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                      TO BE FILED: 7/28/02 (CJ)

Toll Brothers, Inc. (Toll Brothers) owns a 293-acre tract of land located in the Township. In 1993, Toll Brothers filed this lawsuit alleging that the Township had engaged in an unconstitutional pattern of exclusionary zoning that violated Mount Laurel I (municipalities must provide a realistic opportunity for development of affordable housing), Mount Laurel II (permitting, under certain conditions, a builder to seek court approval for construction that will include affordable housing, i.e., the builder's remedy), and the Fair Housing Act (FHA). Prior litigation against the Township had resulted in a 1984 judgment establishing the Township's requisite number of affordable housing units. That number was modified by methodology adopted by the Council on Affordable Housing (COAH), an agency created by the FHA to oversee the development of affordable housing through voluntary municipality participation. To meet its fair share requirement, the Township adopted in 1985 a housing plan and various zoning amendments. Eleven sites were zoned for developments that would include affordable housing (inclusionary zones). By 1994, however, only two of the eleven sites had been developed, while a large number of conventional single-family, high-priced homes had been built in non-inclusionary zones. Toll Brothers argued, in part, that the low development rate for the construction of affordable housing was due to the Township's failure to include conventional single-family houses on small lots in its zoning for inclusionary sites, despite the strong market demand for them. The builder's remedy sought by Toll Brothers would require the rezoning of the site to permit single-family detached houses on small lots along with affordable rental units that would consist of both single family zero lot-line housing and detached homes.

After a bench trial, the trial court concluded that the Township had met 241 units of its 929-unit fair share housing obligation. The sole means of meeting the remaining obligation was the nine remaining sites, none of which possessed zoning that permitted the construction of conventional single-family detached housing. The trial court evaluated the nine sites to determine whether the Township was providing, in fact, a realistic opportunity for the development of affordable housing. In so doing, the trial court considered (1) unnecessary cost-generating site development standards unrelated to health or safety; (2) restrictions on the type and mix of housing permitted; (3) infrastructure requirements; (4) environmental constraints; and (5) access to water and sewer services at a reasonable cost. Based on its assessment of the number of affordable housing units each site could reasonably support, the court determined that the Township was not in compliance with its present affordable housing obligation and awarded Toll Brothers a builder's remedy. In respect of the single-family detached housing issue, the court found it proper to consider housing-type market demand as a factor in determining whether the Township had provided a realistic opportunity for the development of affordable housing. The court found that the Township's almost exclusive reliance on multi-family housing, despite the slight demand for it, provided little incentive for the owners of inclusionary sites to commence development. The court concluded further that the Township's sewer construction requirements created a disincentive to development, the Township improperly counted sites lacking common ownership that could not be approved for construction unless they were assembled, and that environmental constraints on construction must be considered in calculating the number of units that could be constructed.

The Appellate Division affirmed, substantially for the reasons expressed by the trial court. 334 N.J. Super. 109 (2000). In an unpublished portion of the opinion, the Appellate Division also rejected the Township's argument that Toll Brothers was not entitled to a builder's remedy because it had failed to act in good faith.

The Supreme Court granted certification limited to whether the Township's ordinances, regulations and site factors prevented a realistic opportunity for development of affordable housing; whether market demand for particular housing types was properly considered; and whether Toll Brothers was entitled to a builder's remedy. The Court declined consideration of issues raised by parties that participated as amici curiae.

HELD : The trial court correctly found that the Township of West Windsor violated the New Jersey Constitution and the Fair Housing Act of New Jersey by preventing a realistic opportunity for development of affordable housing through its ordinances, regulations and site factors regulating the development of property. Plaintiff satisfied the requirements for the grant of a builder's remedy.

1. The New Jersey Constitution bars municipalities from using land use regulations to hinder the construction of affordable housing, thereby excluding low and moderate income persons from their towns. Under the Mount Laurel doctrine, a municipality is responsible for promulgating appropriate land use ordinances under which a developer could be expected to construct the municipality's fair share of affordable housing. The builder's remedy is a judicial remedy for enforcement of the Mount Laurel doctrine. It serves as an incentive to private developers to challenge a municipality's zoning ordinances. (Pp. 48 to 55).

2. Pursuant to the FHA, COAH is charged with estimating the State and regional present and prospective need for affordable housing and with adopting criteria and guidelines for determining a municipality's present and prospective fair share of the region's housing need. COAH provides a review and mediation process to resolve Mount Laurel disputes. When a plaintiff files a Mount Laurel challenge in the Superior Court, the plaintiff must also file a notice to request review and mediation with COAH. Municipalities not faced with a Mount Laurel challenge may seek COAH review of their zoning and affordable housing regulations to receive a degree of protection from future challenge. If COAH finds that the municipality's housing element provides a realistic opportunity for the development of affordable housing units equal to its fair share obligation, substantive certification is granted and a ten-year presumption of validity of the municipality's plan attaches. That presumption may be overcome in subsequent litigation only by clear and convincing evidence. (Pp. 55 to 62).

3. Case law, the FHA, and COAH all recognize that the realistic opportunity evaluation cannot be made in a theoretical vacuum. Zoning for affordable housing that cannot or will not be built by private developers, who are motivated by profit, does not satisfy a municipality's Mount Laurel obligation. Here, in assessing whether a municipality's zoning ordinances are exclusionary, the trial court properly considered market demand. There was substantial evidence to support the trial court's holding that market demand for multi-family housing would not provide a realistic opportunity for the development of affordable housing. The Court emphasizes, however, that the use of market demand is a factor in the court's evaluation and not an end unto itself. (Pp. 62 to 73).

4. The trial court correctly disregarded N.J.A.C. 5:93-3.5(b), a COAH regulation, in its evaluation of eight undeveloped sites included in the original compliance plan. By its very terms, that regulation is not applicable because it applies only when a municipality and a developer of a previously certified site have mutually agreed to alter the permitted zoning density. (Pp. 73 to 76).

5. The Township's sewer construction and financing requirements were unduly cost-generative and therefore presented a significant impediment to the potential development of affordable housing. (Pp. 76 to 77).

6. The builder's remedy is a means to accomplish what a municipality might otherwise have been unable or unwilling to do itself. Although the Court has expressed support for COAH-resolution of Mount Laurel disputes, there has not been universal municipal participation in the COAH process. When a municipality does not avail itself of the COAH processes and protections, it remains vulnerable to a Mount Laurel challenge. Here, Toll Brothers satisfied the Mount Laurel II requirements for the grant of a builder's remedy. The Township did not establish that Toll Brothers acted in bad faith by not applying to the Planning Board for variances. The site was not a good candidate for variances, and Toll Brothers communicated with the Planning Board prior to commencing litigation and throughout the summer and fall of 1993 regarding this issue. (Pp. 78 to 90).

The judgment of the Appellate Division is AFFIRMED.

JUSTICE STEIN, concurring in part and dissenting in part, joined by JUSTICE ZAZZALI, agrees with the Court's disposition of the three certified questions, including its determination that Toll Brothers was entitled to a builder's remedy, but believes that the specific remedy granted to Toll Brothers was insufficient to address the housing needs of low income households.

JUSTICES COLEMAN, LONG, VERNIERO, and LaVECCHIA join in CHIEF JUSTICE PORITZ's opinion. JUSTICE STEIN filed a separate opinion concurring in part and dissenting in part, in which JUSTICE ZAZZALI joins.

TOLL BROTHERS, INC., a Delaware Corporation,

Plaintiff-Respondent,

v.

TOWNSHIP OF WEST WINDSOR, a Municipal Corporation of the State of New Jersey located in Mercer County, MAYOR AND COUNCIL OF THE TOWNSHIP OF WEST WINDSOR, and THE PLANNING BOARD OF THE TOWNSHIP OF WEST WINDSOR,

Defendants-Appellants.

Argued November 27, 2001 – Decided August 1, 2002

On certification to the Superior Court, Appellate Division, whose opinion is reported at 334 N.J. Super. 109 (2000).    

Karen L. Cayci and Michael J. Herbert argued the cause for appellants Township of West Windsor and Mayor and Council of the Township of West Windsor (Herbert, Van Ness, Cayci & Goodell, attorneys).

Gerald J. Muller argued the cause for appellant Planning Board of the Township of West Windsor (Miller, Porter & Muller, attorneys).

Carl S. Bisgaier and Henry A. Hill, Jr. argued the cause for respondent (Hill Wallack and Flaster Greenberg Wallenstien Roderick Zuckerman Skinner & Kirchner, attorneys; Mr. Hill and Kenneth E. Meiser, on the briefs).

Howard D. Cohen argued the cause for amicus curiae American Planning Association and its New Jersey Chapter (Stern Greenberg & Kilcullen, attorneys).

Edwin W. Schmierer argued the cause for amicus curiae New Jersey State League of Municipalities (Mason, Griffin & Pierson, attorneys; Trishka Waterbury, on the brief).

Peter J. O'Connor argued the cause for amici curiae Southern Burlington County NAACP, Camden County NAACP and Fair Share Housing Development (Mr. O’Connor, attorney; Mr. O’Connor and Kevin D. Walsh, on the brief).

John M. Payne argued the cause for amici curiae Housing and Community Development Network of New Jersey, Coalition for Affordable Housing and the Environment, Association of New Jersey Environmental Commissions, Regional Planning Partnership and New Jersey Future (Ann Alexander, Acting Director, Rutgers Environmental Law Clinic, attorney; Mr. Payne and Susan J. Kraham, on the brief)

The opinion of the Court was delivered by
PORITZ, C.J.
This is a second round Mount Laurel exclusionary zoning case brought by Toll Brothers, Inc. (Toll Brothers) against the Township of West Windsor, the Township Committee of the Township of West Windsor, and the Planning Board of the Township of West Windsor (collectively “West Windsor” or the “Township”). Toll Brothers, the owner of a 293 acre tract of land located in West Windsor, alleged below that the Township had engaged in exclusionary zoning in violation of the New Jersey Constitution and the Fair Housing Act of New Jersey (FHA), N.J.S.A. 52:27D-301 to –329, and sought a builder’s remedy from the trial court. Toll Bros., Inc. v. Township of West Windsor, 303 N.J. Super. 518, 526-27 (Law Div. 1996) (West Windsor). Following a bench trial, the court concluded that West Windsor was “not in compliance with the Mount Laurel mandate, and thus . . . [had] violat[ed] . . . the New Jersey Constitution and the New Jersey Fair Housing Act.” Id. at 574. Based on that finding, the trial court held that Toll Brothers was entitled to a builder’s remedy, the specifics of which were to be addressed at a later date. Id. at 575-76.
The Appellate Division affirmed, Toll Bros., Inc. v. Township of West Windsor, 334 N.J. Super. 109 (App. Div. 2000), and we granted certification limited to the issues of whether West Windsor’s ordinances, regulations, and site factors prevented a realistic opportunity for development of affordable housing; whether market demand for particular housing types should have been considered in making that determination; and, whether Toll Brothers was entitled to a builder’s remedy. Toll Bros., Inc. v. Township of West Windsor, 167 N.J. 599 (2001) (granting certification in part on limited issues); Toll Bros., Inc. v. Township of West Windsor, 167 N.J. 600 (2001) (same).

