Articles

Unanticipated Circumstances Reveal a Constitutional Infirmity in the New Jersey Affordable Housing Program Dispute Resolution Process

December 10, 2025

Introduction

Two different Mount Laurel Judges in three separate dispute resolution program declaratory judgement actions have reached opposite conclusions on whether a property owner who was not a challenger to a municipal Housing Element and Fair Share Plan (HEFSP) can intervene in such actions and participate in the New Jersey Fair Housing Act[i] (FHA) dispute resolution process to protect its property rights. To the extent such an intervention is not allowed, the affected property owner is denied procedural due process under the Fifth and Fourteenth Amendments to the U.S. Constitution. This issue presents an ongoing problem because the FHA mandates that the dispute resolution process be utilized in all future affordable housing obligation rounds[ii]. However, the Legislature and the Administrative Office of the Courts can rectify this Constitutional infirmity by amendments to the FHA and Directive #14-24 to permit such interventions.

The Program Dispute Resolution Process

The 2024 amendments to the FHA[iii]and Directive #14-24 of the Administrative Office of the Courts (Directive) provide a mechanism, whereby municipalities can obtain certification of their HEFSPs and “interested parties” can challenge these HEFSPs[iv], referred to as the New Jersey Affordable Housing Program Dispute Resolution Process. To obtain certification of their HEFSPs as compliant with the FHA and the Mount Laurel Doctrine, through the program dispute resolution process, municipalities were required to file their HEFSPs with the New Jersey Affordable Housing Dispute Resolution Program (Program) by June 30, 2025[v]. Municipalities accomplished this by filing their HEFSPs in the declaratory judgment action that fixed their affordable housing obligation numbers[vi]. Interested parties who desired to challenge a HEFSP were required to do so by Aug. 31, 2025[vii], and made their challenges by filing an answer in the declaratory judgment action that fixed the particular municipalities’ affordable housing obligation. Neither the FHA nor the Directive indicated how such a challenge was to be filed. However, the staff of the Administrative Office of the Courts advised interested parties that challenges were to be implemented by filing an answer. If an interested party failed to meet the Aug. 31, 2025, statutory deadline for filing challenges, its challenge was to be dismissed[viii]. Interestingly, Aug. 31, 2025 was the Sunday of the Labor Day weekend, and eCourts was not functioning that weekend. This led at least one Mount Laurel Judge to hold that challenges filed on Tuesday, Sept. 2, 2025, were timely[ix]. Once all interested parties had filed timely challenges, the Program was to schedule settlement conferences for each municipality whose HEFSP had been challenged[x]. If, at such a settlement conference, a settlement among the municipality and all interested party challengers was achieved, the terms of the settlement were to be set forth in a settlement agreement, and the Program was to refer the settlement agreement to the Mount Laurel Judge of the applicable vicinage for review and the entry of an order certifying the compliance of the particular HEFSP with the FHA and the Mount Laurel Doctrine[xi]. If no settlement was achieved, the Program was to schedule a “session[xii].” As of this writing, all the settlement conferences have been scheduled and held. At those settlement conferences where significant progress was made toward a settlement, the Program scheduled follow up settlement conferences[xiii]. In others, the Program has scheduled sessions[xiv]. A session is to be scheduled 10 business days after the settlement conference[xv]. However, in practice, sessions have been scheduled substantially later[xvi]. At a session, the Program Members, who are retired Mount Laurel Judges, are to consider the pleadings and papers filed in the case as well as the legal arguments of the counsel for the municipality and for the interested parties who have filed challenges[xvii]. Generally, no testimony will be taken at a session[xviii]. The Program Member is to issue his or her decision 10 days after the session or by the statutory deadline of Dec. 31, 2025[xix]. The decision will specify the evidence on which the Program Member relied and will include a statement of reasons[xx]. Five days after the issuance of the Program’s decision, the Program will refer its decision to the applicable Mount Laurel Judge for the entry of an order accepting, rejecting or accepting/rejecting in part the Program’s decision on the HEFSP[xxi]. The Mount Laurel Judge can take testimony to resolve any factual disputes[xxii]. In the case of the challenges to municipal affordable housing obligation numbers, the Mount Laurel Judges accepted the Program’s decisions almost immediately and entered orders accepting the Program’s decisions without taking any testimony. Presumably, this will also happen with the Program’s decisions on certifying HEFSPs. Interested parties can appeal the Mount Laurel Judge’s decision to the Superior Court, Appellate Division[xxiii].

