SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
In Re Declaratory Judgment Actions Filed By Various Municipalities, County Of Ocean, Pursuant To The
Supreme Court’s Decision In In re Adoption of N.J.A.C. 5:96, 221 N.J. 1 (2015)
(A-1-16) (077565)
Argued November 30, 2016 -- Decided January 18, 2017
LaVecchia, J., writing for a unanimous Court.
In this interlocutory appeal, the Court considers whether the pent-up housing need that arose for persons in
low- and moderate-income households formed during the sixteen-plus years since the expiration of the Council on
Affordable Housing’s (COAH) second housing cycle rules (Second Round rules) may be assessed as part of a
municipality’s third cycle housing obligation and captured under a present-need analysis.
Through the Mount Laurel line of cases, the Court recognized that municipalities have a constitutional
obligation to use their zoning power in a manner that creates a “realistic opportunity for the construction of [their]
fair share” of the region’s low- and moderate-income housing. In 1985, the Legislature codified that constitutional
obligation, enacting the Fair Housing Act (FHA), N.J.S.A. 52:27D-301 to -329, and creating COAH to facilitate and
monitor compliance with the constitutional mandate through the promulgation of rules for successive housing
cycles. COAH adopted rules to govern its first and second housing cycles, but, after the Second Round rules
expired in 1999, COAH failed to adopt a set of valid regulations to govern the third housing cycle (Third Round).
In March 2015, the Court reaffirmed the constitutional obligation, declared COAH defunct, and eliminated
the FHA’s exhaustion-of-administrative-remedies requirement. In re N.J.A.C. 5:96 & 5:97 (Mount Laurel IV), 221
N.J. 1 (2015). In its stead, the Court provided for a judicial forum to adjudicate affordable housing disputes,
creating “a substitute for [COAH’s] substantive certification process.” Id. at 24. The Court held that the
municipalities that had already obtained, or were in the process of obtaining, substantive certification from COAH
could file declaratory judgment actions to confirm that their plans comported with their Mount Laurel obligations.
Id. at 24-29. The Court emphasized that its holding did not eliminate fair share obligations from the prior rounds
and that “prior unfulfilled housing obligations should be the starting point for a determination of a municipality’s
faire share responsibility.” Id. at 30.
Approximately 300 declaratory judgment actions were commenced throughout the state, including actions
by thirteen Ocean County municipalities. The Ocean County actions were consolidated to determine whether the
Third Round housing obligation properly included the need that arose during the so-called gap period—the period
since the expiration of the Second Round rules (i.e., 1999-2015). The municipalities, joined by the New Jersey State
League of Municipalities (League), argued that fair share obligations have only two well-defined components—
“present need” and “prospective need”—and that courts lack the authority to create a new component of need to
account for the gap period. Fair Share Housing Center (Fair Share), the New Jersey Builders Association (NJBA),
and private developers argued that the gap need must be captured as part of a town’s affordable housing obligation.
The trial court held that inclusion of the need arising during the gap period in an assessment of the Third
Round fair share obligation was a constitutional obligation. Importantly, the court held that such need was a
“separate and discrete component” of the fair share obligation that could be calculated from the actual growth that
accumulated during that time period.
The Appellate Division granted the Township of Barnegat’s motion for leave to appeal and reversed the
trial court’s determination to address gap need as a new, “separate and discrete” component of the Third Round
obligation. 446 N.J. Super. 259, 267 (App. Div. 2016). In rejecting the trial court’s approach to the retrospective
calculation of gap need, the panel asserted that its holding did not ignore the affordable housing need that arose from
1999 to 2015. The panel observed that, to the extent that “[low- and moderate-income] households formed during

 the gap period” might be living in overcrowded or deficient housing, the need that arose during the gap would be
“partially included” in the calculation of present need. Id. at 294.
The Court granted Fair Share’s motion for leave to appeal.
HELD: Towns are constitutionally obligated to provide a realistic opportunity for their fair share of affordable housing
for low- and moderate-income households formed during the gap period and presently existing in New Jersey. A form
of present-need analysis under the Fair Housing Act—redefined to include a component premised on a calculation of
those low- and moderate-income New Jersey households, newly formed since 1999, that presently exist and are entitled
to their opportunity of access to affordable housing—provides the appropriate approach to addressing statewide and
regional need. The modification of the previous definition of a present-need analysis is essential in order to address the
failure of COAH to perform its required mission, in connection with a constitutional obligation, for a period of time
affecting almost a generation of New Jersey citizens.
1. At bottom, the parties fundamentally disagree on whether the gap time period of need must be accounted for. There
is no fair reading of the Court’s prior decisions that supports disregarding the constitutional obligation to address pentup affordable housing need for low- and moderate-income households that formed during the years in which COAH
was unable to promulgate valid Third Round rules. The opportunity for immunity provided by this Court’s substitute
for substantive certification was premised on the value of the efforts of towns that received substantive certification
from COAH during that interval or that otherwise could show steps taken to address affordable housing needs. That
necessarily meant addressing the need of low- and moderate-income households that came into existence since 1999,
and that still exists today. Here, the Appellate Division as well as the trial court (plus the other trial courts that have
considered the matter) recognized, in their own ways, that there could be no hiatus in the constitutional obligation. The
Court affirms that important aspect of the Appellate Division judgment. (pp. 16-17)
2. What separated the trial court and the Appellate Division panel in this matter is how to account for need arising
during the gap period. The Court summarizes the parties’ arguments on that subject. (pp. 17-19)
3. In Mount Laurel IV, the Court provided a process by which a town might obtain the equivalent of substantive
certification. The Court gave preferred treatment to two categories of towns that voluntarily had put themselves in
the queue before COAH. In return for submission to COAH’s jurisdiction, the towns received the quid pro quo of
protection from exclusionary zoning actions. In establishing an equivalent to substantive certification, the Court
identified some parameters for the trial courts’ actions. Beyond those, the Court did not limit the courts’ work
except to attempt to cabin the time within which progress would be made toward recapturing the lost opportunity.
The Court now offers more specific guidance. (pp. 19-23)
4. The Appellate Division disagreed with the establishment of a free-standing gap-time calculation. According to
the panel, the permissible categories within which to work were: unfulfilled prior cycle obligations, prospective
need, and present need. Only present need was regarded as having the potential to capture pent-up housing need that
arose during the gap period and that continues to be an identifiable category of housing need that experts could flesh
out. The Court agrees with the appellate panel that “prospective need” is a more or less calcified term, having been
used initially by the Court in its Mount Laurel decisions and later codified in the FHA. (pp. 23-25)
5. “Present need” is not defined in the FHA. The concept was identified by the Court and implemented similarly by
COAH in prior adopted regulations. Importantly, it has not been used as an assessment based on household need for
affordable housing; rather, its focus has been on the actual number of deficient housing units occupied by low- and
moderate-income households. As the Appellate Division and the trial court concluded, the need of presently
existing low- and moderate-income households formed during the gap period must be captured and included in
setting affordable housing obligations for towns that seek to be protected from exclusionary zoning actions under the
process the Court has set up while COAH is defunct. The Court agrees with the panel that the category of present
need offers the better approach to capturing the need that must be addressed. The term is malleable and can address
the circumstances presented now in order for the constitutional obligation to be fulfilled, not skirted. (pp. 25-28)
6. In current circumstances, the present-need analysis must be expanded to include, in addition to a calculation of
overcrowded and deficient housing units, an analytic component that addresses the affordable housing need of
presently existing New Jersey low- and moderate-income households, which formed during the gap period and are
entitled to their delayed opportunity to seek affordable housing. The trial courts must take care to ensure that the