I. Mount Laurel and Affordable Housing Litigation. . . . 5

II.     The Fair Housing Act and the Council on
     Affordable Housing . . . . . . . . . . . . . . . . . 8

III.     The Prior and Present Litigation. . . . . . . . . . . 9

     A.     The Prior Litigation. . . . . . . . . . . . . . . 9
     B.     The Present Litigation. . . . . . . . . . . . . . 13
         1. Site-by-Site Evaluation.. . . . . . . . . . . 23
          2.    Market Demand . . . . . . . . . . . . . . . . 33
         3.    Sewer Policies. . . . . . . . . . . . . . . . 38
         4.    Assemblage. . . . . . . . . . . . . . . . . . 42
         5.    Environmental Constraints . . . . . . . . . . 42
     C.     The Appellate Division Decision . . . . . . . . . 43

IV.     The Mount Laurel Doctrine . . . . . . . . . . . . . . 48

V.     The Certified Questions . . . . . . . . . . . . . . . 62

A. Whether the Trial Court Erred in Concluding
    that the Township Failed to Provide a Realistic Opportunity for the Development of Affordable
    Housing and in Considering Market Demand for Particular Housing Types in Making That
         Determination . . . . . . . . . . . . . . . . . . 63
     1. Market Demand . . . . . . . . . . . . . . . . 65
     2. Housing Yield . . . . . . . . . . . . . . . . 73
     3. Sewer Policies. . . . . . . . . . . . . . . . 76
     4. Summary . . . . . . . . . . . . . . . . . . . 77

B.    Whether the Trial Court Erred in Holding
    that Toll Brothers is Entitled to a
    Builder’s Remedy. . . . . . . . . . . . . . . . . 78

VI. Conclusion. . . . . . . . . . . . . . . . . . . . . . 89

plaintiff asks this court to look beyond the face of defendant’s assertedly inclusionary zoning. It asks for consideration of numerous factors -- environment, infrastructure, market demand, municipal policy and other zoning-related factors -- for a finding that defendant is deficient in its affirmative duty under the Mount Laurel cases. It asks for a builder’s remedy to permit development of its property in a more cost-effective, market-responsive manner than defendant’s current zoning allows.

[Id. at 549 (quoting Mount Laurel II, supra, 92 N.J. at 222-23) (emphasis added by trial court).]

The court then concluded:

Although the affordable housing plan and inclusionary sites at issue here have not previously failed any test of compliance in court, they have now failed the test of time. Since the prior judgment of compliance was entered approximately one decade ago, most of defendant’s
inclusionary sites have failed to develop despite a housing boom. Defendant’s affordable housing plan enjoyed a presumption of validity through the first cycle; defendant must now, in this second cycle, explain why the sites have failed to produce housing. Although plaintiff bears the burden of coming forward and presenting a prima facie case as to sites not previously credited, defendant bears the burden of explaining the failure to develop sites for which it received credit ten years ago.

    [Id. at 550 (footnote omitted).]

the question of marketability after costs [of building], and thus market demand, has always been a [proper] consideration [for the realistic development opportunity inquiry], implicitly if not explicitly. If this were not the case, municipalities could engage in exclusionary zoning by simply zoning extensively for “inclusionary” development of a housing type for which there is little or no demand. Neither the Supreme Court nor COAH contemplated or would tolerate such a result.

“N.J.A.C. 5:93-5.6(b) does not establish an inflexible standard that requires all sites to be zoned for a single-family inclusionary product. The rule establishes criteria that should be considered by the municipality and will be considered by [COAH] in determining the appropriate zoning for a specific site. The factors to be considered include land use planning considerations and a consideration of the current market. After consideration of these factors, [COAH] may require that a substantial percentage of inclusionary sites be zoned to allow market units within an inclusionary development to be constructed as single-family detached units.”

[West Windsor, supra, 303 N.J. Super. at 546-47 (quoting 26 N.J.R. 2304 (June 6, 1994)) (emphasis added by the trial court).]

    [Id. at 573 (emphasis added
by the trial court).]

        3. Sewer Policies
In reaching its conclusion that West Windsor’s sewer construction and financing requirements were unduly cost-generative, and thus a disincentive to development, the trial court discussed the difficulties facing the developers of Sites 1, 2, 5A, 6, 7, and 8, the six inclusionary sites “dependent on the extension of [the] Duck Pond Run [Interceptor].” Developers of those sites were required to provide a gravity fed system that would be “deeper and more expensive than a pumped system.” Further, the developers had to oversize the system to accommodate possible future development, and at least initially were required to absorb all of the costs associated with the system.
Plaintiff’s and defendant’s experts differed on the actual dollar amounts required to serve those sites, especially in respect of “soft costs,” such as acquisition, engineering, and legal fees. Toll Brothers’ engineer testified that the cost of running the sewer line to each of the inclusionary sites in the Township’s plan ranged from $553,587 to $3,880,141. By way of example, Toll Brothers estimated that the PRRC site “would involve front end costs of well over $3,000 per inclusionary unit and $15,000 per market rate unit.” Plaintiff’s expert offered testimony, which the court accepted as accurate, that a “front-ended” cost of more than $1,500 per unit “is excessive and constitutes a serious impediment to development of Mount Laurel housing.”
West Windsor did not agree that its policies were unduly cost-generative and a disincentive to development, arguing that the inclusionary sites did indeed “have access to water and sewer infrastructure” by means of West Windsor’s construction program for two interceptors -- the Delaware and Raritan Canal Interceptor and the North Branch of the Duck Pond Run Interceptor. Under that program, extensions to the line were to be constructed by developers, “with a cost-sharing arrangement among them.” West Windsor contended that its “system works well and . . . that it is reasonable to expect that the line will continue to be built.” It informed the court that, as of the time the original compliance plan was developed, “the line’s terminus was west of Route 1, approximately 13,800 feet, or almost three miles, from the closest Mount Laurel site -- the La Placa site” (Site 5A), whereas “the line is now on the east side of Route 1 and 900 feet from the La Placa site” because of development in the interim and the consequent construction of the line. Based on that history, the Township anticipated that the line would continue to be “extended during this fair share period on the basis of prospective development activity along the unbuilt portion of the line.” For that to happen, however, the six inclusionary sites would have to develop sequentially, with the site closest to the existing line (Site 5A) developing first. If that occurred, construction costs would be minimized because each property would be responsible only for extending the line from an adjacent property. The trial court rejected that scenario as “conjecture” that “cannot be a basis for affirmatively providing a realistic opportunity for the development of affordable housing.”
West Windsor’s Township Engineer testified that even
though West Windsor’s “reimbursement plan require[d] significant ‘front’ money . . . [that] add[ed] to the costs of development[,] . . . waivers [could be] granted . . . [if] ‘there [is] no feasible alternative.’” Toll Brothers’ expert however, “pointed out that while defendant had granted a number of waivers . . . to developers elsewhere in the Township, such waivers had not been granted to inclusionary developers along Duck Pond Run.” The court concluded that it did not find the testimony offered by the Township Engineer to be credible, but “[m]ore to the point, inclusionary developers should not be dependent on municipal waivers or variances.”
In sum, the court found the cost estimates of the Toll Brothers’ engineer to be “reasonable and conservative,” and agreed with the Special Master’s assessment that West Windsor’s sewer financing plan “‘appears to discourage housing production and is cost-generative.’” The court added that “[t]he impact of defendant’s sewer program in the context of this case is that it serves as a significant impediment to providing a ‘realistic opportunity’ for inclusionary housing construction.”
        4. Assemblage
The court found that land assemblage affected the development potential of Sites 2, R-3A, 7, and 8. The housing projections and yields calculated by West Windsor’s expert “assume[d] development of these zones as if they were in single ownership.” Notably, that the parcels in Sites 2, R-3A, 7, and 8 were in different ownership was “disclosed only as a result of plaintiff’s expert report and cross-examination.” The court concluded that what is required by the “Mount Laurel mandate, the Fair Housing Act and COAH rules . . . is a site specific evaluation,” citing for support “COAH’s rule that sites [and not merely “zones”] be developable, suitable, approvable and available . . . .” Because under West Windsor’s expert’s projections the sites could not be approved unless they were assembled, the court held that “[t]he sites where assemblage is a significant issue are . . . not ‘approvable.’”     
        5. Environmental Constraints
The Special Master recognized that environmental constraints must be considered “in order to properly assess site yields and potential unit counts in [West Windsor’s] inclusionary zones.” Thus, he required that West Windsor furnish “environmental documentation and site yield plans for each site.” West Windsor objected to that requirement, describing it as “excessive” and in conflict with COAH’s regulations, under which, it argued, site yield calculations would have been based simply on the “gross density of the total tract.” The trial court determined that some environmental constraints existed on most of the sites. In light of that fact, the court concluded that “a site yield based on allowable gross density alone would not reflect the reality of the sites.”

    C. The Appellate Division Decision
The Appellate Division affirmed the trial court’s decision

substantially for the reasons expressed by Judge Carchman in his comprehensive reported opinion and in the unreported portion of the opinion dated October 16, 1996. The judge’s findings of fact are supported by substantial credible evidence in the record[,] . . . [and h]is conclusions, based on those findings, are legally sound.

[West Windsor, supra, 334 N.J. Super. at 111-12 (internal citation omitted).]

In an unpublished portion of its opinion the appellate court also addressed “issues not raised below and those which arose after Judge Carchman delivered his reported opinion.” ^{See footnote 12} Id. at 112. Most relevant to the instant matter, West Windsor argued before the appellate tribunal that “Toll Brothers was not entitled to a builder’s remedy because it failed to act in good faith.” The Township claimed that under Mount Laurel II, “good faith” is a prerequisite for the granting of a builder’s remedy. More specifically, West Windsor relied on the following language from Mount Laurel II, supra, 92 N.J. at 218, quoted and emphasized by the Appellate Division in its unpublished opinion:

Builder’s remedies will be afforded to plaintiffs in Mount Laurel litigation where appropriate, on a case-by-case basis. Where the plaintiff has acted in good faith, attempted to obtain relief without litigation, and thereafter vindicates the constitutional obligation in
Mount Laurel-type litigation, ordinarily a builder’s remedy will be granted . . . .

