A Superior Court judge yesterday granted an order to show cause in connection with a lawsuit filed by 21 municipalities challenging the fourth-round rules of affordable housing obligations. (The Court’s Order can be found here.) As a result, the State and other defendants will have to show why the Court should not Order for the legislation enacting the fourth-round rules and all obligations of New Jersey municipalities under the legislation to be stayed pending final judgment of the Court. The viability and, if they survive, the timing of the fourth-round rules are now in limbo.

The lawsuit challenging the fourth-round rules and its legislation was originally filed by nine municipalities – Montvale, Denville, Florham Park, Hillsdale, Mannington, Millburn, Montville, Old Tappan, and Totowa. Twelve additional municipalities later joined the litigation – Allendale, Westwood, Hanover, Wyckoff, Wharton, Mendham, Oradell, Closter, West Amwell, Washington, Norwood, Parsippany-Troy Hills, and Franklin Lakes. The lawsuit contends that the fourth-round rules of affordable housing exceed the Mt. Laurel doctrine and the NJ Constitutional requirements for affordable housing; substantively violate the NJ Constitution; contains a structure which violates the NJ constitution; and violates the legislation approving the fourth-round rules by appointing retired judges in the Affordable Housing Dispute Resolution Program created by the fourth-round rules legislation. 

The Court will hold a virtual hearing for oral arguments on December 3, 2024. The NJ Department of Community Affairs recently released a report with its calculations for each municipality’s fourth-round obligations, under which each municipality has until January 31, 2025 to adopt a resolution with its calculation of its obligations. (More information on the DCA report and municipalities’ obligations can be found at our blog post here.) However, as a result of yesterday’s preliminary injunction, every aspect of the fourth-round rules might be stayed pending final judgment of the Court.