The Motions to Intervene

The aforesaid process does not, however, contemplate or account for the situation where an interested party’s challenge negatively affects the property rights of a party who is neither a municipality nor a challenger to a HEFSP. The authors are aware of at least three challenges where this circumstance has arisen: In the Matter of the Application of The Municipality of Princeton [xxiv], In the Matter of the Declaratory Judgment Action of The Township of Cranbury[xxv], and In the Matter of the Application of The Township of West Windsor[xxvi]. In all three actions, the affected parties filed motions to intervene under R. 4:33-1 and/or R. 4:33-2[xxvii]. In The Municipality of Princeton and in The Township of Cranbury, the applicable Mount Laurel Judge granted the parties’ motions to intervene, and in the case of in The Township of West Windsor, the Mount Laurel Judge denied the motion[xxviii].

The Princeton Motion to Intervene

The FHA provides that municipalities, in preparing their HEFSPs, are to comply with, among other things, the Second Round Rules of the now defunct Council on Affordable Housing (COAH)[xxix]. An interested party filed a challenge to Princeton’s HEFSP that asserted that the Tennent Campus of the Princeton Theological Seminary (Seminary) had to be removed from the HEFSP[xxx]. This challenge asserted that N.J.A.C. 5:93-4.2(e)3.i of the Second Round Rules prohibited the Seminary from ever developing affordable housing on its Tennent Campus[xxxi]. Faced with this substantial threat to its property rights, the Seminary filed an order to show cause requesting to intervene in The Municipality of Princeton dispute resolution process with the Mount Laurel Judge for the Mercer County Vicinage, The Honorable Robert T. Lougy, A.J.S.C[xxxii]. The Seminary argued that it was entitled to intervene in the case as of right under R. 4:33-1[xxxiii]. The Seminary also argued that if it was not permitted to intervene, it would be denied procedural due process under the Fifth and Fourteenth Amendments to the U.S. Constitution[xxxiv]. The Municipality of Princeton supported the Seminary’s intervention and the two challengers to the Municipality’s HEFSP did not oppose the Seminary’s motion. Judge Lougy granted the Seminary’s order to show cause and permitted the Seminary to intervene and participate in The Municipality of Princeton dispute resolution process[xxxv]. Judge Lougy held that: [t]he Court grants PTS’s [the Seminary’s] application essentially for the reasons as stated in the supporting certification. PCRD

does not oppose the relief. The Court finds that PTS is entitled to intervention as of right, per R. 4:33-1, because PTS has an “interest relating to the property … which is the subject of the action,” that interest may be impaired absent PTS’s participation, and PTS’s interest is consistent with, but separate from, the interests of the Municipality.

