligations under Mt. Laurel II” do not pay the fees. The ordinance specifically states that the purposes of the affordable-housing trust fund are:
To provide technical and financial assistance where needed, to small lot owners to encourage them to develop quality, low-cost housing;
To develop low-cost housing directly;
To provide assistance to the Township in managing the low-cost housing program;
To provide a working fund of capital to be used as grants, subsidies, or loans as may be required to help meet the Township’s obligation under Mt. Laurel II.
The amount of the fee varies in accordance with the proposed size of the development, ranging from twenty-five cents to seventy-five cents per square foot. Because the Township has determined that rehabilitating existing affordable units is the best way to satisfy its indigenous-need obligation, it does not give developers the option of constructing affordable housing.
South Brunswick Township concluded that “the constitutional obligation to provide affordable housing should apply not merely to those owners of tracts specifically rezoned for meeting this obligation, but rather to the developers of other residential,
Middletown Township determined, in light of the need for affordable housing created by employment and growth patterns, that all new development should share “in the cost of that portion of the present and future [Mt. Laurel ] obligation attributable directly or indirectly to the development.” It adopted an ordinance requiring all new major residential-subdivision and site-plan applications to set aside seven percent of the development’s total dwelling units for lower-income housing. On residential tracts other than those zoned specifically for inclusionary development, a developer may make a cash contribution to the affordable-housing trust fund in lieu of actually constructing the affordable units. The fee ranges from eighty cents to $1.80 per square foot, depending on the total gross floor area. All non-residential developers are required to pay a development fee into the fund. Density bonuses do not accompany the mandatory set-aside requirement, the fee-in-lieu option, or the mandatory-fee requirement. The trust-fund contributions are to be used to produce affordable housing. Production includes “the construction, rehabilitation, purchase for resale, direct subsidy, land acquisition, or mortgage financing of housing affordable for purchase or rental by lower income households as well as the funding of Regional Contribution Agreements.”
Cherry Hill Township’s Mt. Laurel obligation is not limited to indigenous need. The Township claims it is approaching “total build out,” and therefore adopted a housing impact-fee ordinance. Building permits are issued only for those developments that pay an impact fee into the affordable-housing trust fund. Inclusionary developments and small, inexpensive, single-family detached houses are exempt from the fee requirement. Otherwise, residential developments are assessed a fee based on the proposed size of the project, and commercial development is assessed a fee based on a percentage of the cost of construction. The trust fund is to be used “at the discretion of the Township for the sole purpose of aiding in the provision or rehabilitation of modest income housing.”
In sum, the Townships of Chester and South Brunswick have enacted ordinances that impose a mandatory development fee on all new non-inclusionary developments as a condition for development approval. Their ordinances do not give developers a density bonus in exchange for the development fee. Middle-town Township’s ordinance imposes a mandatory development fee on all new commercial development as a condition for development approval. Non-inclusionary residential developers may choose between constructing the affordable housing or
We consider these ordinances in the context of the FHA, which substantially codified the Mt. Laurel doctrine. The Council on Affordable Housing is the agency constituted to implement the FHA. It plays a critical role in the adoption of ordinances that address municipal affordable-housing needs. Every municipality with an affordable-housing obligation must submit to COAH for approval its plan to meet that need. Each of the municipalities involved here has received substantive certification of its housing-plan element following COAH review. The affordable-housing development fees authorized by the ordinances that are the subject of this appeal clearly bear on each municipality’s housing-plan element. COAH, however, ruled that the housing-plan element of each municipality was valid aside from those ordinances.
II.
Any inquiry into the validity of development-fee ordinances must inevitably consider the complex factors that contribute to the persistent and substantial shortage of low- and moderate-income housing (hereafter, lower-income or affordable housing).' This inquiry necessarily begins with our seminal decisions in Mt. Laurel I and Mt. Laurel II.