2

 present need is not calculated in a way that includes persons who are deceased, who are income-ineligible or
otherwise are no longer eligible for affordable housing, or whose households may be already captured through the
historic practice of surveying for deficient housing units within the municipality. The Court acknowledges the
possibility that the executive branch agency will resurrect and operate constitutionally, and further welcomes
legislative attention to this important social and economic constitutional matter. (pp. 28-32)
As modified by this opinion, the judgment of the Appellate Division is AFFIRMED.
JUSTICES ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in
JUSTICE LaVECCHIA’s opinion. CHIEF JUSTICE RABNER did not participate.

3

 SUPREME COURT OF NEW JERSEY
A-1 September Term 2016
077565
IN RE DECLARATORY JUDGMENT
ACTIONS FILED BY VARIOUS
MUNICIPALITIES, COUNTY OF
OCEAN, PURSUANT TO THE
SUPREME COURT'S DECISION IN
In re Adoption of N.J.A.C.
5:96, 221 N.J. 1 (2015).

Argued November 30, 2016 – Decided January 18, 2017
On appeal from the Superior Court, Appellate
Division, whose opinion is reported at 446
N.J. Super. 259 (App. Div. 2016).
Kevin D. Walsh argued the cause for
appellant Fair Share Housing Center (Mr.
Walsh, attorney; Mr. Walsh, Adam M. Gordon,
and Joshua D. Bauers, on the briefs).
Thomas F. Carroll, III, argued the cause for
respondent New Jersey Builders Association
(Hill Wallack, attorneys; Mr. Carroll and
Stephen M. Eisdorfer, on the briefs).
Jeffrey R. Surenian argued the cause for
respondent Township of Barnegat (Jeffrey R.
Surenian and Associates, attorneys; Mr.
Surenian, Michael A. Jedziniak, Erik C.
Nolan, and Michael J. Edwards, on the
briefs).
Edward J. Buzak argued the cause for
respondent New Jersey State League of
Municipalities (The Buzak Law Group,
attorneys).
Jonathan E. Drill argued the cause for
amicus curiae The Municipal Group (Stickel,
Koenig, Sullivan & Drill, attorneys).
1

 Richard J. Hoff, Jr., submitted a brief on
behalf of respondent Highview Homes, LLC
(Bisgaier Hoff, attorneys; Mr. Hoff and
Robert A. Kasuba, on the brief).
Edward J. Boccher submitted a letter brief
on behalf of respondent Township of Brick
(DeCotiis, FitzPatrick & Cole, attorneys).
Steven A. Kunzman submitted a letter brief
on behalf of respondent Township of Toms
River (DiFrancesco, Bateman, Kunzman, Davis,
Lehrer & Flaum, attorneys).
Iraisa C. Orihuela-Reilly submitted a letter
brief on behalf of amici curiae Disability
Rights New Jersey, Supportive Housing
Association of New Jersey, Collaborative
Support Programs of New Jersey, Alliance for
the Betterment of Citizens with
Disabilities, New Jersey Association of
Community Providers, The Arc of New Jersey,
New Jersey Association of Mental Health and
Addiction Agencies, Inc., Coalition of
Mental Health Consumer Organizations, System
of Care Association, New Jersey Psychiatric
Rehabilitation Association, Mental Health
Association in New Jersey, Advancing
Opportunities, Inc., Community Access
Unlimited, Community Health Law Project, and
Autism New Jersey.
Catherine Weiss submitted a letter brief on
behalf of amici curiae American Planning
Association-New Jersey Chapter, New Jersey
Future, and The Housing & Community
Development Network of New Jersey
(Lowenstein Sandler, attorneys).
Lawrence S. Lustberg and James D. Pollock
submitted a brief on behalf of amici curiae
New Jersey State Conference of the National
Association for the Advancement of Colored
People and Latino Action Network (Gibbons,
attorneys).