    The Appellate Division rejected West Windsor’s argument, noting that Toll Brothers had met the three requirements for a builder’s remedy -- “(1) it succeed[ed] in Mount Laurel litigation, (2) it propose[d] a project with a substantial amount of affordable housing, and (3) [its] site is suitable, i.e., the municipality fail[ed] to meet its burden of proving that the site is environmentally constrained or construction of the project would represent bad planning.” The court further observed that it was “unaware of any case where a builder has met the three-prong [builder’s remedy] test and failed to act in good faith,” and acknowledged the difficulty, in any event, of “‘proving that a suit has been brought unnecessarily or as a leverage mechanism.’”
Nonetheless, the court conducted a review of the record and failed to find evidence that Toll Brothers had acted in bad faith. Most significant, it recounted that

[b]eginning in September 1992, Toll Brothers corresponded with the Planning Board concerning a plan for developing site 6 with 670 single-family dwellings, which would generate 100 affordable units. In December 1992, it presented the Board with a conceptual plan for 671 single-family dwellings, fifty affordable rental units and satisfaction of the additional fifty units through a Regional Contribution Agreement. Thereafter, Toll Brothers withdrew its request to rezone the property because the Township’s interest and cooperation began to diminish in December 1992, and the Township Planner’s report of March 17, 1993, was highly critical and completely unsupportive of the rezoning proposal. Throughout the summer and fall months of 1993, Toll Brothers continued communications with the Planning Board, cautioning that amended zoning ordinances would be necessary to implement the project. During case management conferences, Toll Brothers’ counsel stated that it would very much like to “settle the case[.]” . . . Clearly, it was to Toll Brothers’ advantage to reach a settlement, rather than commit to several years of litigation.

(1) whether the trial court erred in concluding that the Township’s ordinances, regulations, and site factors prevented a realistic opportunity for development of affordable housing;

(2) whether the trial court erred when it considered market demand for particular housing types when it determined that the Township failed to provide a realistic opportunity for development of affordable housing; and
(3) whether the trial court erred in holding that Toll Brothers was entitled to a builder’s remedy.

[West Windsor, supra, 167 N.J. at 599; West Windsor, supra, 167 N.J. at 600.]

    Subsequently, various parties were granted permission to participate as amici curiae, including the American Planning Association and its New Jersey Chapter; the New Jersey State League of Municipalities; the Southern Burlington County NAACP, the Camden County NAACP, and the Fair Share Housing Development; and the Housing and Community Development Network of New Jersey, the Coalition for Affordable Housing and the Environment, the Association of New Jersey Environmental Commissions, the Regional Planning Partnership, and the New Jersey Future (collectively represented by the Rutgers Environmental Law Clinic). Those amici raise a number of issues in addition to the three questions certified by this Court, including, among others, that households earning less than forty-five percent of the median income are excluded from affordable housing; that attorneys fees should be awarded to successful non-profit Mount Laurel plaintiffs; that regional contribution agreements have exacerbated racial segregation and violate federal and state laws against discrimination; that COAH should make better use of public sector programs and non-profit developments; and that COAH should employ a growth share method to calculate fair share obligations. Although we appreciate the importance of the concerns raised, those issues are not before the Court and will not be considered in this case. R. 1:13-9. We would be reluctant to review matters of such consequence in any case where a record had not been fully developed by the parties in the trial courts, and where COAH, the agency whose regulatory policies are implicated, was not a participant.

The same question arises with respect to any number of other municipalities of sizeable land area outside the central cities and older built-up suburbs of our North and South Jersey metropolitan areas (and surrounding some of the smaller cities outside those areas as well) which, like Mount Laurel, have substantially shed rural characteristics and have undergone great population increase since World War II, or are now in the process of doing so, but still are not completely developed and remain in the path of inevitable future residential, commercial and industrial demand and growth.

validly, by a system of land use regulation, make it physically and economically impossible to provide low and moderate income housing in the municipality for the various categories of persons who need and want it and thereby . . . exclude such people from living within its confines because of the limited extent of their income and resources.

a brief reminder of the judicial role in this sensitive area is appropriate, since powerful reasons suggest, and we agree, that the matter is better left to the Legislature. We act first and foremost because the Constitution of our State requires protection of the interests involved and because the Legislature has not protected them.

As discussed earlier, supra at ___ (slip op. at 8), the Legislature responded in July 1985 by enacting the FHA. Under that statute COAH was charged with, among other things, determining State housing regions, N.J.S.A. 52:27D-307a, estimating the State and regional present and prospective need for low and moderate income housing, id. at -307b, and adopting criteria and guidelines for a “[m]unicipal determination of its present and prospective fair share of [the region’s] housing need.” Id. at -307c(1).
COAH’s review and mediation process is considered by the Legislature to be the preferred method for resolution of Mount Laurel disputes. Id. at -303. When a Mount Laurel challenge is filed in the Superior Court, the plaintiff must also “file a notice to request review and mediation with” COAH. Id. at
-316b. If the municipality adopts a “resolution of participation,” then the plaintiff must exhaust “review and mediation . . . before being entitled to a trial on [the] complaint.” Ibid.
Municipalities not faced with a Mount Laurel challenge may seek COAH review of their zoning and affordable housing regulations, id. at -314, in order to receive a degree of protection from a future challenge. See id. at -317a. A municipality may voluntarily seek substantive certification from COAH, id. at -313, after consenting to COAH’s jurisdiction by submitting a resolution of participation, a housing element, ^{See footnote 14} and a proposed fair share housing ordinance implementing the housing element. N.J.S.A. 52:27D-309. After review, if COAH finds that the municipality’s housing element provides a realistic opportunity for the development of affordable housing units equal to its fair share obligation, substantive certification is granted, id. at -314, thereby establishing a presumption of validity for a ten-year period that may be overcome in subsequent litigation only by clear and convincing evidence. See id. at -317a; id. at -313a. A municipality may attempt to meet its affordable housing obligation by any method designed to achieve that end, but must at least consider nine specific techniques, including “rezoning for [higher] densities necessary to assure the economic viability of any inclusionary developments.” Id. at -311a(1). Further, a municipality may, through a Regional Contribution Agreement, “propose the transfer of up to 50% of its fair share to another municipality within its housing region.” Id. at -312a.
    Both the FHA and COAH’s regulations address the necessary components of a municipal housing element. At a minimum, it must contain detailed information in respect of present housing inventory, a ten-year projection of the anticipated housing stock, and an analysis of the demographic and employment characteristics of the municipality. Id. at -310a to -310d; N.J.A.C. 5:93-5.1(b)1 to -5.1(b)4. When a municipality’s housing element purports to create “new low and moderate
income units within [its] borders by sponsoring their construction . . . or by zoning for inclusionary development,” id. at -5.3(a), or if the municipality has included in its housing element a “municipally sponsored [affordable housing] construction [and gut rehabilitation] program,” additional and substantial data must be submitted to COAH. Id. at -5.5(a). If the housing element contains inclusionary zoning, each site must be described, existing environmental constraints must be identified, and details regarding available infrastructure must be supplied. Id. at -5.3(c)1 to -5.3(c)3. The municipality also must furnish data for each site in respect of “the total number of housing units; the gross and net density of the proposed development; the total number of low and moderate income units; and the number of low and moderate income units that will be for sale and for rent.” Id. at -5.3(c)4. Similarly, if a municipality has included in its plan a municipally sponsored affordable housing construction and rehabilitation program, it must provide site-specific information, such as documentation “that there is municipal control of the site(s); an administrative mechanism to construct the proposed housing; a funding plan and evidence of adequate funding capacity; and timetables for construction of the units.” Id. at -5.5(a).
COAH’s review process is extensive and probing. By way of example, COAH’s consideration of a municipality’s plan to zone for inclusionary development covers

the existing densities surrounding the proposed inclusionary site; the need for a density bonus in order to produce low and moderate income housing; whether the site is approvable, available, developable and suitable . . . ; the site’s conformance with the [State Development and Redevelopment Plan] . . . ; the existence of steep slopes, wetlands and floodplain areas on the site; the present ability of a developer to construct low and moderate income housing at a specific density; the length of time an inclusionary site has been zoned at a specific density and set-aside without being developed; and the number of inclusionary sites that have developed within the municipality at specific densities and set-asides.

Instead of varying and potentially inconsistent definitions of total need, regions, regional need, and fair share that can result from the case-by-case determinations of courts involved in isolated litigation, an overall plan for the state is envisioned, with definitions and standards that will have the kind of consistency that can result only when full responsibility and power are given to a single entity.

The argument has as its premises that the Act depends on the voluntary cooperation of municipalities, that the lack of an assured builder’s remedy will result in a total loss of interest on the part of builders, which in turn will mean that there will be no construction, and, ultimately, that there will never be lower income housing through any device other than a builder’s remedy. If true, this attack is substantial.

    Thus, what appears at first to be simply an option available to municipalities is more realistically a procedure that practically all municipalities with a significant Mount Laurel obligation will follow, both to determine and to satisfy their Mount Laurel obligation.

(1) whether the trial court erred in concluding that the Township’s ordinances, regulations, and site factors prevented a realistic opportunity for development of affordable housing;

(2) whether the trial court erred when it considered market demand for particular housing types when it determined that the Township failed to provide a realistic opportunity for development of affordable housing; and

(3) whether the trial court erred in holding that Toll Brothers was entitled to a builder’s remedy.

[West Windsor, supra, 167 N.J. at 599; West Windsor, supra, 167 N.J. at 600.]
Because the first two issues are closely related, we consider them together.

