In a court order released late yesterday afternoon,  the Appellate Division of the New Jersey Superior Court issued an injunction blocking the Christie Administration's raid on up to $164 million in municipal affordable housing trust funds.   The order was issued by three judges in response to an emergent application filed by Fair Share Housing Center (FSHC).

The court's decision blocks a May 1, 2013 resolution adopted by the Council on Affordable Housing (COAH) at the request of the Christie Administration.   The resolution required municipalities to turn over funds that were not "committed for expenditure," but the Administration has refused to advise municipalities or the public at large what it must do to protect the funds from seizure.  At that meeting, over fifty people showed up from people with special needs to the League of Municipalities to civil rights, environmental, and housing groups to oppose the raid on the trust funds, with not a single speaker in support. Despite that unanimous opposition from strange allies, after a closed-door session COAH approved the raid going forward.

"The Court correctly halted this process given the Administration's refusal to follow the laws on the books," said Kevin D. Walsh, Associate Director of FSHC. "This money is needed to recover from Hurricane Sandy.  More than half of the money is from the nine counties hit hardest by the storm.   The Administration is blocking homes from being built or fixed up at the worst possible time, when rents are increasing and homes are scarce."

The Court granted the injunction in response to FSHC's argument that the administration intended to take the trust funds in violation of the state's regulations for seizing municipal trust funds.  The regulations require the state to provide municipalities with notice and an opportunity to cure any defaults claimed by the state prior to seizing funds.  Municipalities were directed to hand over funds by May 22, 2013 in letters issued by the state on May 1, 2013. The administration has indicated that it intended to take the trust funds without providing an opportunity to cure any claimed problems, and refused to provide a timeline or details of what would happen if municipalities contested the funds. The court's order prohibits the state from moving forward with the seizure pending argument on the challenge.  

Municipalities have proposed to use the funds for over 3000 homes.  The funds are most often used by municipalities to support developments by organizations such as Habitat for Humanity and other community groups that help build homes for New Jersey families and people with special needs. Examples of some of the developments that would be blocked if the funds were taken include 148 affordable apartments serving Sandy victims in Middle Township, Cape May County; 120 homes for people with special needs in Edison, Middlesex County; and over 50 new Habitat for Humanity homes throughout Morris County.

"Blocking homes for people with special needs, Sandy victims, and hard-working families is wrong," Walsh added. "It's especially wrong when the Administration has ignored the law in an attempt to grab as much money as possible."

According to testimony by DCA Commissioner Richard Constable last week before the Assembly Budget Committee, the governor intended to place funds that were taken into the state's General Fund.   Once that occurred, the funds would no longer be used to support the development of homes despite the critical need for such homes after Hurricane Sandy.

This is the second time in a year that the Administration's efforts to take the trust funds have been the blocked by a court order.  After beginning a process last year to seize municipal trust funds, the State was enjoined by the Appellate Division on August 10, 2012 because the trust fund seizure was not approved by the COAH Board. 

The court's order enjoining the seizure of trust funds, which is available here, is effective immediately.  Municipalities are no longer required to comply with the May 1, 2013 letters issued by the State.  The court's order provides that the May 1, 2013 resolution "establishing a process for seizing municipal trust funds . . . is stayed pending further order of this court."

Oral argument in the appeal on the issue of whether the court's injunction should be made permanent, is scheduled for June 5, 2013 at 2 p.m. at Veteran's Courthouse, 50 W. Market Street, Room 1114, Newark.