2

 Donald J. Sears submitted a brief on behalf
of amicus curiae Township of South
Brunswick.
Ronald L. Israel submitted a brief on behalf
of amicus curiae Township of Colts Neck
(Chiesa Shahinian & Giantomasi, attorneys).
Valentina M. DiPippo and Patrick Jhoo,
Deputy Attorneys General, submitted a brief
on behalf of amicus curiae Attorney General
of New Jersey (Christopher S. Porrino,
Attorney General of New Jersey, attorney;
Melissa Dutton Schaffer, Assistant Attorney
General, of counsel).
Kira S. Dabby submitted a letter in lieu of
brief on behalf of amicus curiae Township of
Middletown (Archer & Greiner, attorneys).
Michael B. Steib submitted a letter brief on
behalf of amicus curiae Township of
Millstone.
JUSTICE LaVECCHIA delivered the opinion of the Court.
For the last sixteen years, while the Council on Affordable
Housing (COAH) failed to promulgate viable rules creating a
realistic opportunity for the construction of low- and moderateincome housing in municipalities, the Mount Laurel
constitutional affordable housing obligation1 did not go away.
Municipal responsibility for a fair share of the affordable
housing need of low- and moderate-income households formed
during that period was not suspended.

We now must address

See S. Burlington Cty. NAACP v. Township of Mount Laurel, 92
N.J. 158 (1983); S. Burlington Cty. NAACP v. Township of Mount
Laurel, 67 N.J. 151, appeal dismissed and cert. denied, 423 U.S.
808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975).
1

3

 arguments over constitutional compliance, specifically as it
concerns municipal responsibility to address the housing need
that arose during the past sixteen-plus years, to the extent
that it still exists today.
In this interlocutory appeal, we consider whether the
Appellate Division was correct in determining that the pent-up
need that arose for persons in low- and moderate-income
households formed during the years since expiration of COAH’s
second housing cycle rules (Second Round rules) may be assessed
as part of a municipality’s third cycle housing obligation and
captured under a present-need analysis.

The trial court in this

matter concluded that the pent-up need should be captured using
a new and distinct category of need.

We now hold that a form of

present-need analysis under the Fair Housing Act, N.J.S.A.
52:27D-301 to -329 (FHA) -- redefined to include a component
premised on a calculation of those low- and moderate-income New
Jersey households, newly formed since 1999, that presently exist
and are entitled to their opportunity of access to affordable
housing -- provides the appropriate approach to addressing
statewide and regional need.
Our modification of the previous definition of a presentneed analysis is essential in order to address the failure of
COAH to perform its required mission, in connection with a
constitutional obligation, for a period of time affecting almost
4

 a generation of New Jersey citizens.
present need was limited.

The prior understanding of

It was premised exclusively on a

delineated standard for essentially substandard and overcrowded
existing housing units; it did not focus on households eligible
for affordable housing.

That previous definition would fail to

ensure compliance with the Mount Laurel doctrine under the
present circumstances.
As modified, we affirm the Appellate Division judgment.

We

hold that, under the current circumstances, the present-need
analysis must be expanded to guarantee municipal compliance with
the Mount Laurel doctrine.

We authorize contested matters of

municipal obligation to be resolved using a modified approach to
present need in order to result in a fair judicial allocation of
municipal obligation and assessment of municipal compliance,
which can lead to the grant of immunity from exclusionary zoning
actions under the process established by this Court.

See In re

N.J.A.C. 5:96 & 5:97 (Mount Laurel IV), 221 N.J. 1, 19–20
(2015).
I.
The history of this matter has been recited recently enough
and need not be extensively repeated.

Through the Mount Laurel

line of cases, this Court recognized that municipalities have a
constitutional obligation to use their zoning power in a manner
that creates a “realistic opportunity for the construction of
5

 [their] fair share” of the region’s low- and moderate-income
housing.

Mount Laurel IV, supra, 221 N.J. at 7 (alteration in

original) (quoting S. Burlington Cty. NAACP v. Township of Mount
Laurel (Mount Laurel II), 92 N.J. 158, 205 (1983), and citing S.
Burlington Cty. NAACP v. Township of Mount Laurel (Mount Laurel
I), 67 N.J. 151, 179, appeal dismissed and cert. denied, 423
U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975)).
In 1985, the Legislature codified that constitutional
obligation, enacting the Fair Housing Act and creating COAH to
facilitate and monitor compliance with the constitutional
mandate.

In COAH, the Legislature vested responsibility for

determining and assigning municipal affordable housing
obligations, which would be accomplished through promulgation of
procedural and substantive rules for successive housing cycles.
N.J.S.A. 52:27D-307, -308.
COAH adopted rules to govern its first and second housing
cycles, but when the Second Round rules expired in 1999, COAH
had not proposed new regulations for the third housing cycle.
In the sixteen-plus years that followed, COAH failed to adopt a
set of valid regulations to govern the third housing cycle
(Third Round).

Although COAH twice adopted Third Round rules,

6

 reviewing courts found several key aspects of the regulations to
be invalid and violative of the Mount Laurel doctrine.2
In March 2015, this Court responded to years of delay and
uncertainty with Mount Laurel IV, reaffirming the constitutional
obligation to create a realistic opportunity for the provision
of affordable housing.

Mount Laurel IV, supra, 221 N.J. at 3–4.

Because COAH had failed to comply with the Court’s prior Order
directing that the agency take specific administrative steps
culminating in the adoption of Third Round rules, we declared
COAH defunct and eliminated the FHA’s exhaustion-ofadministrative-remedies requirement.

Id. at 5–6, 16–17.

In its stead, we provided for a judicial forum to
adjudicate affordable housing disputes once more.
19–20.

Id. at 5–6,

In so doing, we “provide[d] a substitute for [COAH’s]

substantive certification process,” creating an avenue for
municipalities to obtain immunity from challenges to their fair
share plans.

Id. at 24.

We held that the municipalities that

had already obtained, or were in the process of obtaining,
substantive certification from COAH could file declaratory

See In re Six Month Extension of N.J.A.C. 5:91-1 et seq., 372
N.J. Super. 61 (App. Div. 2004), certif. denied, 182 N.J. 630
(2005); In re Adoption of N.J.A.C. 5:94 & 5:95, 390 N.J. Super.
1 (App. Div.), certif. denied, 192 N.J. 71 (2007); In re
Adoption of N.J.A.C. 5:96 & 5:97, 416 N.J. Super. 462 (App. Div.
2010), aff’d as modified, 215 N.J. 578 (2013).
2

7

 judgment actions to confirm that their plans comported with
their Mount Laurel obligations.