     A.     Whether the Trial Court Erred in Concluding that the Township Failed to Provide a Realistic Opportunity for the Development of Affordable Housing and in Considering Market Demand for Particular Housing Types in Making That Determination

        Our analysis of these issues entails a two-tiered inquiry, each subject to a separate and distinct standard of review. The determination whether market demand should be considered in assessing whether a municipality’s zoning ordinances are exclusionary is a question of law that we review de novo. Balsamides v. Protameen Chem., Inc., 160 N.J. 352, 372 (1999) (stating that “[m]atters of law are subject to a de novo review”). We give deference to the trial court’s factual findings, e.g., that West Windsor’s sewer requirements are cost generative, as such findings should not be disturbed “when supported by adequate, substantial and credible evidence.” Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
    In concluding that West Windsor had not satisfied its 688-unit affordable housing obligation, the trial court considered, among others, eight undeveloped sites that also had been included in West Windsor’s original compliance plan and incorporated into the 1985 judgment. See supra at ___ (slip op. at 32 n.11). The court’s calculation of the number of affordable units that those sites could generate differed sharply from the number found in the original plan. Specifically, the eight sites’ affordable housing development potential under both the original plan and as found by the trial court is as follows:

Site

Original Plan Development Potential

Trial Court Development Potential

1 & 5A

120 Units

100 Units

2 & 8

312 Units

74 Units

5

100 Units

0 Units

6

527 Units

169 Units

7

40 Units

3 Units

B

206 Units

64 Units

Total

1,305 Units See footnote 15

410 Units

The original compliance “plan remained in effect, essentially unchanged, [from 1985] until late summer 1994.” West Windsor, supra, 303 N.J. Super. at 531. Thus, if the trial court was correct in its findings, then a significant reduction in site development potential had occurred since the time of the original compliance plan.
    The Appellate Division summarily affirmed the trial court’s decision “substantially for the reasons expressed . . . in [its] comprehensive . . . opinion.” West Windsor, supra, 334 N.J. Super. at 111 (internal citation omitted). The focus of our review, therefore, is on the trial court’s analytical approach and factual findings. West Windsor does not take issue with the factors considered by the trial court, with the single exception of market demand. We begin, then, by considering that issue.
        1. Market Demand
    The trial court found that marketability and market demand were factors to consider when evaluating whether a municipality provided a realistic opportunity for the development of affordable housing. West Windsor, supra, 303 N.J. Super. at 546, 571-73. Further, the court concluded that West Windsor’s continued use of multi-family units, despite the strong demand for single-family units, demonstrated that West Windsor's inclusionary housing plan had not created that realistic opportunity and, therefore, violated the Mount Laurel mandate. Id. at 548 (“If defendant has over-zoned for densities and types of housing for which there is little or no market, it cannot realistically expect development to occur.”).
    West Windsor claims that the trial court’s consideration of market demand led to the erroneous conclusion that the Township’s fair share plan failed to reflect adequately the actual and anticipated demand for various types of affordable housing. Defendant believes that the court improperly focused on market demand for detached, single-family homes instead of giving deference to the type of housing unit -- multi-family housing -- that the Township chose in its plan. Defendant fears that the issue of compliance now will be subject to the highly volatile whims of the market, thereby preventing a municipality from planning residential housing with any degree of certainty.
    Of greatest concern to West Windsor is the trial court’s requirement that municipalities “provide flexibility and opportunities in the ordinances that would allow for market responsiveness.” Id. at 572. Defendant insists that that requirement will prevent sound planning and unduly favors developers because “municipalit[ies will] be obligated to zone for every conceivable housing type” to satisfy a developer's vision of market demand. West Windsor also contends that the trial court’s analysis of market demand does not follow COAH regulations and therefore violates the principle stated in Hills that courts should give deference to COAH. See Hills, supra, 103 N.J. at 63. Specifically, defendant argues that COAH does not require market analysis as part of the informational submission from municipalities seeking substantive certification and neither should the Court. COAH, defendant asserts, concentrates more on the realistic development potential of an affordable housing site rather than the actual development of and market demand for that site.
    In response, plaintiff claims that a market-based analysis is an essential factor in determining whether a municipality has created a realistic opportunity for inclusionary development. By means of a market analysis it is possible to determine whether different housing types are attractive to buyers and, consequently, whether zoning that permits only less attractive housing serves as a disincentive to development. Plaintiff contends that in West Windsor the demand for multi-family housing is, at best, minimal, and that by relying in large part on zoning for this housing type, West Windsor is effectively ensuring that it will not meet its Mount Laurel obligation.
    We have considered market factors in our prior opinions. The Mount Laurel requirement that a municipality provide a realistic opportunity for the development of affordable housing is grounded, in part, on a determination that the sites chosen for development are economically viable. Mount Laurel II, supra, 92 N.J. at 260-61 (stating that realistic opportunity means that municipalities must “make it realistically possible for lower income housing to be built [and] . . . cannot depend on the inclination of developers to help the poor”) (emphasis in original). In other words, there must be a “likelihood -- to the extent economic conditions allow -- that the lower income housing will actually be constructed.” Id. at 221-22.
From the beginning, the Court has recognized that market forces play a role in the viability of site development. In Mount Laurel I we criticized municipal overzoning for industrial uses. We explained that “[t]he amount of land removed from residential use by allocation to industrial and commercial purposes must be reasonably related to the present and future potential for such purposes.” Mount Laurel I, supra, 67 N.J.
at 187. Likewise, residential zoning ordinances passed by a municipality “must be reasonably related to the present and future potential” for those uses. Ibid. In essence, “every
. . . municipality must, by its land use regulations, presumptively make realistically possible an appropriate variety and choice of housing.” Id. at 174 (emphasis added).
Similarly, in Madison, supra, 72 N.J. at 510-14, we considered the impact of market forces on development in assessing a municipality’s compliance with Mount Laurel mandates. We acknowledged that economic conditions could be such that, without public subsidization or other external incentives, private builders would not be able to construct profitable housing for the State’s low and moderate income populations. Id. at 510. With this in mind, we observed:

To the extent that the builders of housing in a developing municipality like Madison cannot through publicly assisted means or appropriately legislated incentives . . . provide the municipality’s fair share of the regional need for lower income housing, it is incumbent on the governing body to adjust its zoning regulations so as to render possible and feasible the “least cost” housing, consistent with minimum standards of health and safety, . . . and in amounts sufficient to satisfy the deficit in the hypothesized fair share.

    Those same concerns also are evident in the FHA and COAH’s regulations. By way of example, N.J.S.A. 52:27D-311a instructs municipalities, when developing housing elements, to consider “[r]ezoning for densities necessary to assure the economic viability of any inclusionary developments.” Although COAH regulations do not directly deal with market demand, they rely on evaluations of the marketplace for decision-making. Indeed, various COAH regulations suggest that COAH views market demand to be an important factor in the determination whether a municipality has created a realistic opportunity for the construction of affordable housing. N.J.A.C. 5:93-3.5(a) states, in pertinent part:

Where land has been zoned for low and moderate income housing, the Council shall review sites for suitability and determine if the previously zoned sites present a realistic opportunity for low and moderate income housing before granting a reduction. In its review, the Council shall include but not be limited to a consideration of . . .
the likelihood of the current zoning to result in the creation of low and moderate income housing . . . .


N.J.A.C. 5:93-5.6(b) provides that COAH’s review of municipal inclusionary zoning shall include an inquiry into “the present ability of a developer to construct low and moderate income housing at a specific density.” COAH explains that N.J.A.C. 5:93-5.6 “recognizes that housing markets change and by permitting some zoning at higher densities land will be available to accommodate changes in housing demand.” 25 N.J.R. 5787 (Dec. 20, 1993). In a response to comments on proposed N.J.A.C. 5:93-5.6(b), COAH again discusses market demand:

[N.J.A.C. 5:93-5.6(b)] establishes criteria that should be considered by the municipality and will be considered by [COAH] in determining the appropriate zoning for a specific site. The factors to be considered include land use planning considerations and a consideration of the current market. After consideration of these factors, [COAH] may require that a substantial percentage of inclusionary sites be zoned to allow market units within an inclusionary development to be constructed as single-family detached units.

[ 26 N.J.R. 2304 (June 6, 1994), quoted in West Windsor, supra, 303 N.J. Super. at 547 (emphasis added by trial court).]

    Our case law, the FHA, and COAH all recognize that the realistic opportunity evaluation cannot be made in a theoretical vacuum. Zoning for affordable housing that cannot or will not be built by private developers does not satisfy a municipality’s Mount Laurel obligation. To state the obvious, developers are motivated by profit, and there is likely no greater area of concern for a developer than the marketability of its project. The colloquial phrase “if you build it, they will come” does not translate well to the building of homes. The realities of our market system must be a critical factor in the application of Mount Laurel mandates.
    We hold that the trial court properly considered market demand in its analysis. We agree with the court’s observation that when a municipality zones many of its inclusionary sites with “a particular type of housing [that], as a matter of fact, controls only a minute fraction of the market, . . . there can be little doubt the opportunity to construct affordable housing is more illusory than real.” West Windsor, supra, 303 N.J. Super. at 545.
Because West Windsor’s zoning ordinances relied almost entirely on multi-family housing “as the vehicle for development of inclusionary projects,” id. at 554, the trial court focused on the demand for that housing type. The court acknowledged that single-family homes were permitted on the inclusionary sites, but only if “located in a specialty zone, or . . . [in the form of] a novel product, e.g., zero lot-line homes.” Ibid. Those restrictions made significant development of multi-family homes unlikely. After carefully evaluating the demographic data, building permit statistics, zoning of vacant unapproved land, vacancy rates of existing units, and absorption rates of units coming onto the market, id. at 566, the court determined that West Windsor’s “over-reliance on multi-family housing as the method of producing inclusionary housing has had only limited success in the past and has questionable viability in the future.” Id. at 571-72. The court found that even though market demand might exist to support the construction of multi-family housing on an individual site, it would be “wholly unrealistic” to assume that at least nine such sites also would be developed. In sum, the limited demand for multi-family housing provided “little or no incentive” for the owners of inclusionary sites to commence development. Id. at 545-46.
    West Windsor has not adequately explained why it continues to emphasize multi-family housing units, for which market demand is so low, when the market for detached, single-family units is so high. The record informs us that there has been significant construction of detached, single-family units in West Windsor during the period from 1982 to 1992, suggesting that that type of dwelling is responsive to the housing market. We find persuasive the arguments presented by plaintiff and various amici that the effect of including substantial numbers of multi-family units in West Windsor’s plan is to prevent the development of affordable housing in the Township. That said, we acknowledge that housing markets are dynamic and subject to fluctuation. It makes sense, as various amici suggest, to prepare “zoning plan[s that] take[] [into account] a longer view of demand patterns.” Certainly, municipal planners should be able to anticipate some level of volatility, and take that into account in developing appropriate land use plans. We emphasize in this regard that the use of market demand is but a factor in the court’s evaluation and not an end unto itself.
    Nonetheless, zoning ordinances that rely on housing units for which there is little demand to fulfill Mount Laurel obligations do not provide a realistic opportunity for the development of affordable housing. In this case, there was substantial evidence to support the trial court’s holding that market demand for multi-family housing would not provide that opportunity.

        2.     Housing Yield

For similar reasons, we find unconvincing West Windsor’s argument that it was error for the trial court to disregard certain COAH regulations when projecting the affordable housing unit yield for each property. The Township claims that the court did not follow the approach outlined in N.J.A.C. 5:93-3.5(b), which provides:

For previously certified sites that remain undeveloped, a municipality may propose an alternative zoning density and set aside as the result of a developer agreement. The Council shall certify each form of zoning and calculate the higher yield in addressing the fair share obligation. If the alternative zoning is exercised and there are unmet units, the Council shall not require the municipality to zone additional sites unless there are compelling reasons. Unmet units shall be addressed in the Council's third fair share cycle.