The Cranbury Motion to Intervene

The Honorable Thomas Daniel McCloskey, J.S.C., the Mount Laurel Judge for the Middlesex County Vicinage, reached a similar conclusion and granted the motion to intervene on short notice of John Repko in the Township of Cranbury dispute resolution process[xxxvi]. In The Township of Cranbury action, Cranbury Housing Associates, Inc. (CHA)[xxxvii], the Fair Share Housing Center (FSHC)[xxxviii], Henry Farm LLC[xxxix] and Axria Inc/Onyx Realty LLC[xl] all filed challenges to the inclusion of the Henry Farm in Cranbury’s HEFSP. CHA presented several alternative sites to the Henry Farm property as part of its challenge[xli]. One of these sites, located at 42 Cranbury Neck Road, was next to Mr. Repko’s property, and he filed a motion to intervene on short notice in the Cranbury action[xlii]. Repko argued that he was entitled to intervene in the Cranbury dispute resolution process both as of right under R. 4:33-1 and permissively under R. 4:33-2[xliii]. As in the Municipality of Princeton action, Cranbury supported Repko’s motion to intervene[xliv], but unlike in the Princeton action, interested parties CHA and FSHC vigorously opposed Repko’s motion, arguing, in part, that the FHA and the Directive prohibited such an intervention[xlv]. Notwithstanding the objections of CHA and FSHC, Judge McCloskey granted Repko’s motion to intervene[xlvi]. Judge McCloskey acknowledged that there was nothing in the FHA or the Directive that permitted or authorized intervention under R. 4:33-1 or R. 4:33-2[xlvii]. However, he stated that there was nothing in the FHA or the Directive that prohibited such intervention either[xlviii]. Judge McCloskey pointed out that Repko had no reason to file a timely challenge to Cranbury’s HEFSP because the 42 Cranbury Neck Road site was not included in it, either at the time of the filing or at the present[xlix]. He stated that Repko now wanted to participate in the upcoming Cranbury settlement conference to point out certain purported problems with including the 42 Cranbury Neck Road site in Cranbury’s HEFSP[l]. Judge McCloskey found that Repko’s participation would not prejudice or delay the dispute resolution process but rather would provide valuable information pertaining to the suitability and developability of the 42 Cranbury Neck Road site[li]. He also noted that intervention is to be liberally granted[lii]. Accordingly, Judge McCloskey granted Repko permissive in intervention The Township of Cranbury dispute resolution process[liii].

The West Windsor Motion to Intervene

Despite Judge Lougy’s earlier decision to the contrary in The Municipality of Princeton, and further contrary to Judge McCloskey’s reasoning in The Township of Cranbury, in The Township of West Windsor, Judge Lougy held that the FHA and the Directive barred the intervention of a property owner who was not challenging the West Windsor HEFSP, but whose property was included in it[liv]. An affiliate of Boston Properties (bxp) owned a parcel of land in the Carnegie Center office park that West Windsor had included in its HEFSP[lv]. Five interested parties filed challenges to the West Windsor HEFSP, several of which questioned the inclusion of bxp’s property in the HEFSP[lvi]. Unlike the intervenors in the other actions, bxp first sought the right to participate in The Township of West Windsor settlement conference from the Program Member, who denied its request[lvii]. Bxp then sought intervention as of right and permissive intervention pursuant to R. 4:33-1 and R. 4:33-2 from the Court[lviii]. In contrast to The Municipality of Princeton and The Township of Cranbury cases, West Windsor vigorously opposed bxp’s intervention[lix]. West Windsor argued that bxp’s intervention was inconsistent with the process set forth in the FHA and the Directive, that the Program Member’s denial precluded bxp’s intervention and that the intervention was premature because the Township had not yet submitted a final HEFSP[lx]. In a closely reasoned opinion, Judge Lougy held that the language of the Directive limited participation in the dispute resolution process to interested parties who had filed challenges in accordance with the FHA and the Directive[lxi]. He further buttressed his decision by noting that the Directive did not provide any procedures for addressing situations like bxp’s[lxii]. Based on this reasoning, Judge Lougy denied bxp’s requests to intervene[lxiii].

The Constitutional Infirmity and Its Remedy

Such a denial, however, has the effect of depriving bxp of its right to procedural due process under the Fifth and Fourteenth Amendments to the U.S. Constitution. The U.S. Supreme Court’s decision in Mathews v. Eldridge sets forth the standard for determining if there has been a denial of a party’s procedural due process rights[lxiv]. Mathews holds that such a determination: generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail[lxv]. In bxp’s case, it had a private interest – the ability to develop its property with an inclusionary housing development – that was affected by an official action, the implementation of the Program. If the Program were to accept the challengers’ arguments that bxp’s property was not eligible for inclusion in the Township’s HEFSP, there was arguably a substantial risk of an erroneous deprivation of bxp’s interest. Permitting parties similarly situated to bxp to intervene in the dispute resolution process would rectify this due process violation. Finally, permitting bxp to intervene in the dispute resolution process would not have created any significant fiscal and administrative burdens because it only sought to participate in a scheduled proceeding and it did not seek to delay it. Thus, under Mathews, bxp was deprived of its procedural due process rights. This issue presents an ongoing problem because the FHA mandates that the dispute resolution process be utilized in all future affordable housing obligation rounds.[lxvi] However, the Legislature could rectify this problem by amending the FHA to permit intervention by affected property owners under these circumstances, and the Administrative Office of the Courts could amend the Directive or issue a future directive that provides procedures and time limits for such interventions. These are steps well worth taking because the dispute resolution process, in practice, negatively affects the property rights of parties other than initial challengers to HEFSPs.