Id. at 24-29.

To guide the designated judges who would be evaluating
compliance with Mount Laurel obligations, we instructed the
courts to follow certain guidelines “gleaned from the past.”
Id. at 29-30.

Among other points, we directed that judges

ascertain affordable housing need using the methodologies set
forth in COAH’s First and Second Round rules.

Id. at 30.

We

also noted that many aspects of COAH’s Third Round rules had not
been invalidated by the appellate courts, and we authorized
judges to evaluate municipal compliance using discretion similar
to that afforded to COAH in the rulemaking process.

Ibid.

This

Court emphasized that its holding did not eliminate fair share
obligations from the prior rounds and that “prior unfulfilled
housing obligations should be the starting point for a
determination of a municipality’s fair share responsibility.”
Ibid.
Approximately 300 declaratory judgment actions were
commenced throughout the state.

Pertinent to this appeal,

thirteen Ocean County municipalities filed declaratory judgment
actions to ascertain their fair share obligation for the Third
Round.3

On September 17, 2015, the trial court (the Honorable

The municipalities include the townships of Barnegat,
Berkeley, Brick, Jackson, Lacey, Little Egg Harbor, Manchester,
3

8

 Mark A. Troncone, J.S.C., and the Honorable Marlene Lynch Ford,
A.J.S.C., acting in concert -- hereinafter, the trial court)
consolidated the thirteen cases to determine whether the Third
Round housing obligation properly included the need that arose
during the so-called gap period.

As the issue unfolded before

the trial court, that period was described to span the length of
time since expiration of the Second Round rules through 2015
(i.e., 1999-2015).

The trial court used the 2015 date by which

towns had to file declaratory judgment actions to demonstrate
constitutional compliance in order to obtain immunity.

See

Mount Laurel IV, supra, 221 N.J. at 21, 35.
The municipalities argued that fair share obligations have
only two well-defined components -- “present need” and
“prospective need” -- and that the courts lack “the authority to
create . . . a new component” of need to account for the gap
period.

The New Jersey State League of Municipalities (League)

intervened and joined the opposition to the inclusion of the gap
need in any Third Round calculation.

Fair Share Housing Center

(Fair Share), the New Jersey Builders Association (NJBA), and
private development companies also intervened, arguing that the
gap need must be captured as part of a town’s affordable housing
obligation.

Ocean, Stafford, and Toms River, and the boroughs of Beach
Haven, Pine Beach, and Point Pleasant.
9

 To address the question, the parties submitted to the court
and to the court-appointed Special Master expert reports
analyzing whether the gap need could be a proper component of a
municipality’s Third Round fair share obligation.

The League’s

expert, Econsult Solutions, Inc., found no “legally defined
obligation” to address the gap need in the Third Round period -a period which Econsult viewed as limited to the years 2015 to
2025.

See N.J.S.A. 52:27D-307(c)(1) (defining housing cycles as

ten-year periods).

Therefore, it provided no estimate for the

gap need.
In contrast, Art Bernard and Associates, L.L.C., on behalf
of the NJBA, concluded that COAH’s regulations, as well as the
reality of affordable housing need in New Jersey, mandated that
the gap need be included in a prospective-need analysis.

Dr.

David N. Kinsey, on behalf of Fair Share, stated that COAH’s
regulations and applicable case law supported the gap need’s
inclusion, either separately or in the cycle’s prospective-need
component, in the Third Round, which encompassed all years from
1999 to 2025 (inclusive of the ten-year period following 2015).
Dr. Kinsey also advanced, essentially, two proposed formulas for
calculating the gap need.
Based on those reports, the Special Master recommended to
the trial court that the need arising in the gap period should
be included in the Third Round fair share calculation and would
10

 be properly calculated if a “separate and discrete” methodology
unique to the gap period were used rather than inserting gap
need into an assessment of prospective need.4
After reviewing the reports, but prior to any crossexamination of the experts about their opinions, on February 18,
2016, the trial court issued an opinion.

It held that the

inclusion of the need arising during the gap period in an
assessment of the Third Round fair share obligation was a
constitutional obligation.5

The trial court relied on the

During this phase of the litigation, the Special Master issued
three reports to the trial court: (1) an October 30, 2015
report in which he agreed with Econsult that using a 1999-2025
period for the Third Round presents dangers of “overlapping and
over counting” and “diverge[s] from the Prior Rounds,” which
limited prospective need to “future years only”; (2) a December
29, 2015 report that opined on the difficulty of accounting for
the gap need, but concluded that an estimate may be determined;
and (3) a February 17, 2016 report recommending the inclusion of
the gap need in the Third Round as a separate component of fair
share based in part on Dr. Kinsey’s January 2016 formulas for
capturing gap need.
4

As the record of material submitted to this Court reveals, at
approximately the same time that Judge Troncone issued his
opinion, two other designated Mount Laurel judges addressed the
issue of whether the gap need was a proper component of the
Third Round obligation. Both reached the same essential
conclusion as Judge Troncone. In Middlesex County, the
Honorable Douglas Wolfson, J.S.C., found it an “inevitable
conclusion” that the Third Round obligation would include a
means for addressing the gap need because “ignor[ing] th[e]
unmet need would be squarely at odds with the constitution and
the Legislature’s overarching intent to produce affordable
housing.” In Mercer County, the Honorable Mary C. Jacobson,
A.J.S.C., adopted the portion of Judge Troncone’s opinion
“requiring the municipalities to include the ‘gap period’ unmet
5

11

 principle, “first enunciated . . . in Mount Laurel II,” that a
“fair share obligation is cumulative” and therefore, the gap
need must be addressed to the extent it could be “reliably
calculated by rational means.”