The core of those decisions is that
every
municipality, not just developing municipalities, must provide a
realistic,
not just a theoretical, opportunity for the construction of lower-income housing. We realized that the solution to the shortage of affordable housing could not “depend on the inclination of developers to help the poor, [but rather must rely] on affirma-'
The solutions proposed in Mt. Laurel II to meet the critical shortage of affordable housing were strongly influenced by the Court’s perception of the causes of that shortage. We noted that the flight of industry and commerce from urban to suburban areas is largely responsible for the social ill that the Mt. Laurel doctrine is intended to address.
[S]ince World War II there has been a great movement of commerce, industry, and people out of the inner cities and into the suburbs. At the same time, however, exclusionary zoning made these suburbs largely inaccessible to lower income households. Beside depriving the urban poor of an opportunity to share in the suburban development, this exclusion also increased the relative concentration of the poor in the cities and thereby hastened the flight of business and the middle class to the suburbs. A vicious cycle set in as increased business and middle class flight led to more urban decay, and more urban decay led to more flight, etc. [Id. at 210 n. 5,456 A.2d 390 .]
The phenomenon of unfettered non-residential development has exacerbated the need for lower-income housing, and has generated widespread efforts to link such needed residential development to non-residential development. Thus, nationwide, municipalities have attempted to shift the externalities of development to non-inclusionary developers. See, e.g., Alterman, “Evaluating Linkage and Beyond: Letting the Windfall Genie Out of the Exactions Bottle,” 34 Wash. U.J. Urb. & Contemp. L. 3, 7 (1988).
Affordable-housing linkage ordinances are the most recent phenomenon in this area. See, e.g., Connors & High, “The Expanding Circle of Exactions: From Dedication to Linkage,” 50 Law & Contemp. Probs. 69 (1987). Such ordinances link or couple the right to engage in non-residential development to the provision of affordable housing. The ordinances at issue in this appeal are all examples of linkage. Each requires certain developers to help finance the construction of affordable housing either as a condition for receiving permission to build or in order to obtain some type of density bonus. Only Holmdel’s ordinance gives developers the option of actually constructing affordable-housing units.
The linkage trend has gained momentum during the past decade.
See
Symposium: Land-Use, Zoning, and Linkage Requirements Affecting the Pace of Urban Growth, 20
Urban Lawyer
513 (1988); Bauman & Ethier, “Development Exactions and Impact Fees: A Survey of American Practices,” 50
Law &
Amicus curiae
the Public Advocate argues that commercial developers ought not be exempt from the financial burden of
Mt. Laurel
compliance because their projects, like those of multifamily residential developers, consume land, water, and sewerage capacity that could otherwise be devoted to or held for the satisfaction of the municipality’s lower-income-housing obligation. This Court has implicitly recognized that unrestrained nonresidential development can itself deepen the shortage of affordable housing.
Mt. Laurel II, supra,
92
N.J.
at 210 n. 5,
III.
With that background, we address the issue whether the development-fee ordinances are statutorily authorized. The focal question in this case is whether any statutory grant of power to municipalities can fairly be construed as impliedly authorizing the affordable-housing development fees imposed by these ordinances. We are guided by the principle that municipalities possess “only such rights and powers as have been granted in express terms, or arise by necessary or fair implication, or are incident to the powers expressly conferred, or are essential to the declared objects and purposes of the municipality.”
Edwards v. Mayor of Moonachie,
3
N.J.
17, 22,
A.
The MLUL, which expresses the zoning powers delegated to local government, seeks generally “[t]o encourage municipal action to guide the appropriate use or development of all lands in this State, in a manner which will promote the public health, safety, morals, and general welfare.”
N.J.S.A.
40:55D-2. “It is plain beyond dispute that proper provision for adequate housing of all categories of people is certainly an absolute essential in promotion of the general welfare required in all local land use regulation.”
Mt. Laurel I, supra,
67
N.J.
at 179,
Affordable housing is a goal that is no longer merely implicit in the notion of the general welfare. It has been expressly recognized as a governmental end and codified under the FHA, which is to be construed
in pari materia
with the MLUL.
