Appellate Division Holds Affordable Housing Qualifies as “Inherently Beneficial Use” in Use Variance Applications

By: Henry T. Chou, Esq.

On August 24, 2009, the Appellate Division issued a decision in Homes of Hope v. Eastampton Land Use Planning Board that makes it harder for municipal land use boards to deny use variance applications by developers seeking to build affordable housing. At issue in the lawsuit was whether a 100% affordable housing project proposed by a non-profit developer should have been considered an “inherently beneficial use” by the Eastampton Land Use Board when evaluating the developer’s use variance application.

To obtain a use variance, i.e., approval for a use not specifically permitted under the zoning ordinance, an applicant needs to demonstrate that its proposed project meets both the “positive” and “negative” criteria required by the Municipal Land Use Law. To satisfy the positive criteria, an applicant must show that the site is specially suited for the proposed use. The negative criteria requires the applicant to demonstrate that the proposed use will not pose a substantial detriment to the public good and will not substantially impair the purpose of the master plan and zoning ordinance.

Typically, an affordable housing development included in a town’s COAH-approved compliance plan is considered an “inherently beneficial use” in the same vein as hospitals and schools, with such status presumptively satisfying the positive criteria without the need to show that the site is specially suited for affordable housing. The Appellate Division’s decision in Homes of Hope extends the “inherently beneficial use” status to affordable housing developments that are not part of a town’s COAH compliance plan, i.e., proposed affordable housing that is in excess of the required number of affordable housing units assigned to a town by COAH. The Appellate Division based its holding on the rationale that additional affordable housing is no less beneficial to society just because a town has already satisfied the minimum numerical requirement imposed by COAH.

However, it unclear whether the court’s holding applies the “inherently beneficial use” status only to 100% affordable housing projects (developments that consist entirely of affordable units) or whether it also applies to “inclusionary developments” (developments that contain both market-rate units and affordable units). If the holding applies to inclusionary developments, it could motivate private developers to seek use variances for inclusionary developments on a more widespread basis, and lead to the creation of more affordable housing in the State.

The Appellate Division has remanded the matter back to the Eastampton Land Use Board for further consideration of the use variance application based on the “inherently beneficial use” status of the proposed affordable housing. It seems certain that the Board will petition the Supreme Court for certification of the Appellate Division’s decision. In the meantime, municipal officials across the State are convinced that Appellate Division’s ruling – if left untouched or upheld by the Supreme Court – will make it easier for developers to obtain use variances to build affordable housing, which they fear will generate children and overburden existing schools.

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