The court also relied on COAH’s

prior attempts at promulgating valid Third Round rules, noting
that every adopted version explicitly required “the gap need
[to] be incorporated into the towns’ [T]hird [R]ound
obligation[s].”
Importantly, for present purposes, in holding that
municipalities are constitutionally required to recognize need
that arose during the gap period, the trial court held that such
need was not a part of prospective need, but rather constituted
a “separate and discrete component” of the fair share
obligation.

Without providing an express formula by which the

gap need would be calculated, the trial court reasoned that the
need arising from 1999 to 2015 could be calculated not by using
projections into the future, as is typical of prospective need,
but by relying on the actual growth that accumulated during that
time period.
Accordingly, the trial court held that the Third Round
obligation consisted of four components:

(1) prior (First and

Second) round unmet obligations; (2) the need arising during the

affordable housing needs when calculating their Third Round
obligations.”
12

 gap period; (3) a traditional present-need analysis; and (4)
calculation of prospective need for the 2015-2025 period.

To

ease the burden on municipalities, the court emphasized that,
except for prior unmet obligations, all of the components of
need are subject to the FHA’s 1000-unit cap, see N.J.S.A.
52:27D-307(e), and that the municipalities may elect “to defer
up to 50 percent of [their] ‘gap’ obligation to the [F]ourth
[R]ound.”
The Township of Barnegat filed a motion for leave to appeal
the trial court’s legal conclusion that there must be a “gap
need” component to the Third Round housing need.

The Appellate

Division granted the motion,6 prompting Fair Share to file an
emergent application for direct certification of the appeal;
this Court denied the application, but expedited the appellate
proceedings.
On July 11, 2016, the Appellate Division issued its
decision.

In re Declaratory Judgment Actions filed by Various

Muns., Cty. of Ocean, Pursuant to the Supreme Court’s Decision
in In re Adoption of N.J.A.C. 5:96, 221 N.J. 1 (2015), 446 N.J.

The Appellate Division also granted amicus status to the
townships of Millstone, Middletown, South Brunswick, and Colts
Neck, as well as The Municipal Group (a consortium of
municipalities interested in fair share methodology issues
ensuing after issuance of Mount Laurel IV), the New Jersey
Chapter of the American Planning Association, New Jersey Future,
Disability Rights New Jersey, and The Housing and Community
Development Network of New Jersey.
6

13

 Super. 259 (App. Div. 2016).

The Appellate Division focused on

the trial court’s determination to address gap need as a new,
“separate and discrete” component of the Third Round obligation,
which was derived from principles taken from previous
assessments of prospective-need calculations for households.

In

reversing the trial court’s determination on the issue framed in
that manner, the appellate panel stated that “the FHA does not
require a municipality to retroactively calculate a new
‘separate and discrete’ affordable housing obligation arising
during the gap period.”

Id. at 267.

The panel pointed to

language of the FHA that prevents a retroactive calculation of
“prospective need,” which, the panel explained, is statutorily
defined to be a forward-looking projection of household growth.
Further, the panel rejected the trial court’s creation of a
“separate and discrete” gap need component, which it regarded as
policymaking, in seeming contravention of cautionary language in
Mount Laurel IV.
In rejecting the trial court’s approach to the
retrospective calculation of gap need, the panel asserted that
its holding did not ignore the affordable housing need that
arose from 1999 to 2015.

The panel observed that, to the extent

that “[low- and moderate-income] households formed during the
gap period” might be living in overcrowded or deficient housing,
the need that arose during the gap would be “partially included”
14

 in the calculation of present need -- a term defined not in the
FHA but in case law and in COAH’s implementing regulations.

Id.

at 294 (alteration in original).
Fair Share filed with the Appellate Division an application
seeking permission to file an emergent motion for a stay, which
the Appellate Division denied on July 18, 2016.

Fair Share then

applied to this Court, and we remanded Fair Share’s stay motion
to the Appellate Division for consideration in accordance with
the Court Rules.

After an appellate panel denied a stay, Fair

Share filed an application for a stay with this Court and sought
leave to appeal.
On September 8, 2016, we granted leave to appeal and
imposed a stay of the Appellate Division’s judgment, pending
expedited review by this Court.

We also denied a later emergent

application by municipalities for a “temporary stay of all
trials on the fair share issues pending the Court’s rulings” on
this appeal.

We are informed that, in the wake of that action,

twelve of the thirteen declaratory judgment actions have been
settled.

In those cases, the parties have resolved the

municipalities’ fair share obligations for the time period
running from 1999 through 2025.

We are also informed that,

statewide, there have been seventy-one settlements reached as of
the time of argument in this matter.

15

 Barnegat, the only remaining municipality in this appeal,
has settled all issues in this matter except for the obligation
to account for any need arising during the gap period.
Accordingly, the present appeal involves only one contested
municipality, although resolution of the legal issue will impact
other unresolved declaratory judgment actions brought by
municipalities seeking to take advantage of the prospect of
immunity offered by the process created in this Court’s 2015
decision.
II.
At bottom, the parties fundamentally disagree on whether
the gap time period of need must be accounted for.
the arguments have raised the question of:

Secondarily

if so, then how?

As to the fundamental disagreement -- whether the gap
period must be addressed -- we waste no time in settling that
issue.

There is no fair reading of this Court’s prior decisions

that supports disregarding the constitutional obligation to
address pent-up affordable housing need for low- and moderateincome households that formed during the years in which COAH was
unable to promulgate valid Third Round rules.

The opportunity

for immunity provided by this Court’s substitute for substantive
certification was premised on the value of the efforts of towns
that received substantive certification from COAH during that
interval or that otherwise could show steps taken to address
16

 affordable housing needs.
21, 24–29.

Mount Laurel IV, supra, 221 N.J. at

That necessarily meant addressing the need of low-

and moderate-income households that came into existence since
1999, and that still exists today.
The Appellate Division as well as the trial court (plus the
other trial courts that have considered the matter)
incorporated, in their own ways, the recognition that the need
that arose during the gap period was a responsibility of the
municipalities.

