Kevin D. Walsh, a lawyer for the Fair Share Housing Center in Cherry Hill, which advocates for subsidized housing for low-income people and the disabled, said the state's Council on Affordable Housing (COAH) had breached its own rules by declining to give municipalities the chance to formulate a state-approved housing plan.
"COAH probably has 200 housing plans sitting on its desk unapproved. They have done nothing with them," Walsh said. "They have set up a system that is intended to maximize the amount of money that the state can take."
Deputy Attorney General Robert Lougy said municipalities with unspent housing funds could take COAH to court if they disliked its decisions.
The hearing was held before a panel of the Appellate Division of Superior Court comprising of Judges Jose Fuentes, Jane Grall, and Carmen Messano. A decision is expected shortly.
It was unclear from the exchanges between judges and lawyers how the panel might rule, but Fuentes wondered aloud at one point whether it might be best for COAH to establish an appeals process for disputes, "a middle ground, to avoid all of this litigation."
Fuentes noted that the Appellate Division in an earlier ruling defined what a completed housing plan would look like, and said municipalities should have an opportunity to correct any deficiencies in those plans. But there was considerable dispute Wednesday as to how that should be done.
The administration has declined to say what it intends to do with the money, but the timing of the move suggests that it will be used, at least in part, to balance the state's budget, which must be in place July 1.
This dispute, part of a legal battle among the state, municipal governments, and affordable housing advocates began in early May, when housing activists sued to stop the administration from taking the money.
Hundreds of New Jersey communities have collected money from developers to help meet their legal requirement, set forth in the state Supreme Court's Mount Laurel housing decisions, to provide for low-income or discounted housing for low- and moderate-income families.
COAH has had responsibility for overseeing municipal efforts to comply with those decisions. But the administration has been trying to shut down the council, and its meeting in early May was the first in two years. Towns say that as a result, they have gotten little direction from the agency on how to disburse their housing money.
Contact Chris Mondics at 609-989-9016 or firstname.lastname@example.org