The rules must be officially adopted by November, the court said.
The decision was a reprieve for Christie from the appellate court order, which laid out a tighter timetable for COAH and threatened to hold the agency's members personally responsible for any failure to meet the requirements.
One Supreme Court justice, Barry Albin, issued a blistering dissent to Friday's decision, saying the court had failed to hold the administration accountable for not ensuring that municipalities are meeting their housing requirements.
"This decades-long delay represents an abysmal failure of process, and the judiciary must accept its share of blame for not demanding timely compliance," Albin wrote.
The ruling stems from a September decision by the Supreme Court that gave COAH five months to write new affordable-housing rules, after previous rules criticized by affordable-housing advocates were struck down by an appellate court in 2010.
The housing requirements date to the Supreme Court's landmark 1975 Mount Laurel decision, which said suburban communities could not exclude low-income residents through zoning.
The Fair Housing Act of 1985 created COAH, which is tasked with writing and enforcing the affordable-housing requirements.
Christie, who has long opposed the housing mandate, tried to disband COAH but was rebuffed by the court last year. The governor responded by accusing the court of supporting "a failed social experiment in housing."
While the six-member panel still exists, it has not been meeting - including after the Supreme Court's September order that new housing rules be produced by Feb. 26.
That day, Community Affairs Commissioner Richard Constable, the chairman of the COAH board, asked the court for an extension.
Constable said "substantial progress" had been made, but more time was needed.
In response to a motion filed by the Fair Share Housing Center, a Cherry Hill-based advocacy group that accused the administration of stalling, the appellate court ruled this month that there was no plausible explanation for the state's delay.
The court set dates for a series of COAH meetings and threatened that if the schedule was not obeyed, COAH members would be personally ordered to appear in court.
On Friday, the Supreme Court vacated that ruling, saying it accepted Constable's representations that the agency needed more time and would produce rules by May 1.
The court said that if COAH does not adopt final rules by November, the court would be open to eliminating the agency's ability to shield municipalities from lawsuits brought by developers seeking to build affordable housing.
Chief Justice Stuart Rabner did not participate in the decision. Rabner also did not participate in the court's September decision ordering the creation of new rules.
In his dissent, Albin said the court had "failed to make the most basic inquiries" to verify Constable's assertions, which Albin dismissed as "amorphous excuses without meaningful details."
Constable, in his motion, did not say who had reviewed data to produce the rules, Albin said.
"Nor does he indicate what resources were devoted to this project, why the council that he chairs has not been convened, why counsel for COAH represented to the court that the entire task could be completed within months . . . and why he waited until the day the regulations were expected to go into effect to ask for an extension that will postpone the promulgation of regulations for another eight months," Albin said.
Kevin Walsh, the associate director of Fair Share, said the state had not justified the extension.
The court did at least set a firm time frame, Walsh said.
"While we think the administration has really fundamentally disrespected the judiciary in a way the judiciary shouldn't tolerate, at the end of the day we have moved the ball forward," Walsh said.