Indeed, both decisions below inherently

recognized that there could be no hiatus in the constitutional
obligation.

We agree and, therefore, affirm that important

aspect to the Appellate Division judgment.
What separated the trial court and Appellate Division panel
in this matter is how to account for need arising during the gap
period.

On that, we summarize in Section III the respective

positions of the parties and amici, combining arguments that
have commonality.
III.
While the specifics of the arguments advanced by the
parties and amici have evolved during the filing of successive
briefs at the various stages of this litigation and in
connection with arguments advanced by amici, appellant and
respondents’ chief positions nonetheless remain essentially
unchanged from those advanced before the Appellate Division.
17

 Fair Share, the NJBA, and amici in support of their
position argue that the need that arose during the gap period
must be included in an assessment of the Third Round housing
obligation because it would contravene the Mount Laurel doctrine
to simply ignore for sixteen years a municipality’s
constitutional obligation to provide a fair share of regional
affordable housing need.
other things, the FHA.

For support, they point to, among
Fair Share and its supporters regard the

FHA as containing provisions indicative of a legislative intent
that affordable housing need be calculated cumulatively, without
a break in time that would ignore household needs arising during
the gap period.

Fair Share, the NJBA, and amici assert that the

intricacies of calculating each municipality’s fair share
obligation should be left to the trial courts and their
consideration of expert analyses.

Indeed, the NJBA contends

that whether the need that arose during the gap period should
factor into a municipality’s present-need calculation is
something for trial courts to resolve on a case-by-case basis,
because this Court never restricted “present need” to
“physically substandard housing units occupied by low and
moderate income households.”
On the other hand, Barnegat, the League, and their
respective amici argue, emphasizing the plain language of the
FHA, that the Third Round obligation is limited to prior unmet
18

 obligations, present need, and prospective need; a separate gap
need is not included in the statute.

According to Barnegat, the

League, and their amici supporters, the Third Round obligation
does not include the need that arose during the gap period
because such need no longer exists today.

Finally, Barnegat and

the League contend that the Appellate Division decision cannot
be read to incorporate the gap need into present need because
“present need,” under its current definition, is measured in
housing units and as of “a fixed point in time” and therefore
cannot have a retrospective component.

Amicus, The Municipal

Group, acknowledged during oral argument that the definition of
present need could be expanded to include pent-up, but stillexisting, need that arose during the gap period in a
municipality’s calculation of its constitutional obligations
under Mount Laurel.
IV.
A.
In Mount Laurel IV, supra, confronted by COAH’s prolonged
and ultimately unfruitful efforts to promulgate rules for
assessing and identifying municipal compliance with housing
obligations, this Court (1) recognized COAH to be a
nonfunctioning agency; (2) eliminated the FHA’s exhaustion-ofadministrative-remedies requirement and reopened the courts to
Mount Laurel litigants; and (3) provided a process by which a
19

 town might obtain the equivalent of substantive certification
for its fair share housing plan and avoid exclusionary zoning
actions, after a court assessed the town’s fair share
responsibility.

221 N.J. at 5-6, 19-20.

Because the Court gave favorable treatment to (1) towns
with plans in progress that received substantive certification
from COAH under earlier iterations of Third Round rules, id. at
24–27, or, to a lesser degree, (2) towns that had signed on as
participants before COAH as the regulatory process was playing
out but whose active compliance was as yet unknown, id. at 27–
29, those towns were expected to meaningfully satisfy their
obligations owed to low- and moderate-income households being
formed during the gap period.

That expectation certainly

animated the Court’s different, and better, treatment of towns
that had already started taking meaningful steps toward
compliance during that period, in some form.

See id. at 26

(mentioning “generous” treatment toward towns that had achieved
substantive certification); id. at 27 (suggesting more favorable
treatment for towns that took action toward implementing housing
plans addressing then-quantified fair share obligations versus
towns that merely filed for participation status but took no
further steps to address need at that time).
That prospect of preferred treatment for those two
categories of towns came from a background of events that had
20

 taken place leading up to our 2015 Opinion and Order.

First,

there was COAH’s consistent work toward adopting regulations
that invariably sought to encompass the time period of housing
need since the Second Round rules expired in 1999.

See N.J.A.C.

5:94-1.4 (2004); 36 N.J.R. 3691(a), 3704, 3753 (2004); 40 N.J.R.
2690(a), 2719 (2008).

Second, there was the compelling

inference to be drawn that the towns, which voluntarily put
themselves in the queue before COAH, willingly accepted
responsibility for the need arising while COAH worked to adopt
controlling rules for that very time period and going forward.
See Mount Laurel IV, supra, 221 N.J. at 21–23.

In return for

their submission to COAH’s jurisdiction, the towns received the
quid pro quo of protection from exclusionary zoning actions.
See In re Six Month Extension, supra, 372 N.J. Super. at 78–80.
In setting forth an equivalent to substantive certification, we
aimed to establish a judicial analogue to further that process.
See Mount Laurel IV, supra, 221 N.J. at 29 (describing judicial
remedy provided as “one that seeks to track the processes
provided for in the FHA”).
Although we gave the trial courts considerable flexibility
in assessing need, allocating it by region and municipality, and
in evaluating municipal plans for compliance, we did identify
some parameters for the courts’ actions.

21

Id. at 29–33.

 Growth share analysis for prospective need was precluded on
the ground that it was contrary to the FHA.

Id. at 25 (citing

In re Adoption of N.J.A.C. 5:96 & 5:97, 215 N.J. 578, 605
(2013)); see also id. at 33.

We sought to streamline

proceedings and directed courts to use familiar methodologies
from the past.

Id. at 30.

The prior methodologies that the

Court identified included reference to the First and Second
Round methodologies, ibid., which avoided an assessment of
prospective need based on growth-share.

See In re Adoption of

N.J.A.C. 5:96 & 5:97, supra, 215 N.J. at 600.
The Court also referenced aspects or portions of the failed
Third Round rules that had not been invalidated by the courts in
prior reviews.