See Hills Dev. Co., supra,
103
N.J.
at 33-34,
Further, the broad reach of the zoning authority arises from its character as an aspect of local government’s police powers. It has repeatedly been acknowledged that the zoning power is part of the police power.
E.g., Mt. Laurel II, supra,
92
N.J.
at 208,
In
Mt. Laurel II,
we held that inclusionary-zoning devices that serve the purpose of providing affordable housing within a region bear a real and substantial relationship to the regulation of land and the zoning power. 92
N.J.
at 271,
Development fees expressly dedicated to lower-income housing will thus affect “the nature and extent of the uses of land and of buildings and structures thereon,”
N.J.S.A.
40:55D-2k. As compared with relatively random and rigid set-aside zoning, development fees provide a more flexible and comprehensive approach that will encourage the appropriate use and development of land within a municipality to satisfy that municipality’s
We have also required that a zoning ordinance advance an authorized purpose “in a manner permitted by the legislature.”
C.I.B. Int’l, supra,
83
N.J.
at 271 n. 4,
In the context of off-site improvements, an exaction generally requires developers to supply or finance public facilities or amenities made necessary by proposed development.
See
Those commentators who believe that affordable-housing linkage measures are essentially a type of exaction for off-site improvements generally assume that a similar causal link is
We conclude that the rational-nexus test is not apposite in determining the validity of inclusionary zoning devices generally or of affordable-housing development fees in particular.
See Mt. Laurel II,
92
N.J.
at 260,
B.
The nature and extent of authority to provide affordable housing under zoning laws and general police powers is inextricably related to the FHA. The FHA takes on added and independent significance in our consideration of the validity of the development-fee ordinances because it deals directly with the provision of lower-income housing.
The FHA does not expressly authorize a municipality to impose development fees as a means to provide lower-income housing. Nevertheless, the FHA confers on a municipality a broad range of general powers, including the authority “to provide for its fair share of low and moderate income housing by means of any technique or combination of techniques which provide a realistic opportunity for the provision of [its] fair share.”
N.J.S.A.
52:27D-311a. The Appellate Division concluded that the FHA did not authorize mandatory development fees, 232
N.J.Super.
at 195,
Because the statute states that a municipality does not have to expend municipal revenue to provide affordable housing, it is evident that the Legislature has determined that affordable housing does not have to be provided directly by local government.
N.J.S.A.
52:27D-311d. However, contrary to the find
The use of development fees is not countermanded by current regulatory policy. The understanding of legislation by the administrative agency responsible for its implementation can be most instructive in ascertaining legislative intent and statutory meaning.
Malone v. Fender,
80
N.J.
129, 137,
The Appellate Division’s view was that development fees must be compensated by density bonuses, 232
N.J.Super.
at 196-97,
Such unenacted provisions concerning bonuses do not compel any particular conclusion about the Legislature’s views on development-fee schemes without bonuses. Enacted legislation may express more generally what was expressed more specifically in proposed legislation.
Jersey City Chapter of Property Owner’s Protective Ass’n v. City Council of Jersey City,
55
N.J.
86, 95,
Arguments in support of such implied authority for development fees without bonuses can also be drawn from the analogy between development fees and set-asides. Although we observed in
Mt. Laurel II
that the mandatory set-aside would have to assure developers “an adequate return on their investments,” 92
N.J.
at 268,
Nevertheless, we do not determine the validity of uncompensated fees as applied by the municipalities in the cases now before us. It cannot be overstressed that the Legislature, through the FHA, intended to leave the specific methods of compliance with
Mt. Laurel
in the hands of COAH and the municipalities, charging COAH with the singular responsibility for implementing the statute and developing the state’s regulatory policy for affordable housing.
Van Dalen v. Washington Township, supra,
120
N.J.
234,
C.
