Breaking Barriers: A Comparative Analysis of Affordable Housing Compliance and Diversity in Morris and Monmouth Counties, New Jersey
New Jersey is an expensive state, with among the highest housing costs in the country. It is also one of the most segregated states in the nation by both income and race, despite being one of the most racially diverse states overall. This report explores the relationship between the enforcement of housing requirements, housing affordability, and racial and economic diversity, using a comparison between two demographically similar suburban counties that followed different trajectories in complying with affordable housing obligations.
Many towns use their zoning power to limit the variety of housing options available, allowing primarily single-family detached homes on large lots. The desire to restrict residential development arises in part from New Jersey’s fragmented school-district landscape, in which many small districts compete for a limited supply of non-residential property while trying to limit new housing that might generate school costs and cause property tax rates to rise. This “fiscal zoning” puts upward pressure on housing prices, both by restricting supply and by producing mostly large, expensive units. The resulting lack of lower-cost housing options renders many places off-limits to households of modest means, particularly Black and Hispanic households, whose incomes tend to be much lower than those for other racial subgroups. Whether motivated solely by fiscal concerns or by race- and class-based prejudices, large-lot zoning often results in segregation by both income and race.
The New Jersey Supreme Court’s Mount Laurel decisions took on the issue of racial segregation by addressing the lack of housing options. The original lawsuit resulted in a court verdict (“Mount Laurel I”) in 1975 declaring that every municipality in the state had an obligation to provide its fair share of the regional housing need for low- and moderate-income households, and that towns could not continue to zone exclusively for large, expensive single-family homes. But without strong levers for enforcement, most towns continued to resist allowing affordable housing options. This inaction generated a second lawsuit and a second verdict (“Mount Laurel II”) in 1983, which led to the passage of the Fair Housing Act in 1985 and the creation of a state government agency, the Council on Affordable Housing (COAH), to determine municipal affordable housing obligations and oversee compliance. However, the bureaucratic COAH process offered numerous opportunities for municipalities to shirk their responsibilities to produce actual housing units. For example, municipalities could petition for an obligation adjustment, or pay to shift 50% of their responsibility to other (usually lower-income) communities through Regional Contribution Agreements (RCAs).
In 1978, during the period between the two Mount Laurel decisions, the Public Advocate, the Morris County Fair Housing Council, and the Morris County branch of the NAACP filed suit against a group of Morris County municipalities for non-compliance with Mount Laurel I and their resulting persistent housing segregation. Several municipalities settled their litigation in court by 1984. After the enactment of the Fair Housing Act and the creation of COAH, most of the still pending litigation against other municipalities was transferred to COAH, which eventually approved the housing elements and fair share plans of those municipalities. Consequently, in Morris County, compliance with Mount Laurel obligations was supervised by trial courts in some municipalities and by COAH in others. But unlike in most other places, court supervision was already underway in many Morris County municipalities before Mount Laurel II was decided, and well before the creation of COAH.
This report investigates whether Morris County municipalities, with their headstart in compliance, thanks to the lawsuit predating the Mount Laurel II decision and the creation of COAH, have tended to produce more affordable housing during the COAH era from 1985 to 20151 than similar municipalities elsewhere. Specifically, the report compares the municipalities of Morris County with those of Monmouth County—another upscale, mostly suburban, predominantly white county—to see whether Morris County’s municipalities have added more affordable housing than their counterparts in Monmouth County. It also examines whether Morris County has made more progress than Monmouth toward reducing racial or economic segregation, potentially attributable to any increase in affordable housing options. Finally, it looks at whether Morris County’s public high schools have grown more racially diverse over the same time period, since segregated schools tend to be a feature of segregated towns.
The results all point in the same direction, if not always with the same magnitude: The municipalities of Morris County have indeed added more affordable housing, proportional to overall county population, than Monmouth County’s municipalities since 1985. Both counties remain whiter than the rest of the state, but Morris has made more progress than Monmouth at the municipal and high school levels toward levels of racial integration that are consistent with the rest of the state.
In terms of income diversity, Morris County outperformed Monmouth in terms of increasing the share of households in the lowest quintile of the statewide income distribution. However, even in Morris, progress has been much more modest for income than for race. This result suggests that the Mount Laurel process alone is simply not sufficient to stimulate the production of enough housing to meet the needs of households throughout the lower and middle parts of the income distribution—a much larger group than households with incomes low enough to qualify for income-restricted housing.
The increase in affordable housing units in Morris County municipalities, where such housing had previously been in short supply, did not result in an exodus of higher-income households, nor a dramatic decrease in property values. Concerns about declining property values or community character are often cited by existing residents and elected officials as justification for opposition to lower-income housing, but real-world results suggest that these concerns are unfounded.
The Mount Laurel doctrine is a unique and important tool at New Jersey’s disposal for stimulating the production of housing for households at the lower end of the income scale. Court-imposed requirements outlast individual administrations and legislators, and are therefore resistant to efforts by the other branches of government to allow municipalities to avoid fulfilling their obligations.
But the tool works best when enforced. When presented with loopholes, like some that were incorporated into the COAH process, that allow towns to evade their responsibility to provide housing options for lower-income households, many municipalities will avail themselves of the opportunity. The Morris County lawsuit suggests that, under closer scrutiny, towns can indeed be induced to produce a greater variety of housing options, thereby making themselves more affordable to a broader range of households and helping dismantle racial and economic barriers. Stakeholders should keep this in mind as the process for determining the next round of municipal Mount Laurel obligations gets underway in Spring 2024.
If New Jersey hopes to overcome its history of residential segregation and allow its statewide diversity to bear out consistently in individual municipalities and schools, meaningful enforcement of the Mount Laurel requirements to provide housing options affordable to the lower end of the income spectrum is a necessary part of the equation.
1 The Council on Affordable Housing was effectively dissolved in 2015.
