A Superior Court judge has dismissed a sweeping lawsuit filed by more than 24 New Jersey municipalities seeking to overturn the state’s new affordable housing law, ruling that lawmakers acted within their constitutional authority when they restructured how towns must calculate and meet their housing obligations.
In an 81-page opinion issued Sept. 30, Mercer County Assignment Judge Robert Lougy dismissed with prejudice the complaints in Borough of Montvale, et al. v. State of New Jersey, rejecting arguments that the 2024 law and its accompanying court-administered Affordable Housing Dispute Resolution Program were unconstitutional.
The plaintiffs — a coalition called Local Leaders for Responsible Planning, led by the Borough of Montvale — included 27 towns from across the state. They had argued that the law, P.L. 2024, c. 2, violated separation-of-powers principles, imposed unfunded mandates, and improperly delegated judicial authority to the Administrative Office of the Courts.
Other member towns included Denville, Florham Park, Hillsdale, Millburn, Montville Township, Old Tappan, Totowa, Allendale, Westwood, Hanover, Wyckoff, Wharton, Mendham, Oradell, Closter, West Amwell, Washington, Norwood, Parsippany-Troy Hills, Franklin Lakes, Cedar Grove, East Hanover, Holmdel, Wall, Little Falls, Warren and West Caldwell.
Legislature Acted Within Its Power
Judge Lougy found that the law — which abolished the long-defunct Council on Affordable Housing and established a new process for the upcoming Fourth Round of housing plans — represented “a substantial and constitutionally permissible effort by the other branches of government to vindicate the Mount Laurel obligation.”
“The Mount Laurel doctrine recognized and enforced municipalities’ obligations to provide affordable housing,” Lougy wrote. “In no way does it operate as an upper constraint or ceiling on legislative action.”
Lougy concluded that the statute neither exceeded the constitutional duty outlined by the New Jersey Supreme Court’s Mount Laurel decisions nor imposed an unlawful burden on towns. He emphasized that participation in the new dispute-resolution program is voluntary and that municipalities retain options to litigate their obligations in court if they choose.
Standing and Claims Rejected
The ruling found that the municipalities lacked standing to challenge the new program because participation is optional. Even if standing were established, Lougy wrote, the towns’ claims failed to state a valid legal cause of action.
“The mere fact that participation in the program confers a benefit — immunity from exclusionary zoning litigation — does not render it involuntary,” the judge wrote. “The Legislature is permitted to establish carrots and sticks regarding municipal compliance with their constitutional Mount Laurel obligations.”
The court also rejected the coalition’s arguments that the law constituted special legislation favoring certain “qualified urban aid” municipalities and that it violated the unfunded mandates clause of the state constitution.
Context for the Decision
The 2024 law, signed by Governor Phil Murphy, directs the Department of Community Affairs to produce new affordable-housing calculations and gives the Judiciary’s Administrative Office of the Courts a role in resolving disputes. It replaces decades of litigation and administrative gridlock that followed the state’s landmark Mount Laurel rulings, which require every municipality to provide a “realistic opportunity” for affordable housing.
The ruling is the first major judicial interpretation of the 2024 legislation and effectively clears the way for the Fourth Round of municipal housing plans to proceed under the new system. Earlier this year municipalities scrambled to meet the June 30 deadline for round 4 proposals.
What’s Next
An attorney for the towns has indicated they plan to appeal. Meanwhile, the state’s Affordable Housing Dispute Resolution Program — staffed by retired judges including Mary Jacobson, Thomas Brogan, and Ronald Bookbinder— is continuing to review municipal filings ahead of the next statutory deadlines in 2026.
With the dismissal, the towns’ challenge is over at the trial-court level, and New Jersey’s new affordable housing framework remains intact.