We noted at the outset that it was relevant to consider COAH’s unique role in the adoption of municipal ordinances that effectuate local fair-share housing plans. See discussion
supra
at 562. In determining the validity of the municipal development-fee ordinances in this case, we must focus on COAH’s regulatory responsibility under the FHA. This poses
Pursuant to the authority delegated by the Legislature, COAH acts as the administrative regulator in the field of affordable housing. The FHA vests the Council with “primary jurisdiction [over] the administration of housing obligations.”
N.J.S.A.
52:27D-304(a). “The power of the Council is extremely broad.”
Hills Dev. Co., supra,
103
N.J.
at 32,
The breadth of the legislative mandate and the statutory standards creating COAH’s regulatory authority comport with the complexity and sensitivity of the subject of affordable housing. COAH has undertaken to define a statutory public policy of affordable housing through the enactment of rules and regulations. This is consistent with the judicial recognition
We therefore conclude that agency rulemaking is reasonably required in order to fulfill the legislative purpose of the FHA with respect to inclusionary-zoning measures. We further conclude that COAH’s exercise of its rulemaking authority in the area of inclusionary zoning is incomplete because COAH has not yet specifically addressed mandatory development fees as available inclusionary zoning devices.
See Lower Main Street Assocs. v. New Jersey Hous. & Mortgage Fin. Agency, supra,
114
N.J.
226,
COAH has adopted regulations governing the grant of substantive certification of a municipality’s housing element and fair-share plan. Those regulations authorize certification if the municipal proposal is “consistent with achievement of the low and moderate income housing needs of the region,”
N.J.A.C.
5:91-6.1; if it eliminates unnecessary features of land-use ordinances that create higher housing costs,
ibid.;
and if it provides affirmative measures to make the achievement of the municipality’s fair share a reasonable possibility.
N.J.A.C.
5:91-10.1. In determining a municipality’s ability to satisfy its
Mt. Laurel
obligation through inclusionary development, “[t]he Council presumptively requires a 20 percent maximum set-aside and a minimum gross density of six units per acre on vacant developable sites.”
N.J.A.C.
5:92-8.4(c). Under certain circum
COAH has not, however, adopted any regulation dealing with mandatory development fees as available inclusionary zoning measures.' Nevertheless, we are informed that COAH itself has specifically considered, within the context of municipal fair-share adjustments, the possibility of imposing mandatory development fees. Further, even in the absence of a specific or detailed regulation, COAH has taken action in these cases that suggests an understanding that these measures are not invalid or ultra vires. COAH has expressly approved the housing elements and fair-share plans of the defendant municipalities, although in granting substantive certification to the municipalities in this case, COAH did not rule on the development-fee ordinances, concluding that the ordinances as such were “not required to implement the fair share plan.” However, as we view the matter, each ordinance has a direct and material bearing on the municipality’s effort to meet its fair-share affordable-housing obligation. Consequently, the development-fee ordinances were subject to review and certification by COAH as a constituent part of the housing-element plan of the respective municipalities.
Accordingly, we determine that COAH, through its rulemaking procedures, should specify standards for development fees, so that municipalities may consider employing such fees as inclusionary-zoning devices in designing their housing elements under the FHA. Regulatory standards will enable us to determine that persons subject to such ordinances have been reasonably informed of their obligations, and that both municipalities
Such regulations will define more precisely the impact and effect of development fees. They presumably will address the types of developments that will be subject to fees, the amount and nature of the fees imposed, the relationship of fees to other inclusionary-zoning measures such as mandatory set-asides and density bonuses, the conditions for the creation and administration of affordable-housing trust funds, the requirements for the use and application of such funds, and whether a system of development fees should include counterbalancing density bonuses. As already noted, in its current authorization of development fees on residential developers, COAH has determined that a municipality may counterbalance such fees with density bonuses; e.g., N.J.A.C. 5:92-8.4(e). In its consideration of non-residential development fees, COAH might well choose to follow this approach. Because we cannot and should not prognosticate what scheme COAH will devise for non-residential development fees, we do not determine on the present record whether development fees without bonuses might or might not in a particular application be constitutionally objectionable.
