Rumson Estates, Inc. v. Mayor & Council of the Borough of Fair Haven

The Borough of Fair Haven (Fair Haven) (defendant) changed the zoning of a block on William Street from R-7.5, which required 60 feet of frontage and a minimum lot area of 7,500 square feet, to R-5, which required 50 feet of frontage and a minimum lot area of 5,000 square feet with a maximum floor-area ratio of .40. The R-5 ordinance also capped the floor area at 2,200 square feet for all single-family dwellings and stated that the smaller of the floor-area ratio and the cap applied. The purposes of the regulation were to ensure (1) proportionality of new houses to existing houses and (2) diversification of housing stock by building smaller, more affordable homes, as many municipal workers could not afford to live in Fair Haven. Rumson Estates, Inc. (Rumson) (plaintiff), owned 27,000 square feet in Fair Haven, which Rumson proposed to subdivide into three lots of roughly equal size. The floor-area ratio would have limited Rumson to a house of 3,600 square feet on each lot, but the cap limited Rumson to 2,200 square feet. Rumson brought suit, arguing that the ordinance violated New Jersey’s Municipal Land Use Law (MLUL), which authorized the regulation of density based on floor-area ratio. Rumson further argued that the ordinance violated New Jersey’s requirement of uniformity of regulations within each district for any given class or kind of building, because the cap only affected larger lots in the zone. The Appellate Division of the Superior Court of New Jersey found for Fair Haven. Rumson appealed.