Builders were dealt a blow in October when the U.S. Supreme Court opted not to hear a case in which Medford, N.J.–based builder MiPro Homes claimed the township of Mt. Laurel, N.J., unlawfully seized a 16-acre parcel that was under site development and had been legally zoned and approved for construction.

The case, which dates back to 2002, pitted the township against the builder. The township claimed that exercising eminent domain to protect open space was perfectly legal, while the builder argued the township's real goal was to halt residential development.

Home builder MiPro won the case in trial court. The lower court agreed with the builder that Mt. Laurel sought to stop development that it determined would be a drain on municipal services. That decision was reversed on appeal and the reversal was upheld late last year by the New Jersey State Supreme Court.

“The message to all future [site-plan] applicants is that you can't rely on New Jersey's policies when it comes to residential development,” says Patrick O'Keefe, former CEO of the New Jersey Builders Association. The state trade group worked closely with the Builders League of South Jersey and the NAHB on the MiPro case.

“The mere mention of the words ‘open space' is sufficient justification to grab a parcel of land, irrespective of what the state or local government had planned,” O'Keefe continues.

Getting the U.S. Supreme Court to hear the case was a long shot, especially since the court accepts less than 1 percent of the cases petitioned.

O'Keefe said the builders hoped the court would view the MiPro case as a chance to clarify the opinion of Justice John Paul Stevens in the Kelo case, in which Justice Stevens said New London, Conn., was justified in condemning the Kelo property because it had conducted a rigorous planning process prior to the taking, and that redevelopment was an acceptable public use.

“Preserving open space is a proper public use, but in this case it was not part of a well-thought-out plan,” says Mary Lynn Huett, director of legal services for the NAHB. “The home builders contend that it was an ad hoc reaction to residential development.”

Michael Mouber, the township attorney who handled the MiPro case for Mt. Laurel, says the notion that the township condemned the property in a vacuum is not accurate.

He says that at least seven months before the condemnation, the township notified MiPro in writing that it intended to preserve the land as open space. He adds that the town council also stated its intentions publicly at a town meeting several months before the condemnation.

Mouber says MiPro determined it could make more money building homes on the property than the $2.1 million the township offered, so the builder got itself into a “cat and mouse” game with the municipality.

The Mt. Laurel attorney says the combination of a series of recent state laws that allow municipalities to preserve open space by holding referendums to raise tax money, along with the state Supreme Court decision, has put municipalities on a more even footing with developers.

“Up until the laws were passed and we won this case, municipalities were powerless to compete with developers for land, because they didn't have the money,” Mouber says, adding that, by and large, taxpayers in New Jersey are willing to pay to preserve open space.

Line Item Veto

Green advocates fight HOA bans on clotheslines.

Neo-traditional architecture, tree-lined streets, and quaint corner stores have become staples in traditional neighborhood developments designed to invoke the nostalgia of simpler times. But there's one old school feature these towns have been just as happy to do without: the clothesline, which, by neighborhood-design–police standards, is an eyesore.

Ah, but with mounting concerns over greenhouse emissions and energy conservation, this low-tech technique could be poised for a comeback. At least that's the hope among proponents of the “Right to Dry” movement, a growing cadre of citizens advocating al fresco air-drying as a sustainable alternative to electric dryers. Grassroots activists have commanded attention of late by staging protests in local jurisdictions and promoting state legislation that would overrule local HOA bans on clotheslines.

“How we do laundry is a big deal, because we all do it,” notes Alexander Lee, executive director of Project Laundry List, a nonprofit advocacy group that recently began enlisting college students via Facebook to help further the cause. Six percent to 10 percent of residential electric consumption is attributable to the dryer, he observes, with the average household spending more than $100 per year to dry its clothes.

Legislative proposals to lift clothesline bans have been floated in North Carolina, Florida, Utah, and Vermont. And they could be coming to a community near you. - J. Sullivan

Jumbo Comeback

Jumbo loans, a struggling market now, will be back in full force.

Dick Kovacevich, Chairman of Wells Fargo, told the audience at the 37th Annual Bank of America Investor Conference in San Francisco that while the current credit environment may reek of “war, pestilence, and famine,” all hope is not lost for the nonconforming, or jumbo, loan market.

Mortgage loans above $417,000 are considered jumbo loans. In many parts of the country where home prices are high, residents are heavily reliant on jumbo loans and are struggling to get financial backing for such loans during the credit crunch.

“The nonconforming market will be back in no time at all. If you were worried that that's going away, don't worry. Trust me,” Kovacevich said at the conference according to numerous published reports.

One way that could happen is if Fannie Mae and Freddie Mac are given permission to buy, insure, and securitize jumbo loans. Currently they are not allowed to, though U.S. Treasury Secretary Henry Paulson has been quoted as saying he'd consider allowing the Government Sponsored Entities to buy such loans—temporarily.

Whether or not jumbo loans do make a come back, some other mortgage product, probably a risky one, will spring up, said Kovacevich.

“Believe me, this is all going to happen again,” he said. “We never learn our lesson.” - E. Butterfield