West Windsor asserts that the trial court was required
to follow N.J.A.C. 5:93-3.5(b) when evaluating the eight undeveloped sites from the original compliance plan because those sites were zoned for both high density (mostly multi-family) and low density (mostly single-family) housing. Defendant argues that the court should have accepted the Special Master’s high-yield calculation that projected the development of 765 affordable units, seventy-seven more than West Windsor’s unmet obligation.
    By its very terms N.J.A.C. 5:93-3.5(b) is not applicable here, as that regulation applies only when a municipality and a developer of a previously certified site have mutually agreed to alter the permitted zoning density. More important, West Windsor’s interpretation would render meaningless various other COAH regulations that call for an extensive and detailed review of inclusionary sites when evaluating a municipal plan. See, e.g., N.J.A.C. 5:93-5.6(b) (delineating multiple areas of COAH review in evaluation of sites zoned for affordable housing). ^{See footnote 16}
The history of this case further highlights the problem with West Windsor’s position. The Toll Brothers site was part of the original compliance plan and was zoned to permit both high and low density housing. The plan was incorporated into the 1985 judgment that expired in 1991. Under West Windsor’s proffered interpretation of N.J.A.C. 5:93-3(b), when considering Toll Brothers’ challenge in 1993, the trial court would have had to adopt the high yield projection for that site despite a demonstrated lack of demand for multi-family housing apparent in 1993. Indeed, since 1985 there have been significant developments that affect yield for many of the sites in the original plan. For example, the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-1 to -30, was enacted on July 1, 1987, effective July 1, 1988, several years after West Windsor’s plan was incorporated into the 1985 judgment. To fail to evaluate a site’s potential to deliver affordable housing in light of current realities would be contrary to the dictates of this Court’s Mount Laurel case law.

        3.     Sewer Policies

In reaching its conclusion that West Windsor’s sewer construction and financing requirements were unduly cost-generative, and thus served as a disincentive to development, the trial court discussed the difficulties facing the six inclusionary site developers that were required to construct an oversized and expensive gravity-fed system. Toll Brothers presented credible testimony that it would incur front-end costs of over $1.8 million, including significant acquisition costs, that would effectively deter development of its site. The trial court rejected as “conjecture” West Windsor’s assertion that through “sequential development” the inclusionary sites could connect to an existing line at a reasonable cost, and dismissed as “not credible” testimony offered by defendant that the inclusionary sites could, if necessary, qualify for an exemption from certain sewer requirements. The court determined that West Windsor’s sewer policies presented a “significant impediment” to the potential development of affordable housing and we agree.
West Windsor argues that the substantial amount of housing constructed in the late 1990s belies a finding that its sewer policies have deterred development and asserts that both before and after the trial court decision, the West Windsor Planning Board approved affordable housing development without any alterations to its sewer policy. However, the factual predicate for those claims lies outside of the record and cannot provide a basis for a finding of error in the trial court decision. ^{See footnote 17}

         4.     Summary

In its assessment of West Windsor’s realistic development potential, the trial court conducted a searching and detailed site-specific inquiry that considered the effects of market demand, sewer policies, environmental constraints, and assemblage. The court examined various experts’ reports and conducted a bench trial that began on September 28, 1994, and ended on March 29, 1995. West Windsor, supra, 303 N.J. Super. at 530. When the proceedings were completed, the court concluded that West Windsor had not met its 688-unit obligation. That conclusion is supported by the record.
    
     B.     Whether The Trial Court Erred in Holding that Toll              Brothers is Entitled to a Builder’s Remedy

    The trial court found that Toll Brothers was entitled to a builder’s remedy, concluding that “[t]here is no question that plaintiff-developer Toll Brothers has succeeded in this Mount Laurel litigation, and has proposed to develop its land in such a way as to produce a setaside of at least fifteen percent affordable units.” Id. at 575. The specific details of the remedy were to be resolved after the compliance trial. Ibid.
    The Appellate Division affirmed substantially for the reasons expressed by the trial court. West Windsor, supra, 334 N.J. Super. at 111. The panel held that Toll Brothers met the three requirements for a builder’s remedy -- “(1) it succeed[ed] in Mount Laurel litigation, (2) it propose[d] a project with a substantial amount of affordable housing, and (3) [its] site is suitable, i.e., the municipality fail[ed] to meet its burden of proving that the site is environmentally constrained or [that] construction of the project would represent bad planning.” After reviewing the record, the appellate court also rejected West Windsor’s argument that Toll Brothers did not act in good faith and, therefore, was not entitled to a builder’s remedy. The court cited Toll Brothers’ continued dialogue with the Planning Board and its efforts to settle the case.
    West Windsor asserts that Toll Brothers failed to satisfy the requirements of Mount Laurel II and therefore is not entitled to a builder’s remedy. The Township claims that Toll Brothers (1) did not first seek approval for its development from the Township, thereby denying it the opportunity to hear the application; (2) should have been found unsuccessful at trial in challenging the Township’s zoning ordinances; and (3) proposed a development that was not consonant with sound planning and did not provide a substantial number of affordable housing units.
    Toll Brothers points to its success at trial in proving West Windsor’s non-compliance with the Township’s affordable housing obligations. Plaintiff cites as evidence of that success the numerous zoning amendments adopted by West Windsor during and after the commencement of this litigation. According to plaintiff, up to seventy percent of the fair share plan ultimately approved by the court was due to its lawsuit. In addition, plaintiff points to its success at trial in proving its claims regarding market demand, West Windsor’s sewer policy, environmental limitations, and lot assemblage.
The courts below properly held that Toll Brothers satisfied the Mount Laurel II requirements for the grant of a builder’s remedy. West Windsor has not established that Toll Brothers acted in bad faith. Both prior to commencing litigation and throughout the summer and fall of 1993, Toll Brothers communicated with the Planning Board, cautioning that zoning ordinances would have to be amended to implement its project and expressing its willingness to settle. Under the zoning in place at the time, Toll Brothers’ plan necessarily would require variances. As the Appellate Division observed, the Toll Brothers site was not a good candidate for variances because of the “size of the property, its importance in the Township’s compliance plan and the number of variances needed to build conventional single-family dwellings . . . .” In those circumstances, it cannot be said that Toll Brothers acted in bad faith by not applying to the Planning Board.
    We find that Toll Brothers succeeded at trial. West Windsor’s claim that it was already compliant and had instituted amendments to its fair share plan at the time Toll Brothers initiated its lawsuit ignores the critical point -- it was Toll Brothers that served as the catalyst for change and that successfully demonstrated West Windsor’s non-compliance with its constitutional obligation. We also find that the Appellate Division properly rejected West Windsor’s assertions that the Toll Brothers development does not accord with sound land use planning and does not provide a substantial number of affordable dwelling units. Indeed, Toll Brothers’ development does not differ from development previously permitted except that a portion of the site will contain “marketable” detached single-family houses rather than “unmarketable” zero lot-line houses. In any case, the Toll Brothers development will produce affordable housing that, with a rental bonus, will satisfy 290 units of West Windsor’s 688-unit obligation. Although as a general matter a twenty percent set-aside has been considered adequate, the trial court reasonably determined in this case that the fifteen percent set-aside was sufficient. ^{See footnote 18}
West Windsor has not demonstrated that the granting of a builder’s remedy was erroneous. That conclusion notwithstanding, we note and address arguments raised by certain amici that urge the Court either to curtail or to eliminate the builder’s remedy. Those amici claim that the builder’s remedy contributes to suburban sprawl and that developers use the remedy as a weapon against municipalities.
From the outset, the Court has been cognizant of the controversy engendered by the builder’s remedy. Mount Laurel II, supra, 92 N.J. at 279 (stating that “[b]uilder’s remedies have been one of many controversial aspects of the Mount Laurel doctrine”). Anticipating that controversy, we endorsed the builder’s remedy after much deliberation and with a great deal of concern and caution. In Mount Laurel I, we explained the origin and scope of municipalities’ constitutional obligation, but did not specify how that obligation would be enforced. Instead, we decided that, at least initially, it was “not appropriate . . . to deal with the matter of the further extent of judicial power in the field or to exercise any such power.” Mount Laurel I, supra, 67 N.J. at 192. That approach was, in part, rooted in our understanding that developers (both private and public) and governmental agencies construct housing, not courts or municipalities. Ibid. We held that a municipality could meet its affordable housing obligation by providing conditions conducive to development through its zoning ordinances. Ibid. It was our hope and expectation that municipalities would work to achieve compliance, and that the legislative and executive branches would take an active role in implementation of the Mount Laurel doctrine.
    In the two-year period that followed, however, the Legislature did not act, nor was there widespread municipal compliance. We found it necessary to authorize a mechanism to compensate a builder who successfully demonstrated that a municipality was not meeting its affordable housing obligation. Madison, supra, 72 N.J. at 548-51. On that successful demonstration, the municipality would be required to revise its plan so as to provide a realistic opportunity for the development of low and moderate income housing. The purpose
of the remedy, then, was to accomplish what a municipality
might otherwise have been unable or unwilling to do itself;
the incentive for instituting such litigation would be the opportunity to develop an inclusionary zoning site at a reasonable profit. Without that opportunity, builders instituting Mount Laurel challenges would achieve but a
“pyrrhic victory.” Id. at 550.
    Later, in Mount Laurel II, we determined that
“[b]uilder’s remedies [would] be afforded to plaintiffs in
Mount Laurel litigation where appropriate, on a case-by-case basis.” 92 N.J. at 218. We held that

where a developer succeeds in Mount Laurel litigation and proposes a project providing a substantial amount of lower income housing, a builder’s remedy should be granted unless the municipality establishes that because of environmental or other substantial planning concerns, the
plaintiff’s proposed project is clearly contrary to sound land use planning.

        [Id. at 279-80 (footnote omitted).]

