Egg Harbor Township faces a new court challenge from a builders trade association as it nears settlement on another builders lawsuit and comes into compliance with state affordable housing mandates.
The lawsuit filed by the Builders League of South Jersey claims credits builders are required buy from the Pinelands Development Credit Bank represent an illegal method of meeting the township’s affordable housing mandates.
An ordinance Township Committee approved in December requires developers to purchase Pinelands Development Credits — which the Pinelands Commission uses to redirect growth away from preservation districts. Money collected from developers goes to subsidize landowners who cannot build due to Pinelands regulation. The ordinance also requires new developers to set aside 20 percent of their units for low- and moderate-income households.
The league’s executive vice president said the ordinance, if allowed to stand, will make it too expensive to develop, hurting builders and landowners.
“You’re not getting anything for buying the development credits,” said Richard Van Osten. ”Builders purchased (credits) so they could get extra (housing) density, and landowners who couldn’t develop land are getting money; now it seems like you’re paying for something you should have the right to do.”
Township Administrator Peter Miller said he expected the lawsuit because the league is always looking for a larger return on investment.
“I’m just assuming that, in their mind, their profit margin will not be as large as they want it to be,” he said. “And they’re using the courts to help maximize that.”
Township officials say the league’s grievances are with the state that set out the affordable-housing mandates not the municipality.
“We were asked to comply, so we came up with an ordinance that seems to be acceptable to the judge but not acceptable to the builders,” said Mayor James “Sonny” McCullough.
Affordable housing and Pinelands regulation overlap in Egg Harbor Township because the Pinelands Commission, formed in 1979, designated the municipality as a “regional growth area” for the largest concentration of development. A series of state Supreme Court decisions in the 1970s and ’80s required municipalities to include low- and middle-income families in their residential planning. In Egg Harbor Township, that meant a larger affordable housing burden than the rest of the Pinelands.
After decades of legal wrangling with both the state and developers, the problem came to a point with the 2006 lawsuit filed by English Creek Manor, a developer that claimed the township thwarted its efforts to build additional affordable units.
Miller said the settlement of that case — which is expected to come to a conclusion later this summer — involved creating a comprehensive plan to meet the state affordable-housing mandates. The plan included revised zoning ordinances that also had to be approved by the Pinelands Commission.
“It took us a while to work with Pinelands to come up with an ordinance that they would certify,” Miller said.
Township officials are expected to vote on next week on an amending ordinance that would incorporate changes recommended by the Pinelands Commission, including repeating the language in the township’s individual residential zoning codes.
Van Osten said the league considered including the Pinelands Commission in its suit, but ultimately limited its focus to the township.
“Our attorney decided we had a clearer legal shot at suing the township,” he said. “No matter how they they got to (this ordinance), they’re the ones that adopted it.”
That sentiment was echoed by the league’s attorney, Eric Garrabrant.
“The intent is to challenge the official action of the township,” he said. “They are the party who adopted the ordinance — we are challenging that adoption and nothing else.”
Miller said the township has not yet responded to the league’s suit, but he hopes the matter will be handled by the same judge who’s in charge of the English Creek Manor suit and the comprehensive plan.
“If he’s working on an overall plan and they’re challenging a component of it, he’s the appropriate judge to deal with it,” he said.
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