[i] N.J.S.A. 52:27D-301 et seq. [ii] N.J.S.A. 52:27D-304.1.f(2)(b [iii] N.J.S.A. 52:27D-301 et seq. [iv] N.J.S.A. 52:27D-304.1.f(2)(a) & (b); Directive III.A & B. [v] N.J.S.A. 52:27D-304.1.f(2)(a); Directive III.A. [vi] Directive III.A. [vii] N.J.S.A. 52:27D-304.1.f(2)(b); Directive III.B. [viii] Directive III.B. [ix] See In the Matter of the Declaratory Judgment Action of The Township of Cranbury, MID-L-000525-25, MID-L-003824-25 (Law Div.). [x] Directive III.E. [xi] Ibid. [xii] Ibid. [xiii] See e.g. In the Matter of the Declaratory Judgment Action of The Township of Cranbury, MID-L-000525-25, MID-L-003824-25 (Law Div). [xiv] See e.g. In the Matter of the Application of The Municipality of Princeton, MER-L-000207-25 (Law Div.); In the Matter of the Application of The Borough of Watchung. [xv] Directive III.F. [xvi] See e.g. In the Matter of the Application of The Municipality of Princeton, MER-L-000207-25 (Law Div). [xvii] Directive III.F. [xviii] Ibid. [xix] Ibid. [xx] Ibid. [xxi] Ibid. [xxii] Ibid. [xxiii] Ibid. [xxiv] MER-L-000207-25 (Law Div). [xxv] MID-L-000525-25, MID-L-003824-25 (Law Div). [xxvi] MER-L-000204-25 (Law Div). [xxvii] MER-L-000207-25 (Law Div); MID-L-000525-25, MID-L-003824-25 (Law Div); MER-L-000204-25 (Law Div). [xxviii] Ibid. [xxix] N.J.S.A. 52:27D-311.m. [xxx] MER-L-000207-25, LCV20252378998. [xxxi] Ibid. [xxxii] Ibid. at LCV20252651955. [xxxiii] Ibid. [xxxiv] Ibid. [xxxv] Ibid. at LCV20252701068. [xxxvi] MID-L-000525-25, MID-L-003824-25 (Law Div), LCV20252884008. [xxxvii] Ibid. at LCV20252383255. [xxxviii] Ibid. at LCV20252378945. [xxxix] Ibid. at LCV20252378776. [xl] Ibid. at LCV20252386938 [xli] Ibid. at LCV20252383255. [xlii] Ibid. at LCV20252799153. [xliii] Ibid. at LCV20252799153. [xliv] Ibid. at LCV20252884008. [xlv] Ibid. at LCV20252850850; LCV20252871118. [xlvi] Ibid. at LCV20252884008. [xlvii] Ibid. at p. 6. [xlviii] Ibid. [xlix] Ibid. at p. 7. [l] Ibid. [li] Ibid. [lii] Ibid. at p. 9. [liii] Ibid. at p. 11. [liv] MER-L-000204-25 at p. 2. [lv] Ibid. at p. 3. [lvi] Ibid. [lvii] Ibid. at pp. 3-4. [lviii] Ibid. at pp. 4-5. [lix] Ibid. at pp. 5-6. [lx] Ibid. [lxi] Ibid. at pp. 12-13. [lxii] Ibid. [lxiii] Ibid. at p. 14. [lxiv] 424 U.S. 319, 332-333, 335 (1976). [lxv] Ibid. at 335. [lxvi] N.J.S.A. 52:27D-304.1.f(2)(b