Mount Laurel IV, supra, 221 N.J. at 30–33.

Examples were listed for illumination but without limitation to
the discretion being afforded to the trial courts.
Beyond that, we did not limit the work of the trial courts
except to attempt to cabin the time within which progress would
be made toward recapturing the lost opportunity to advance
municipal compliance with affordable housing obligations.

Id.

at 33 (granting courts “flexibility in assessing a town’s
compliance” and encouraging courts to “endeavor to secure,
whenever possible, prompt voluntary compliance from
municipalities in view of the lengthy delay in achieving
satisfaction of towns’ Third Round obligations”).
22

Plainly, we

 need now to be more specific.

It is two years since our 2015

decision.
B.
The Appellate Division disagreed with the trial court’s
choice to establish a free-standing gap-time calculation.
According to the Appellate Division, the permissible categories
within which to work, when considering how to accommodate need
arising during the sixteen-plus gap-time years, were:
unfulfilled prior cycle obligations, prospective need, and
present need.

In re Declaratory Judgment Actions Filed by

Various Muns., supra, 446 N.J. Super. at 293.

As the Appellate

Division analysis distilled, the first category -- unfulfilled
prior cycle obligations -- was expressly directed by this Court.
See id. at 267 (citing Mount Laurel IV, supra, 221 N.J. at 30).
It appears that the panel regarded that category as limited
exclusively to previously identified obligations from earlier
cycles, which ended in 1999.

Id. at 278, 280 (relying on trial

court and experts’ treatment of prior round obligations as those
carried over from First and Second Rounds).

Prospective need

was declared an inapt fit for the gap need arising between 1999
and 2015 because the FHA definition rendered the term forwardlooking, and therefore not conducive to a retrospective
calculation of need arising during the gap period.
284.

Id. at 282,

Only present need was regarded as having the potential to
23

 capture pent-up housing need that arose during the sixteen-plus
years of the gap period and that continues to be an identifiable
category of housing need that experts could flesh out.

Id. at

294, 295.
We agree with the Appellate Division that “prospective
need” is a more or less calcified term at this point.

It was a

concept used initially by this Court in its Mount Laurel
decisions.

See Mount Laurel II, supra, 92 N.J. at 256–58

(explaining approaches to calculating prospective need).
term was later codified in the FHA.

The

In setting parameters for

COAH, the FHA defined prospective need as “a projection of
housing needs based on development and growth which is
reasonably likely to occur in a region or a municipality” within
the next housing cycle.

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

definition, prospective need is forward looking.
predictive -- a projection of future need.

By that
It is

The statutory

language was not designed to account for past periods of time
when performing a calculation of anticipated housing need for
low- and moderate-income households.

COAH has followed suit in

its rules, implementing the FHA’s codified definition.

See

N.J.A.C. 5:92-1.3 (defining prospective need in First Round
rules as “a projection of low and moderate housing needs based
on development and growth which is reasonably likely to occur in
a region or a municipality”).

Such need would be calculated by
24

 estimating “the share of future households that are low and
moderate income and as such require affordable housing.”
N.J.A.C. 5:92-5.6.
“Present need,” on the other hand, is not defined in the
FHA.

The concept was identified initially by this Court, Mount

Laurel II, supra, 92 N.J. at 243, and implemented similarly by
COAH in prior adopted regulations.

Importantly, it has not been

used as an assessment based on household need for affordable
housing.
COAH’s First Round rules defined “present need” as “the
total number of deficient housing units occupied by low or
moderate income households as of July 1, 1987.”
1.3 (emphasis added).

N.J.A.C. 5:92-

The First Round rules detailed that the

present-need calculation would equate to the sum of a region’s
“indigenous need” (or the “actual or capped deficient housing
occupied by low and moderate income households,” N.J.A.C. 5:925.2) and “reallocated present need” (or “the share of excess
deficient housing which must be distributed to municipalities
designated in whole or in part as growth area,” N.J.A.C. 5:925.4).

N.J.A.C. 5:92-5.5.

The focus of “present need” has been

on “the actual number of deficient housing units occupied by
low- and moderate-income households.”
N.J. 1, 14 (1993) (emphasis added).

25

In re Twp. of Warren, 132
Estimating existing

 deficient units is a snapshot of current need within a
municipality.
The Second Round rules, when adopted in 1994, retained the
First Round’s definitions of present and prospective need,
N.J.A.C. 5:93-1.3; the various adopted Third Round rules
continued to regard their prospective- and present-need
analogues as forward-looking calculations and snapshots of
deficient units within a municipality, respectively, see
N.J.A.C. 5:94-1.4 (2004).

Notably, however, the Second Round

housing obligation calculations were adjusted to incorporate
some retroactivity in analytic application.7

Those actions by

COAH, as separately described in footnote seven, were never
challenged by municipalities at the time, presumably because the
retroactive adjustments worked to the municipalities’ advantage.
However, the validity of those adjustments is not conceded by

Rather than incorporating a purely forward-looking approach in
1994 when promulgated, the Second Round rules were adopted to
procedurally govern the six-year period spanning from 1993-1999
(rather than 1994-2000). See N.J.A.C. 5:93-2.7. In so doing,
COAH utilized a continuous calculation of present and
prospective need that included and covered the one-year gap
between the First and Second Round regulations. See 26 N.J.R.
2300(a), 2347 (1994).
The Second Round Rules also added a new component to a
municipality’s fair share obligation called “prior cycle
prospective need,” N.J.A.C. 5:93-1.3, by which COAH recalculated
the First Round’s prospective need to comport with actual
household growth during the First Round using the 1990 Census
data, resulting in truer and lower assessments of need, N.J.A.C.
5:93-2.8(a).
7

26

 the municipalities in this action to be a sound basis for
utilizing a similar retroactivity analysis in respect of the gap
period.

We acknowledge the past practice of COAH as a matter of

historical record.