COAH, in the exercise of sound administrative discretion, should consider the desirability and feasibility of such development fees in the broader context of the State’s affordable housing policy. Development fees can be a valuable alternative that some municipalities desire to employ in fulfilling their Mt. Laurel obligations. Moreover, such fees should be considered constituent parts of local housing elements designed to meet municipal affordable-housing obligations under the FHA. Thus, COAH’s regulatory responsibility in this area must be acknowledged. Accordingly, we anticipate that COAH will properly discharge this responsibility by promulgating appropriate development-fee regulations. In the absence of such regulations, we are constrained to set aside the ordinances at issue in this appeal.
Plaintiffs present related claims that the development-fee ordinances violate constitutional standards pertaining to the taking of property, due process, and equal protection. These contentions need not be addressed on their merits in view of our determination that municipal inclusionary zoning measures consisting of development fees for lower-income housing must be adopted in accordance with duly promulgated administrative regulations. We nevertheless observe that insofar as those contentions are addressed to the facial validity of the development-fee ordinances in these cases, they do not have merit.
The claims based on alleged violations of due process and equal protection standards by development-fee ordinances do not project new or additional substantive considerations. Because plaintiffs do not allege that they are a member of a suspect class, see New Orleans v. Dukes, 427 U.S. 297, 304, 96 S.Ct. 2513, 2517, 49 L.Ed.2d 511, 517 (1976), those contentions can be answered sufficiently, for present purposes, by reference to the validity of those measures as reasonable exercises of statutory zoning and police powers. See discussion supra, at 566-73.
Further, central to those several claims is the allegation that development fees are confiscatory. The Appellate Division, believing that the fees were unfair or confiscatory, concluded that those constitutional violations would be rectified if developers received compensatory benefits. 232
N.J.Super.
at 201,
In response to similar claims in
Mt. Laurel II
that mandatory set-asides were confiscatory, this Court stated that “the builder who undertakes a project that includes a mandatory set-aside voluntarily assumes the financial burden, if there is any, of that condition.” 92
N.J.
at 267 n. 30,
Since initial authority for promulgating development-fee regulations lies with COAH, we do not reach the question of when, if ever, compensatory benefits might have to accompany mandatory development fees. As long as the measures promulgated are not confiscatory and do not result in an inadequate return of investment, there would be no constitutional injury. We leave it to COAH to determine initially the level at which fees might become confiscatory.
V.
Plaintiffs’ remaining major contention is that the affordable-housing development fees are a form of taxation and, as such, exceed delegated municipal revenue-raising authority in violation of the state constitutional command that all property taxes be levied uniformly. N.J. Const. of 1947 art. VIII, § 1, para. 1.
Municipalities do not have the authority to raise general revenue except through “property taxes imposed pursuant to express and comprehensive legislative provisions.”
Salomon v. Jersey City,
12
N.J.
379, 384,
In
Daniels, supra,
the municipality amended its building code to increase the fee for building permits. The fee was based on the square footage of the proposed structure. The Court invalidated the fees, finding that they did not bear a reasonable relationship to the costs of regulating construction, and concluded “that the purpose of increasing the building permit fees was to raise additional revenue made necessary primarily by increased school costs which were in turn caused by the increase in population resulting from the new buildings.” 23
N.J.
at 360,
The Appellate Division’s reasoning in this case parallels the reasoning in those decisions. It viewed a municipality’s obligation to provide lower-income housing as being comparable to its obligation to provide educational resources. 232
N.J.Super.