Concerned about “sound land use planning,” we stressed that when formulating a specific builder’s remedy, the trial courts should “make as much use as they can of the planning board’s expertise and experience so that the proposed project is suitable for the municipality.” Id. at 280. We further advised trial courts to take care to “guard the public interest” by ensuring that plaintiff-developers do not “abuse the Mount Laurel doctrine.” Id. at 281.
    When enacting the FHA, the Legislature provided “various alternatives to the use of the builder’s remedy as a method of achieving fair share housing,” including the COAH mediation and review process, which was “the State’s preference for the resolution of existing and future disputes involving exclusionary zoning . . . .” N.J.S.A. 52:27D-303. In Hills, supra, 103 N.J. at 52, we expressed our support for COAH-resolution of Mount Laurel disputes, anticipating that the COAH process might more effectively foster the construction of affordable housing. As previously noted, supra at ___ (slip op. at 62), we assumed that “most municipalities that have a potentially significant Mount Laurel obligation will file their petition for substantive certification . . . .” Hills, supra, 103 N.J. at 36. Today we know that there has not been universal municipal participation in the COAH process. As of June 30, 2001, 271 of 521 municipalities, or roughly fifty-two percent, have filed with COAH. ^{See footnote 19} That statistic and this case demonstrate a continued need for the builder’s remedy.
    The dissent has pointed out that during this period a substantial amount of commercial and residential development has occurred throughout New Jersey, only a fraction of which has been affordable housing. Post at ___ (slip op. at 3-4). Indeed, the perception that builder’s remedies are routinely granted is simply not correct. A survey of builder’s remedy decisions provided by certain amici reveals that in thirteen Superior Court cases, eight builder’s remedies were granted and five were rejected. At the same time, out of nine builder’s remedy cases before COAH, only one was approved. ^{See footnote 20}
Whether through COAH or as the result of litigation, since 1980 more than 28,855 affordable housing units have been constructed. See COAH Report at 4. That amount of housing is not likely to have a large impact on the municipal landscape. In contrast, as the dissent observes, post at ___ (slip op. at 3), there has been significant development state-wide of market rate residential housing (more than 450,000 units since 1983). David N. Kinsey, Reaffirm Mount Laurel, N.J.L.J., Aug. 13, 2001, at 619. In West Windsor alone over 3,000 expensive single-family homes have been constructed on large lots during the 1980s and early 1990s when “only 139 low and moderate income units” were built. West Windsor, supra, 303 N.J. Super. at 531.
In this vein, it is important to point out what we are not deciding today. As mentioned earlier, supra at ___ (slip op. at 47-48), the amici participants in this appeal have raised a myriad of issues that were not raised below by the parties. Although our dissenting colleague considers “it appropriate to address collateral concerns about the builders’ remedy,” post at ___ (slip op. at 27), we believe the record to be inadequate for review and disposition of those issues. By way of example, the dissent would have us remand this matter to the trial court to consider requiring Toll Brothers to include “housing units affordable to households with incomes below forty percent of median income.” Post at ___ (slip op. at 27). Aside from any concerns we might have about delaying the construction of low and moderate income housing even further, ^{See footnote 21} we do not have enough information in this record to justify a remand now. We do note, however, that in a prior challenge to COAH’s affordability standards, which have been applied in this case, the Appellate Division held that the plaintiffs failed to “point[] to any data which indicate[d] that COAH’s . . . standards fail[ed] to properly implement the goals of Mount Laurel within the economic limitations imposed by the operation of the private real estate market.” In re Township of Warren, 247 N.J. Super. 146, 182-83 (App. Div. 1991), cert. denied, 127 N.J. 557 (1992), rev’d on other grounds, 132 N.J. 1 (1993). To the extent that data has been developed on this issue in the last ten years, those data would be evaluated best in a separate challenge on a fully developed record.
    Nonetheless, we are able on the information presented and available to make certain observations. The State Development and Redevelopment Plan (SDRP or State Plan) “acknowledges ‘a moral and legal obligation to provide all [New Jersey] citizens with the opportunity to meet their housing needs at prices they can afford,’ and recognizes that a comprehensive housing policy emphasizing the need to lower housing costs and increase opportunities for all income and ethnic groups is critical to the state’s economy.” New Jersey State Planning Commission, The New Jersey State Development and Redevelopment Plan 85 (2001). We are aware of a renewed emphasis on statewide planning initiated by the Governor under a newly constituted State Capital Planning Commission, and of the importance of that effort in guiding municipal planning for low and moderate income housing. In this case, the Toll Brothers site lies within the Route One-West Windsor Regional Center identified in the SDRP. Id. at 301. The SDRP states that “Centers are the State Plan’s preferred vehicle for accommodating growth . . . [and that] Center-based development patterns are superior to sprawl.” Id. at 230. From the perspective of the SDRP, then, the builders’ remedy granted by the trial court to Toll Brothers applies to property appropriately zoned to provide for regional housing needs under the State Plan. We anticipate that future planning will provide for low and moderate income housing, taking into account environmental concerns and other sensitive and important issues.
Finally, the dissent has mentioned the Court’s remand
to the Civil Practice Committee in respect of a minority report entitled Fee Shifting in Public Interest Litigation. Post
at ___ (slip op. at 22). Although we fully appreciate the goal of reducing reliance on builders’ remedy litigation to advance the development of affordable housing, we express no views on a proposal that will be reviewed and considered through the administrative process.

TOLL BROTHERS, INC., a Delaware Corporation,

Plaintiff-Respondent,

v.

TOWNSHIP OF WEST WINDSOR, a Municipal Corporation of the State of New Jersey located in Mercer County, MAYOR AND COUNCIL OF THE TOWNSHIP OF WEST WINDSOR, and THE PLANNING BOARD OF THE TOWNSHIP OF WEST WINDSOR,

Defendants-Appellants.

STEIN, J., concurring in part and dissenting in part.

    I agree with the Court’s disposition of the three certified questions, including its determination that Toll
Brothers was entitled to a builder’s remedy. In my view, however, the specific remedy granted by the lower courts to Toll Brothers was far too generous. It did not sufficiently address the housing needs of low income households, particularly those earning less than forty percent of median income. The remedy granted Toll Brothers also was too generous in requiring that only fifteen percent of the housing units to be built by Toll Brothers be affordable by low and moderate income households. To the extent that those deficiencies in the builder’s remedy granted to Toll Brothers are attributable to regulations promulgated by the Council on Affordable Housing (COAH) on which the trial court relied, I would conclude that those regulations, irrespective of their validity, are not applicable to builder’s remedy litigation.
    This is the first time since our decision in Hills Development Co. v. Township of Bernards, 103 N.J. 1 (1986), that the Court is presented with a record that implicates the use of the builder’s remedy to vindicate the constitutional principles underlying our decision in Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II). Accordingly, I deem it appropriate to address collateral concerns about the builder’s remedy advanced by some of the parties participating as amicus curiae in this litigation. Those concerns include COAH’s methodology for calculating the regional fair share of affordable housing that in my view misallocates the burden of constructing that housing, with the result that builder’s remedy lawsuits too often are filed in communities with slow rates of growth rather than in communities that have planned for and are experiencing rapid development. Another concern is over-reliance on builder’s remedy litigation, one remedy for which would be a limited authorization of fee shifting in favor of successful non-profit plaintiffs that file and litigate inclusionary housing suits against non-compliant municipalities. ^{See footnote 22}
    Before addressing issues that focus on improving the effectiveness of or diminishing reliance on the builder’s remedy, an important misconception should be confronted. Some critics of the Mount Laurel doctrine and the builder’s remedy claim that they are the primary cause of “sprawl,” overdevelopment, and the loss of open space throughout the state. Reliable statistics contradict that criticism. Since 1983, when Mount Laurel II was decided, approximately 480,000 residential dwelling units have been constructed of which about 26,000 units, or 5.4 percent, constituted units affordable to low and moderate income households. In addition, during the years 1995 to 2000, approximately sixty million square feet of office and retail space has been built throughout the State. David N. Kinsey, Reaffirm Mount Laurel, 165 N.J.L.J. 619 (Aug. 13, 2001). Those statistics suggest that if overdevelopment has occurred, the source of that overdevelopment is market-priced housing and commercial construction, not affordable housing.

                        I
                        A
    The amici briefs of the Rutgers Environmental Law Clinic and the Fair Share Housing Center argue forcefully that one of the most serious flaws in the implementation of the Mount Laurel doctrine, either through the builder’s remedy or through COAH’s substantive certification process, is that the “affordable housing” units constructed are not affordable by the very poor, particularly those households below forty percent of median income. ^{See footnote 23} Amici’s argument is persuasive and disturbing.
    COAH’s affordability regulations do not require that any housing constructed in inclusionary developments be affordable by households earning less than forty percent of median income. N.J.A.C. 5:92-14.2, entitled “Range of affordability for purchased housing,” requires municipalities seeking substantive certification to ensure that the average price of low and moderate income housing units within an inclusionary development be affordable by households earning 57.5 percent of median income. That regulation also requires the following distribution of prices for every twenty low and moderate income units:
Proposed Pricing Stratification

        Low

1 at 40 through 42.5 percent
3 at 42.6 through 47.5 percent
6 at 47.6 through 50 percent

Moderate

1 at 50.1 through 57.5 percent
1 at 57.6 through 64.5 percent
1 at 64.6 through 68.5 percent
1 at 68.6 through 72.5 percent
2 at 72.6 through 77.5 percent
4 at 77.6 through 80 percent

The summary of Public Comments and Agency Responses relating to the adoption of that affordability regulation reveals that COAH believed that it was not “realistic” to require low income housing to be affordable to households earning less than forty percent of median income:
COMMENT: N.J.A.C. 5:92-14.2 pertaining to range of affordability for purchased housing, does not provide sufficient opportunities for low income units.

RESPONSE: The proposed rule is intended to provide affordable housing to the widest possible spectrum of low and moderate income households. However, the rule recognizes the problems low income households have in qualifying for mortgages, raising a downpayment and paying for closing costs. Due to these difficulties, the Council did not think it was realistic to require purchased housing to be priced so as to be affordable to those households earning less than 40 percent of the median income. However, it should be noted that the Council has recognized the need of very low income households by requiring a rental housing component of municipalities and by allowing municipalities to accommodate their housing obligations through alternative living arrangements that are a more realistic economic alternative to very low income households.

            [ 18 N.J.R. 2443 (emphasis added).]
    COAH’s affordability regulation will determine the prices of the affordable housing units to be built by Toll Brothers pursuant to the builder’s remedy awarded to it. The Law Division’s July 30, 1997, Order Establishing Builder’s Remedy Standards mandated that “West Windsor’s Ordinances relating to controls on Affordable Units shall be amended to conform to the standards set forth in the [COAH regulations].”
COAH’s affordability regulation, and the Law Division’s assumption that that regulation was binding on it for purposes of establishing the affordability of the low and moderate income housing units to be built by Toll brothers, appear to be inconsistent with a fundamental premise of the Mount Laurel doctrine. That premise is that a portion of the housing built pursuant to Mount Laurel be affordable by low income households. This Court emphasized that principle explicitly in Mount Laurel II.
    In determining fair share, the court should decide the proportion between low and moderate income housing unless there are substantial reasons not to do so. The provisions and devices needed to produce moderate income housing may fall short of those needed for lower. Since there are two fairly distinct lower income housing needs, an effort must be made to meet both.