Further, we acknowledge that the trial court

considered such techniques previously employed by COAH in
fashioning its approach to retroactive capturing of gap period
obligations for low- and moderate-income households.
None of the expert reports addressing the gap need have, as
yet, been tested through cross-examination, and the unexamined
reports have not yet resulted in any court-ordered assessment of
need at the time this appeal began its ascent through the
appellate process.

It is not for us, as an appellate court, to

reconcile untested expert reports.
courts.

That is a job for the trial

But, we can refine the guidance provided to the courts

in approaching the quantification of municipal fair share
obligations under competing analyses of experts to be subjected
to examination, as necessary.
C.
We conclude, as did the Appellate Division panel and the
trial court, that the need of presently existing low- and
moderate-income households formed during the gap period must be
captured and included in setting affordable housing obligations
for towns that seek to be protected from exclusionary zoning
actions under the process this Court has set up while COAH is
27

 defunct.

See Mount Laurel IV, supra, 221 N.J. at 24–29.

Attending to that need is part of the shared responsibility of
municipalities.

We hold that towns are constitutionally

obligated to provide a realistic opportunity for their fair
share of affordable housing for low- and moderate-income
households formed during the gap period and presently existing
in New Jersey.
That said, we agree with the Appellate Division that the
category of present need offers the better approach to capturing
the need that must be addressed.

In re Declaratory Judgment

Actions Filed by Various Muns., supra, 446 N.J. Super. at 295.
We originally defined present need in Mount Laurel II, supra,
based on the circumstances faced at the time.

92 N.J. at 243.

The term is malleable and can address the circumstances
presented now in order for the constitutional obligation to be
fulfilled, not skirted.

Present need does not have to be

limited to a survey approach to housing units.

“Need” for

prospective-need analytical purposes devolves into an assessment
for households meant to be benefitted by the constitutional
obligation.

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

Present need can and

should be similarly applied, when, as here, we must be concerned
about existing households, formed during the gap period, that
need affordable housing today.

A present-need analysis

therefore must be expanded in current circumstances.
28

It must

 include, in addition to a calculation of overcrowded and
deficient housing units, an analytic component that addresses
the affordable housing need of low- and moderate-income
households created since 1999, provided that the households
remain income-eligible and situated in New Jersey, and are not
calculated in a way that includes persons now deceased or whose
households may be already captured through the historic practice
of assessing deficient housing units within the municipality.
The panel emphasized that flexibility in its holding,
similarly suggesting a permissible expansion in the analysis of
identifiable need submitted to a trial court through expert
presentations.

The panel stated that its holding “does not

ignore housing needs that arose in the gap period or a
municipality’s obligation to otherwise satisfy its
constitutional fair share obligations.”

In re Declaratory

Judgment Actions Filed by Various Muns., supra, 446 N.J. Super.
at 293–94.

The panel cited the trial court’s Special Master’s

comments, when reviewing the competing experts’ reports,
acknowledging that “[low- and moderate-income] households formed
during the gap period may no longer represent an affordable
housing need due to a variety of reasons including death,
changes in income, increase or decrease in household size,
retirement and/or relocation outside of New Jersey.”
(alteration in original).

Id. at 294

However, as the panel noted, the
29

 Special Master observed that gap period housing need would only
be “partially included by those living in over[]crowded or
deficient housing units that are encompassed in the new
calculation of [p]resent [n]eed.”

Ibid. (alterations in

original) (internal quotation marks omitted).

Thus, the panel

intimated that, when reviewing for present need through
examination of expert reports and testimony, the trial court’s
scope might be elastic enough to consider capturing stillexisting “identifiable housing need characteristics.”8

Ibid.

Although each used different “need” categories, the Special
Master was recommending to the trial court, and the Appellate
Division was embracing, a common intent to capture the
households formed during the gap period and to avoid doublecounting in the process.

There was much commonality to the

bottom line result sought by each, subject of course, to review
of details presented through expert reports and crossexamination on the opinions rendered.

That detailed review

awaits on remand.

In quoting this language from the Appellate Division’s
decision, this Court is not adopting any particular party’s
expert’s opinion on such characteristics, which are a matter of
dispute. Rather, we find the phrase useful only to describe the
practice in which the experts will have to engage to convince
the trial courts as to what characteristics should be included
when providing a fair estimate of the need that arose during the
gap period and remains unmet today.
8

30

 We now modify the Appellate Division judgment to make
express what is necessary in order to properly assess fully the
pent-up affordable housing need of low- and moderate-income New
Jersey households created during the gap period.

We hold that,

in determining municipal fair share obligations for the Third
Round, the trial courts must employ an expanded definition of
present need.

The present-need analysis must include, in

addition to a calculation of overcrowded and deficient housing
units, an analytic component that addresses the affordable
housing need of presently existing New Jersey low- and moderateincome households, which formed during the gap period and are
entitled to their delayed opportunity to seek affordable
housing.

The trial courts must take care to ensure that the

present need is not calculated in a way that includes persons
who are deceased, who are income-ineligible or otherwise are no
longer eligible for affordable housing, or whose households may
be already captured through the historic practice of surveying
for deficient housing units within the municipality.
In providing clarification for the trial courts’ handling
of the remaining declaratory judgment actions, we do not
discount the possibility that the executive branch agency will
resurrect and operate constitutionally.

Additionally, we

recognize, as we have before, that the Legislature is not
foreclosed from considering alternative methods for calculating
31

 and assigning a municipal fair share of affordable housing, and
to that end, we welcome legislative attention to this important
social and economic constitutional matter.

See Mount Laurel IV,

supra, 221 N.J. at 34; In re Adoption of N.J.A.C. 5:96 & 5:97,
supra, 215 N.J. at 620.
V.
As modified by this opinion, the judgment of the Appellate
Division is affirmed.
JUSTICES ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON, and
TIMPONE join in JUSTICE LaVECCHIA’s opinion. CHIEF JUSTICE RABNER
did not participate.

32