Cramer Hill eminent domain case reversed and remanded to trial court

In a reported case, Cramer Hill Residents Association v. Primas (PDF),  brought by the South Jersey Legal Services involving the Cramer Hill Neighborhood of Camden, the Appellate Division unanimously reversed the trial court regarding Camden’s attempt to use eminent domain to acquire several parcels of land under the Fair Housing Act, N.J.S.A. 52:27D-325. Camden sought to use this act rather than the Local Redevelopment Housing Law (LRHL) after the trial court threw out Camden’s redevelopment plan. The Courier Post reported that the city decided to redo the Cramer Hill redevelopment plan prior to the court’s ruling on July 17.

The basis for the city’s eminent domain action was that the acquisitions would increase the number of affordable housing units in Camden. In reversing the trial court, the Appellate Division agreed with plaintiffs that a hearing was required at the trial level to establish that the proposed acquisitions would in fact increase the number of afford housing units. The court noted:

We are nevertheless compelled to remand this matter for the trial court to conduct a fact-finding hearing to determine if the ordinance passed under N.J.S.A. 52:27D-325 will assist the City in meeting its fair share housing obligation under the FHA. Stated differently, the trial court must determine whether the proposed land acquisition plan authorized by the ordinance actually increases the number of affordable housing units in the City.

In going about this task, the trial court should be guided by the overarching public policy supporting the City's authority to take private property by eminent domain under N.J.S.A.
52:27D-325: the exercise of the power of eminent domain granted to municipalities under section 325 is expressly predicated upon a finding that the proposed land acquisition is "necessary or useful for the construction or rehabilitation of low or moderate income housing." Ibid. Absent such a finding, the City lacks the legal authority to proceed under N.J.S.A. 52:27D-325 (Slip Opinion, page 7)

The Court accepted the plaintiffs’ description the Cramer Hill neighborhood:

Cramer Hill is a neighborhood . . . located approximately one mile northeast of the downtown area of the City of Camden. Cramer Hill is cohesive and stable, having experienced no population loss between 1990 and 2000, according to Census Bureau reports.

Cramer Hill is approximately 1.8 miles long and approximately 0.8 miles wide, running from the Cooper River on the southwest, northeast along the Back Channel of the Delaware River, north to the boundary of the City of Camden and the Township of Pennsauken, and southeast to a rail yard. Cramer Hill encompasses over one hundred sixty-two (162) city blocks containing nearly four thousand (4000) properties.

The buildings are variously constructed of wood, brick and stone. The residential area contains modest, mostly single and semidetached family homes. They are primarily of nineteenth century construction with many fine period structures which continue to be solid, comfortable urban dwellings. Many homes are well-maintained and have attractively landscaped yards and gardens.

Cramer Hill is the only neighborhood in Camden City with primarily R1-A low-density zoning, the most restrictive type of zoning provided for in Camden's zoning code. The zoning designation requires large residential lots of 3,000 square feet, with 15 foot yard setbacks, structures no higher than two stories, and a maximum density of 14.5 homes per acre, giving the community an almost suburban character.

Cramer Hill contains one hundred twenty-two (122) storefront and other businesses. There is a thriving aggregation of family owned businesses primarily clustered along River Avenue, but also spread throughout the neighborhood. The majority of these business owners and operators are Latino and African-American. There are also a number of light industrial and some heavy industrial uses, including a demolition and salvage operation and a dredging operation, all primarily located along the Back Channel, between the residential community and the Channel. There are also industrial uses associated with the rail yard.

Cramer Hill is home to several large urban parks and playgrounds, ball fields and a swimming pool, as well as public and parochial schools and numerous houses of
worship of many faiths. (Slip Opinion at pages 8-10)

The court did however reject plaintiffs' argument that an approval by the Council on Affordable Housing (COAH) was a necessary predicate to the invocation of eminent domain under the Fair Housing Act. The court reached this conclusion based on a lengthy analysis of the legislative history of the statute and applicable case law. (See Slip Opinion pages 11-18.)

In reaching its conclusion, the court noted and relied upon the N.J. Supreme Court’s recent decision in Gallenthin Realty v. Borough of Paulsboro. The court reiterated that a hearing is necessary, when dealing with statutory construction and the use of eminent domain, to determine whether there is a rational basis to sustain the municipal action authorizing the use of eminent domain, which in this case, with reference to the Fair Housing Act, is designed to provide low and moderate income housing to the municipality:

Here, we have a similar responsibility. The municipal action here is subject to the same judicial scrutiny the Supreme Court conducted in Gallenthin. Our function is to ensure that the constitutional mandate of the Mount Laurel doctrine is not undermined by municipal action that, although taken in its name, may fall wide of the mark of actually fulfilling its purpose.

The people entrust the government with the power of eminent domain, with the expectation that it will be used sparingly, and in furtherance of a public good. The court's function is to ensure that this power is used consistent with and in furtherance of a clearly defined public good. Here, that public good is the creation of low and moderate income housing. The ordinance at issue professes to respond to that public good; yet the City has not offered evidence that this is in fact the case.

To pass constitutional scrutiny, the municipal action taken under the authority of section 325 must be supported by a well-developed record from which a reviewing court can find a rational nexus between the exercise of the power of eminent domain, and an increase in the number of affordable housing units. The City's mere, unsupported assertion in the body of the ordinance, that its governing body has determined that the exercise of eminent domain here is "necessary or useful" is insufficient.

As the parties challenging the ordinance, plaintiffs carry the burden of proving that this legislation is arbitrary and capricious because it does not do what it claims to do. That is, the taking by eminent domain of the Cramer Hill lots identified in the ordinance is not "necessary or useful" to the construction of low and moderate income housing in the City. (Slip Opinion at pages 23-24)