The proportion between the two is, inevitably, a matter for expert testimony. It will depend, as does the fair share itself, on a complex mix of factors. We note, without comment, the trial court's use in Carteret, for this purpose, of the actual proportion between the low and moderate income population of the county. The point here is that it is an issue that should be addressed in passing on the adequacy of land use regulations (and revisions thereof) as well as builder's remedies.

[92 N.J. at 256-57 (citation omitted) (emphasis added).]

    That Mount Laurel II contemplated that affordable housing would include units affordable by low income households is incontestable. Moreover, the Fair Housing Act does not distinguish between the needs of low and moderate income households, nor does it authorize exclusion of households below forty percent of median income. See N.J.S.A. 52:27D-304c to 304d (defining “low income housing” as housing affordable by households with gross income equal to 50% or less of median income of same size household within region, and defining “moderate income housing” as housing affordable by households with gross income between 50% and 80% of median income of same size households within region); N.J.S.A. 52:27D-310 (requiring municipality’s housing element to address municipality’s fair share of low and moderate income housing); N.J.S.A. 52:27D-311 (addressing techniques for providing low and moderate income housing); N.J.S.A. 52:27D-314 (conditioning substantive certification by COAH on finding that municipality’s fair share plan is consistent with achievement of low and moderate income housing needs of region.
    In setting forth the analytical basis for the constitutional obligation imposed by Mount Laurel II, Chief Justice Wilentz emphasized that the urban poor were intended to be among the primary beneficiaries of the Mount Laurel holding:
The basis for the constitutional obligation is simple: the State controls the use of land, all of the land. In exercising that control it cannot favor rich over poor. It cannot legislatively set aside dilapidated housing in urban ghettos for the poor and decent housing elsewhere for everyone else. The government that controls this land represents everyone. While the State may not have the ability to eliminate poverty, it cannot use that condition as the basis for imposing further disadvantages. And the same applies to the municipality, to which this control over land has been constitutionally delegated.

The clarity of the constitutional obligation is seen most simply by imagining what this state could be like were this claim never to be recognized and enforced: poor people forever zoned out of substantial areas of the state, not because housing could not be built for them but because they are not wanted; poor people forced to live in urban slums forever not because suburbia, developing rural areas, fully developed residential sections, seashore resorts, and other attractive locations could not accommodate them, but simply because they are not wanted. It is a vision not only at variance with the requirement that the zoning power be used for the general welfare but with all concepts of fundamental fairness and decency that underpin many constitutional obligations.

[92 N.J. at 209-10.]
    In the context of the purposes underlying the Mount Laurel doctrine, as well as the provisions of the Fair Housing Act cited above, the validity of COAH’s regulation that excludes from the range of affordability of low and moderate housing units those households earning less than forty percent of median income is highly questionable. Although we have acknowledged that “[t]his principle of judicial deference to agency action is particularly well-suited to our review of administrative regulations adopted by COAH to implement the Fair Housing Act,” we also emphasized that that deference was not intended to “dilute COAH’s duty to adopt regulatory methods that are consistent with the statutory goals.” In re Petition for Substantive Certification Filed by the Township of Warren, 132 N.J. 1, 27-28 (1993).
    However, the validity of COAH’s “range of affordability” regulation is not directly or indirectly implicated by this appeal. That regulation applies only to low and moderate income housing units proposed to be constructed by a municipality petitioning COAH for substantive certification pursuant to the Fair Housing Act. However, the Law Division undoubtedly assumed that, in implementing the builder’s remedy for Toll Brothers, it should be guided by COAH’s range of affordability regulation. In my view that assumption, although understandable, is unwarranted.
    The source of the Law Division’s assumption that it should follow COAH’s regulations in implementing the Toll Brothers builder’s remedy is this Court’s opinion in Hills, supra, 103 N.J. 1. In the course of that opinion, we emphasized the desirability of harmonizing judicial decisions involving the Mount Laurel doctrine with COAH’s regulatory determinations:
This statutory scheme addresses the main needs delineated in our prior decisions on this matter, namely, the consistency on a statewide basis of the determination of regional need, fair share, and the adequacy of the municipal measures. Furthermore, the decisions and actions by the Council will follow the contours of the SDRP (when completed), explicitly designed for this purpose, among others. Revisions, adjustments, fine tuningall of the techniques available to an administrative agencycan be implemented on a statewide basis as experience teaches the Council what works and what does not. The risk that discordant development might result if Mount Laurel cases continue to be decided by the courts is minimized by the considerations noted above, which lead to the conclusion that most municipalities will use the Council's procedures. Furthermore, the judiciary, assuming the statutory plan functions reasonably effectively, will be responsive to the actions of the Council and conform its decisions in this field to the Council's various determinations.

            [Id. at 37.]

    We also stated:
    This Court will do its proper share in this cooperative effort. While the Legislature has left a continuing role under the Act for the judiciary in Mount Laurel matters, any such proceedings before a court should conform wherever possible to the decisions, criteria, and guidelines of the Council. We do not believe the Legislature wanted lower income housing opportunities to develop in two different directions at the same time, contrary to sound comprehensive planning. In that connection, courts will, pursuant to section 16b, transfer to the Council any Mount Laurel action hereafter commenced except where the Act clearly calls for retention (such as the petition for a declaratory judgment referred to in Section 13).

[Id. at 63.]
    Notwithstanding the clear preference we expressed in Hills, supra, that judicially imposed remedies be harmonized with COAH’s regulatory determinations, that preference is not unlimited nor should it be extended beyond its logical limits. The principle underlying the use of the builder’s remedy is that the profit realized by the successful builder in constructing market-price housing will permit the builder to subsidize the affordable housing units to be constructed. We made that point expressly in Mount Laurel II:
The balance of the project will presumably include middle and upper income housing. Economically integrated housing may be better for all concerned in various ways. Furthermore, the middle and upper income units may be necessary to render the project profitable. If builder's remedies cannot be profitable, the incentive for builders to enforce Mount Laurel is lost.

[92 N.J. at 279 n.37
(emphasis added).]

    Unlike the process of substantive certification in which a municipality submits a housing element for COAH’s review, the grant of a builder’s remedy by a trial court is a more dynamic and more flexible proceeding. Variables include the total number of market-priced units to be permitted, the percentage of affordable housing units to be required, the price ranges of the affordable housing units, the timetable for construction of both affordable and market-price units, and numerous other factors. Trial courts implementing builder’s remedies have at their disposal various mechanisms for encouraging the successful builder-litigant to provide affordable housing for households whose median incomes fall at the lower end of, as well as below, COAH’s range of affordability. In view of this Court’s specific requirement in Mount Laurel II that affordable housing units include units affordable to low income families, including the urban poor, it would be a bitter irony if courts implementing the builder’s remedy – a judicially created enforcement mechanism – should fail to assure that a significant number of the affordable housing units are within the reach of low-income households, including households whose incomes are below forty percent of median income.
We are informed by amici that regulations adopted by the Department of Community Affairs under the Balanced Housing Program, N.J.A.C. 5:43-1.4(c)(1), and by the Housing and Mortgage Finance Agency that administers the Federal Low Income Housing Tax Credit Qualified Allocation Plan, N.J.A.C. 5:80-33.13, do not permit the grant of subsidies under those programs to developers of inclusionary developments that have benefited from zoning created by a density bonus. As inexplicable as those regulatory exclusions may be, they do not exhaust the available funding mechanisms for low income housing. The use of development fees pursuant to municipal ordinances approved by COAH conceivably could provide available funding for such housing. Additional funding sources are cited in the Fair Share Housing Center amicus brief. The parties participating in builder’s remedy litigation may be familiar with other funding sources. The point is that the COAH regulation on range of affordability, which I consider to be of doubtful validity even as applied to the substantive certification process, should not be binding on trial courts that implement builder’s remedies. Such a limitation on the trial court’s discretion is utterly incompatible with the principles underlying Mount Laurel II.
                        B
    A similar analysis is applicable to the trial court’s determination that of the 1,165 units to be constructed by Toll Brothers, approximately fifteen percent or 175 units must be affordable to low and moderate income households. The July 30, 1997, order of the Law Division expressly provides as follows: “Toll shall provide a set-aside of fifteen percent (15%) of the total units as rental, family Affordable Units.”
    That requirement of a fifteen percent set-aside is consistent with the requirements of COAH’s regulations pertaining to inclusionary developments, particularly N.J.A.C. 5:92-14.4 entitled “Rental Housing.” That regulation provides in part: “Within zones designated for rental inclusionary developments, the Council shall presumptively require a 15 percent maximum set-aside and a minimum gross density of 7.8 units per acre.” N.J.A.C. 5:92-14.4(c). Other COAH regulations also favor a fifteen percent set-aside. N.J.A.C. 5:93-5.6, entitled “Zoning for inclusionary development,” provides that COAH generally will favor the construction of single-family detached units as part of an inclusionary site at a “gross density of four units per acre with a 15 percent set-aside.”
The COAH preference for a fifteen percent set aside for affordable housing contrasts sharply with this Court’s express preference in Mount Laurel II for a minimum set-aside of twenty percent of affordable housing. In Mount Laurel II we held that a developer that succeeds in Mount Laurel litigation and “proposes a project providing a substantial amount of lower income housing,” ordinarily should be entitled to a builder’s remedy. Mount Laurel II, supra, 92 N.J. at 279. In a footnote the Court elaborated by explaining what constituted a project providing a substantial amount of lower income housing:
What is "substantial" in a particular case will be for the trial court to decide. The court should consider such factors as the size of the plaintiff's proposed project, the percentage of the project to be devoted to lower income housing (20 percent appears to us to be a reasonable minimum), what proportion of the defendant municipality's fair share allocation would be provided by the project, and the extent to which the remaining housing in the project can be categorized as "least cost."

[92 N.J. at 279 n.37
(emphasis added).]

