Appellate Court: Mobile Home Park Can Satisfy Affordable Housing Obligation

by: Anthony F. Della Pelle
25 Apr 2019

A New Jersey appellate court recently held that a municipality may use its eminent domain powers to seize a mobile home park in order fulfill its affordable housing obligation.  The matter involved the taking by the Township of Robbinsville of a mobile home park owned by defendant, Mercer MHC, LLC, which contained approximately 14 acres of land and a 147-unit mobile home community known as the Mercer Mobile Home Park.

This case followed on the heels of Robbinsville’s  2015 declaratory judgment action seeking an order of compliance with the Mount Laurel affordable housing doctrine and the Fair Housing Act, N.J.S.A. 52:27D-301 et seq.  In that affordable housing litigation, the Township reached a settlement approved by all involved, and the trial court retained jurisdiction to ensure compliance.  Thereafter, the Township initiated efforts to acquire the property in question, which would provide seventy affordable housing units through a deed restriction which would impose affordability controls on the mobile homes as they are sold from their current owners to new owners.  After efforts to acquire the property without litigation were unsuccessful (which included proceedings before a special master in the Mt. Laurel litigation), in 2017, the Township adopted an ordinance authorizing the acquisition, via eminent domain, of the property for the sum of $7,080,000, based upon appraisals the township had obtained.

At the Order to Show cause hearing in the trial court, the owner objected to the Township’s right to condemn the property on the bases: (a) that there was no public purpose because the taking would not increase the number of affordable units due to the fact that the units were already affordable in price; and (b) that the Township failed to satisfy its obligation to conduct bona fide negotiations pursuant to the Eminent Domain Act, N.J.S.A. 20:3-6.   The trial court held that, while the mobile homes were Inherently affordable” there was no guarantee that they would remain as such, so the deed restriction provided that guarantee in perpetuity, thus establishing a public purpose for the taking.  With respect to the owner’s objection relating to bona fide negotiations, the trial judge concluded that there were such negotiations, at least some of which involved meetings and opportunities to negotiate where the owner failed to appear or respond.

On appeal, the Appellate Division relied upon the reasoning of the trial court as to the conclusion that the taking of the property was for a valid public purpose,  both under the Fair Housing Act and the Mt. Laurel cases and their progeny.   That the taking involved a mobile home park, as opposed to land or permanent structures was of no moment to the court, nor was the fact that the  taking would be accomplished through deed restrictions instead of a fee taking or some other lesser interest in the property.   The appellate panel also affirmed the trial court’s finding that bona fide negotiations had, in fact occurred, which included several meetings and a conference with the affordable housing master.  As a result, the appellate court concluded that the taking could proceed, thus remanding the matter back to the trial court for a just compensation determination.

A copy of the Appellate Division’s opinion in Township of Robbinsville v. Mercer MHC, LLC is available here.