Montvale Pushes Forward With Noncompliant Housing Plan That Makes Affordable Homes Optional, Authorizes Massive Data Center Instead
Montvale is attempting to use New Jersey’s affordable housing process to authorize a massive data center in place of affordable homes — a move that the retired judge reviewing the town’s plan under the Affordable Housing Dispute Resolution Program has already deemed noncompliant with state law.
Under a settlement agreement with a developer (SHG Montvale MB VI, LLC) filed with the court yesterday for the largest redevelopment site in town — the 34-acre former KPMG campus — Montvale would give the developer a choice: build a small, low-density inclusionary housing project or construct a large data center with no affordable housing at all and give the developer special benefits, including a Payment in Lieu of Taxes (PILOT), to build the data center.
“Calling this a housing plan stretches the term beyond recognition,” said Adam Gordon, executive director of Fair Share Housing Center. “Montvale is asking the court to bless an illegal end-run around its own public process, allowing its largest redevelopment site to become a massive data center with no affordable housing at all.
“Montvale’s mayor, Mike Ghassali, is so dead set on blocking affordable housing that he promised special treatment and tax breaks to a developer building a massive data center — without giving residents of Montvale and surrounding towns an opportunity to weigh in on its impacts.”
The KPMG property is not only Montvale’s largest redevelopment opportunity — it is among the largest in Bergen County. Yet the housing option offered appears unrealistic and less favorable than what the same developer has proposed on smaller sites under the agreement.
At the same time, Montvale claims that it does not have enough land to meet its affordable housing obligation — even though the remaining affordable housing required under law could easily be built at the KPMG site if the Borough were to allow similar development to what already exists elsewhere in Montvale instead of the data center.
Fair Share Housing Center has formally challenged Montvale’s plan, arguing that it violates the state’s Mount Laurel Doctrine and Fair Housing Act by turning affordable housing into an optional “fig leaf” while granting lucrative, unrelated redevelopment rights. Fair Share’s challenge also documents a wide range of additional deficiencies in their housing plan.
On February 10, the Affordable Housing Dispute Resolution Program rejected Montvale’s proposed settlement. The dispute over their housing plan will next be heard before a judge in late spring or summer.
Fair Share Housing Center filed a letter with the court on February 27 demanding public release of the settlement with the data center developer, which Montvale had not made public up until that point, and stating its intention to continue to fight any attempt to manipulate the state’s affordable housing laws to approve the data center.
Montvale then filed the settlement yesterday along with a letter doubling down on its attempt to allow the data center and give it special benefits through a redevelopment plan, including a Payment in Lieu of Taxes (PILOT) agreement.
Montvale’s Efforts to Overturn NJ’s Affordable Housing Law
Last Tuesday, the U.S. Supreme Court dealt Montvale a decisive blow in its lawsuit attempting to overturn New Jersey’s landmark 2024 affordable housing law — which requires every municipality to allow its fair share of affordable homes — when Justice Samuel A. Alito rejected the town’s emergency request to halt implementation.
The lawsuit was brought by three dozen municipalities, led by the Borough of Montvale, including many of the wealthiest and most historically exclusionary towns in the state. Using their local taxpayer dollars, they first filed a case in 2024 attempting to undermine New Jersey’s affordable housing framework.
This week’s Supreme Court’s decision followed a string of losses for Montvale and opponents of affordable housing in New Jersey. Last month, the Third Circuit Court of Appeals denied an emergency appeal, shortly after U.S. District Judge Zahid N. Quraishi dismissed the municipalities’ federal lawsuit and denied their request to delay the law’s implementation.
Last September, Mercer County Superior Court Judge Robert T. Lougy dismissed with prejudice a similar lawsuit brought by the same group of municipalities. Those claims were also previously rejected in two failed attempts to stay the law, two failed emergent applications to the Appellate Division, and a failed emergent application to the New Jersey Supreme Court.
“Montvale is effectively trying to have it both ways — arguing in court that the state’s affordable housing law requires too much of suburban municipalities, while simultaneously giving itself an escape hatch to avoid building housing at all and instead build a data center,” added Gordon.
Vast Majority of NJ Towns Are Creating Affordable Housing — Many More Than Ever Before
Montvale’s approach stands in stark contrast to the rest of the state. Almost 400 municipalities — the vast majority — have developed compliant housing plans under the new law, an unprecedented level of participation in New Jersey’s affordable housing process.
In New Jersey, the constitutional obligation for each municipality to allow its fair share of affordable homes, known as the Mount Laurel Doctrine, is calculated every 10 years in cycles known as Rounds. The affordable housing obligations are calculated by looking at factors in various regions of the state — such as job growth, existing affordability, and the growth of low- and moderate-income households — which determines the number of new affordable units each municipality must permit.
New Jersey’s law provides municipalities with broad flexibility to meet their affordable housing needs. Towns can choose from 100% affordable housing, mixed-income developments, supportive housing for seniors and people with disabilities, or the adaptive reuse of vacant malls and office parks. Municipalities retain control over planning when they engage in good faith. They lose that control only when they refuse to allow affordable housing and attempt to obstruct the process.
Recent polling underscores broad public support for New Jersey’s affordable housing framework. By wide margins, New Jersey voters say they want state leaders to prioritize building more homes over preserving local control (60%–26%) and to promote diverse housing options for people of all incomes rather than maintaining the preferences of current residents (62%–31%). Meanwhile, a majority of voters nationwide oppose data center construction in their areas.
“New Jersey’s affordable housing framework is about building stronger, more inclusive communities,” said Gordon. “It supports local businesses, expands opportunity, and ensures that people who contribute to a town’s success can afford to live there.”