at 193,
Unlike public education that was directly at issue in
West Park Ave.,
and indirectly implicated in
Daniels,
the provision of
We cannot overstress the similarities between mandatory set-asides and the development-fee ordinances. Because a mandatory set-aside requires a developer to allocate a percentage of units for lower-income housing, the requirement can be viewed as an exaction in kind, and, arguably, as a tax. See Ellickson, “The Irony of ‘Inclusionary’ Zoning”, 54 S.Cal.L.Rev. 1167 (1981) (inclusionary zoning imposes a tax on new construction); Bonan v. City of Boston, 398 Mass. 315, 496 N.E.2d 640 (1986) (vacating on procedural grounds lower court holding that linkage fees closely resemble a tax, requiring express statutory authorization); San Telmo Assocs. v. City of Seattle, 108 Wash.2d 20, 735 P.2d 673 (1987) (ordinance restricting rights of low-income housing owners to convert to non-residential use deemed unconstitutional tax). In Mt. Laurel II, however, we determined that mandatory set-asides as a form of inclusionary zoning were not analogous to a tax. We viewed them as legitimate regulatory measures suitably addressed to the broad goals of zoning. Development fees, to reiterate, perform an identical function.
Although we do not regard development fees as a form of taxation, we stress that mandatory set-asides do not transgress the uniformity provision by imposing the responsibility of addressing the municipality’s affordable-housing problems on developers of residential property. Ordinances that impose that responsibility on developers of commercial property and non-inclusionary residential property stand on the same footing.
In sum, because the development fees are a form of inclusionary zoning and similar to other land-use and related exactions, they are regulatory measures, not taxes.
VI.
Because we have determined that the development fee ordinances in this case were not validly adopted, we must consider plaintiff New Jersey Builders Association’s claim that it be refunded the fees paid by its members to Chester Town
VII.
We determine that under the FHA, as well as the zoning power of the MLUL and the police power, municipalities with the approval of COAH can impose reasonable fees on the development of commercial and non-inclusionary residential property as inclusionary-zoning measures to provide lower-income housing. Such development fees may be enacted by ordinance and, subject to the approval and certification of COAH, may be included as part of a municipality’s housing element and fair-share obligation under the FHA. Because the FHA does not provide sufficient guidance, the effectuation of such authority appropriately requires the promulgation of rules by COAH that will provide the standards and guidelines for the imposition and use of such development fees. We are satisfied that regulatory measures for development fees to be used for affordable housing adopted pursuant to valid rules can address constitutional concerns relating to due process, equal protection, the taking of property, or invalid taxation. In view of the grounds for our decision in this case, contentions based on those concerns need not be further addressed. Because of the absence of enabling administrative regulations, we hold that the current development-fee ordinances were not validly adopted.
For affirmance in part and reversal in part — Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, POLLOCK, O’HERN, GARIBALDI and STEIN — 7.
Opposed — None.
Notes
The most widely known, and most extensively studied, housing-payment programs are the linkage programs in San Francisco and Boston. See, e.g., Tegeler, "Developer Payments and Downtown Housing Trust Funds," Clearinghouse Rev. 679 (Nov.1984). Both programs give developers the option of either constructing affordable housing units or contributing a fee in lieu of construction into a housing trust fund. San Francisco’s program applies to any new development or substantial rehabilitation of more than 50,000 square feet. See Keating, "Linking Downtown Development to Broader Community Goals,” APA Journal 133 (Spring 1986). Boston’s program applies only to developments greater than 100,000 square feet that require zoning relief. Kayden & Pollard, "Linkage Ordinances and the Traditional Exactions Analysis: The Connection Between Office Development and Housing,” 50 Law and Contemp. Probs. 127 (1987).
The case law on exactions is extensive and varies considerably from state to state, particularly concerning the degree to which the exaction must be related to the needs generated by the development. Different standards can be distilled from the cases litigated in various state courts. The most stringent standard is that of the Illinois Supreme Court, which has allowed only those exactions that are "specifically and uniquely attributable" to the development.
Pioneer Trust & Sav. Bank v. Village of Mount Prospect, 22 Ill.2d
375, 379, 176
N.E.2d
799, 802 (1961). Many states have adopted broader positions, upholding exactions so long as a reasonable connection can be shown between the need for additional facilities and the growth generated by development.
See, e.g., Associated Home Builders v. Walnut Creek,