    As was the case with COAH’s “range of affordability” regulation, COAH’s fifteen percent set aside preference should not, in my view, be binding on trial courts supervising builder’s remedy litigation. Because the relief to be afforded in such litigation is intended to provide the maximum number of affordable housing units that are feasible, consistent with the market-rate housing units to be constructed by the successful builder-litigant, a court should not be restricted by the COAH preference for fifteen percent set-asides. Putting to one side the validity of the COAH regulations, those regulations are intended expressly to apply to municipal petitions for substantive certification. That process, as noted above, is drastically different from the more flexible process implicated in builder’s remedy litigation. The same considerations that suggest the irrelevance of COAH’s range of affordability regulation to builder’s remedy lawsuits apply with equal force to COAH’s express preference for only a fifteen percent set-aside for affordable housing units in inclusionary developments.
                        C
    Another significant issue raised by amicus Rutgers Environmental Law Clinic concerns the methodology used by COAH to calculate regional and municipal fair share of low and moderate income housing. The existing COAH formula is substantially patterned on the trial court’s opinion in AMG Realty Co. v. Warren Township, 207 N.J. Super. 388 (Law Div. 1984). We summarized that methodology in Twp. of Warren, supra, 132 N.J. at 17-19. In its simplest terms, COAH considers four factors in allocating prospective regional need: (a) annual employment change within a municipality as a percentage of regional employment change; (b) employment in a municipality as a percentage of regional employment; (c) municipal land and growth areas as a percentage of growth areas in the region; and (d) municipal aggregate per capita income as a percentage of regional per capita income. In short, fifty percent of the weight for allocating a municipality’s prospective regional need is based on that municipality’s proportionate share of the region’s employment and the remaining fifty percent is based on the municipality’s physical and financial capacity to accommodate affordable housing. Advocates of affordable housing argue that that formula is unnecessarily complex and, more importantly, fails to take into account the growth anticipated to occur in the subject municipality in the ensuing years. Advocates of a “growth share” approach to the calculation of municipal and regional need for affordable housing note that the Fair Housing Act, N.J.S.A. 52:27D-310, imposes an obligation on municipalities seeking substantive certification to include detailed information that would inform COAH about the projected growth and development in the municipality. That statutory provision requires the housing element to include, for example, the following: “A projection of the municipality’s housing stock, including the probable future construction of low and moderate income housing, for the next ten years, taking into account, but not necessarily limited to, construction permits issued, approvals of applications for development and probable residential development of lands.” N.J.S.A. 52:27D-310(b).
    COAH has not yet promulgated its regional and municipal fair share requirements applicable to the “third round,” and the Court is informed that a proposal incorporating the growth share concept has been submitted to COAH for its consideration. In its simplest terms, that proposal contemplates that a municipality’s growth share would constitute its proportionate share of actual residential and nonresidential development in the municipality over the next six years. The residential growth share would constitute one-fifth of the total of new residential construction, analogous to the twenty percent set-aside referred to in Mount Laurel II. The nonresidential growth share would be calculated by converting actual nonresidential development into affordable units based on a formula that equates one affordable housing unit with a specific number of square feet of nonresidential construction. See John M. Payne, Remedies for Affordable Housing: From Fair Share to Growth Share, Land Use Law and Zoning Digest (Jun. 1997 at 3-9).
    The obvious virtue of a fair share calculation based on actual growth is that the municipalities best able to accommodate additional affordable housing units would bear the greatest burden of constructing those units, whereas municipalities not contemplating significant growth would bear a reduced burden. The reallocation of municipal fair share that could result from a change in COAH’s methodology appropriately could redirect significant portions of the responsibility for affordable housing to those municipalities in the state experiencing the greatest increase in residential and commercial development.
                        D
    Amicus Rutgers Environmental Law Clinic also asserts that the Court should supplement the Mount Laurel doctrine by authorizing an award of counsel fees to nonprofit plaintiffs that institute and prevail in exclusionary housing litigation. Amicus observes that although in the early stages of Mount Laurel litigation numerous nonprofit entities filed suits and participated in exclusionary housing litigation, the trend in recent years largely has been in the direction of litigation instituted by builders seeking a builder’s remedy. Amicus notes that the disadvantage of builder’s remedy litigation is that affordable housing units resulting from such litigation constitute no more than twenty percent, and more likely fifteen percent, of the total number of units permitted to be constructed by the court. In comparison, in suits instituted by nonprofit plaintiffs all of the housing units constructed would be affordable to low and moderate income households, thereby eliminating the need for the construction of market price units to subsidize the affordable housing units.
    Coincidentally, our Court recently considered at its June 11, 2002, administrative conference the report of the Supreme Court Civil Practice Committee that included a proposal entitled “Fee Shifting in Public Litigation.” The Court was informed that the majority of the Civil Practice Committee did not favor a fee shifting proposal as a matter of policy. A minority report submitted by members of the subcommittee on Fee Shifting in Public Interest Litigation disagreed with the majority’s conclusion. That report noted that plaintiffs who prevail in advancing rights asserted under the United States Constitution often can recover counsel fees, in both state and federal court, pursuant to 42 U.S.C. §1988. The minority report also noted that numerous statutes and court rules authorize fee shifting and that “the omission of state constitutional claims from these fee provisions is incongruous.” The proposed fee shifting rule advocated by the minority report would authorize a court, in its discretion, to award reasonable counsel fees and reasonable litigation expenses to a claimant who successfully has asserted a right under the New Jersey Constitution. That counsel fee award, however, would be limited to a reasonable hourly rate not to exceed $150 and compensation for paralegals and support staff not to exceed $50. No enhancement of a fee award would be permitted on the basis of the novelty or complexity of the claim. See 2002 Report of the Supreme Court Civil Practice Committee, 167 N.J.L.J. 689 app. D (Feb. 25, 2002).
At its June 11, 2002 conference the Court administratively decided not to accept the majority report of the Civil Practice Committee and to remand the matter to the full committee with instructions to reconsider, refine, and resubmit the proposed fee shifting rule recommended by the minority report to the Court for its reconsideration. The Civil Practice Committee also was instructed to hold such hearings and to permit the participation of such interested parties as may be appropriate.
Although the ultimate result of the Court’s June 11, 2002, administrative determination remains unresolved, in my view the Court’s preliminary action reflects an appreciation of the value that a fee shifting rule could add to litigation designed to enforce rights guaranteed by the State Constitution. Mount Laurel litigation is a prominent example of the kind of litigation that would benefit from a fee shifting proposal. Mount Laurel II never intended that the builder’s remedy would be the only means of vindicating the constitutional mandate for the construction of affordable housing. As this Court made clear in Hills, supra, the builder’s remedy was developed not for the benefit of builders but to advance the constitutional interest in affordable housing. “We concluded that if it were possible for builders to profit from lower income housing, they would pursue it, and further concluded that such pursuit was likely to increase compliance with Mount Laurel.” 103 N.J. at 54. Moreover, in response to the enactment of the Fair Housing Act that we sustained in Hills, the Court expressed its expectation that successful builder’s remedy litigation in the future rarely would occur: “If the Council conscientiously performs its duties, including determining regional need and evaluating whether the proposed adjustments and ordinances provide the requisite fair share opportunity, a successful Mount Laurel lawsuit should be a rarity.” 103 N.J. at 35.
In my view, the Court’s ultimate approval of a rule permitting fee shifting for the benefit of plaintiffs who successfully institute and conclude litigation asserting rights under the State Constitution, and especially rights under the Mount Laurel doctrine, would be a highly constructive initiative that would diminish future reliance on builder’s remedy litigation and encourage the participation of nonprofit plaintiffs in litigation designed to vindicate the constitutional principles underlying Mount Laurel II.

                    II

The Mount Laurel doctrine that recognized a constitutional predicate for affordable housing, and the builder’s remedy established as a mechanism to vindicate that constitutional right, are principles that first were recognized by this Court. In that most basic sense, their implementation is our ultimate responsibility.
Not for any lack of will or commitment on our part, the reality is that no appeal presenting a certifiable or constitutional question concerning the builder’s remedy has been presented to this Court in over a decade. Although anecdotal reports about problems in the application of the builder’s remedy have been widespread, this appeal affords the Court its first opportunity in over ten years to initiate a course correction. No one can predict when the next such occasion will arise. In our only major Mount Laurel appeal during the nineties, the Court unanimously invalidated a COAH regulation permitting a municipality to establish a residential preference for fifty percent of that community’s regional fair share of affordable housing, concluding that the regulation was inconsistent with both the Fair Housing Act and the regional focus of the Mount Laurel doctrine. Township of Warren, supra, 132 N.J. at 28-36.
Although not among the issues certified, the fundamental flaw that this record reveals concerning the manner in which trial courts are implementing the builder’s remedy requires our attention. Contrary to Mount Laurel II, and unauthorized by the Fair Housing Act, a COAH regulation on range of affordability that excludes from affordable housing households below forty percent of median income is being relied on by trial courts in builder’s remedy litigation on the mistaken assumption that application of the regulation is mandatory. Similarly, trial courts are applying COAH’s fifteen percent set-aside preference in the belief that it is binding, rather than observing this Court’s expectation that at least a twenty percent affordable housing set-side would be an appropriate condition of a builder’s remedy. Mount Laurel II, supra, 92 N.J. at 279 n.37.
The Court should address those critical questions in this appeal. The understandable assumption by trial courts is that our opinion in Hills, supra, advocating harmonization of judicial decrees and COAH regulatory determinations, 103 N.J. at 37, 63, requires application of COAH’s regulations to builder’s remedy suits. In my view, the Hills Court never would have contemplated or intended that the Mount Laurel doctrine or the builder’s remedy could be undermined by a COAH regulation that excluded our poorest families from occupying affordable housing units the construction of which the Mount Laurel II Court anticipated would be for their primary benefit.

                 III

For the reasons stated, I would remand this matter to the Law Division to revisit the builder’s remedy awarded to Toll Brothers. Specifically, the court should reconsider its determination that West Windsor’s affordable housing ordinance must mirror the COAH range of affordability regulation. In my view, the court on remand should be authorized to redetermine the scope of the builder’s remedy and to impose its own requirements concerning the range of affordability of low- and moderate-income housing units to be constructed by Toll Brothers. The requirements imposed by the court clearly should include low-income housing units affordable to households with incomes below forty percent of median income. Moreover, the court should redetermine the number of affordable housing units to more closely reflect the twenty percent minimum set-aside that this Court contemplated in Mount Laurel II.
In all other respects I join in the Court’s disposition of this appeal.
    Justice Zazzali joins in this opinion.
            

NO.     A-103/104    SEPTEMBER TERM 2000
ON CERTIFICATION TO Appellate Division, Superior Court    

TOLL BROTHERS, INC., a
Delaware Corporation,

    Plaintiff-Respondent,

        v.

TOWNSHIP OF WEST WINDSOR, a
Municipal Corporation of the
State of New Jersey located in
Mercer County, MAYOR AND
COUNCIL OF THE TOWNSHIP OF
WEST WINDSOR, and THE PLANNING
BOARD OF THE TOWNSHIP OF WEST
WINDSOR,

    Defendants-Appellants.

DECIDED     August 1, 2002
    Chief Justice Poritz    PRESIDING
OPINION BY Chief Justice Poritz    
CONCURRING/DISSENTING OPINION BY Justice Stein    
DISSENTING OPINION BY

CHECKLIST	AFFIRM	AFFIRM AND REMAND
CHIEF JUSTICE PORITZ	X
JUSTICE STEIN		X
JUSTICE COLEMAN	X
JUSTICE LONG	X
JUSTICE VERNIERO	X
JUSTICE LaVECCHIA	X
JUSTICE ZAZZALI		X
TOTALS	5	2