The New Jersey Supreme Court on Tuesday said Gov. Christie's "moribund" affordable-housing agency had failed to do its job, and effectively transferred the agency's regulatory authority to lower courts.

The ruling brought something of a resolution to a decade of litigation over the agency's proposed rules to determine municipalities' housing obligations for low- and moderate-income residents.

For years, developers, cities and towns, environmentalists, and the state have wrestled with how to create affordable housing in a state where hundreds of thousands of residents struggle to pay the rent. Underlying that debate is tension over class, race, and sprawl.

Tuesday's unanimous decision came in response to a lawsuit filed last fall by affordable-housing advocates alleging that the Christie administration had failed to meet a court-ordered deadline to issue regulations consistent with the court's Mount Laurel doctrine, which requires towns to provide for the realistic construction of affordable housing.

The justices agreed and said the administrative process by which municipalities submit housing plans to the state Council on Affordable Housing (COAH) "has been rendered futile."

Courts will have to intervene, the justices decided.

The ruling "will present an avenue for low- and moderate-income New Jersey citizens, and entities acting on their behalf, to challenge any municipality that is believed not to have developed a housing element and ordinances that bring the town into compliance with its fair share of regional present and prospective need for affordable housing," Justice Jaynee LaVecchia wrote for the court.

Chief Justice Stuart Rabner, a Democrat whom Christie renominated last year after the governor had appeared determined to oust him, recused himself, as he had in previous affordable-housing cases.

"Too many New Jersey municipalities exclude people who work in the stores and diners of New Jersey," said lawyer Kevin D. Walsh, who argued the case for the Cherry Hill-based Fair Share Housing Center.

"We now have a way to make sure they are not excluded and to ensure there are fair housing opportunities for people who are forced to live far from their jobs and families, and who have been displaced by Superstorm Sandy," he said. "The court properly responded to the failure of the state government to implement the law."

LaVecchia emphasized that the ruling did nothing to stop COAH from adopting new rules or the Legislature from passing a new law that would take the matter out of the courts' hands.

Christie spokesman Kevin Roberts said the ruling was "a call to action to finally finish the job of reforming our affordable housing system so that it is no longer a costly burden to the people of New Jersey and actually encourages sound development."

The Democratic-controlled Legislature worked with Christie during his first term to try to overhaul affordable housing law, but could not reach an accord.

Roberts said Christie supported a "process for encouraging the development of affordable housing that is grounded in economic feasibility and land-use planning."

Tuesday's ruling opened the door for litigation against local communities alleged to have failed to provide their fair share of affordable housing. The court said the ruling would take effect in 90 days, after which municipalities would have 30 days to demonstrate their compliance with the constitutional obligation to provide an opportunity to build affordable housing.

That obligation was established by a series of Mount Laurel decisions and codified by the Fair Housing Act of 1985, which created COAH and authorized the agency to determine municipalities' affordable housing obligations.

The original 1975 Mount Laurel case was brought by poor black residents who had been displaced because of development. The township refused to let the residents build affordable garden apartments, and the court found that was discriminatory.

Under Tuesday's ruling, exclusionary zoning litigation against municipalities may proceed only after "a court has had the opportunity to fully address constitutional compliance and has found constitutional compliance wanting," LaVecchia wrote.

Brian C. Wahler, president of the New Jersey League of Municipalities, which opposed Fair Share's lawsuit, praised the court's "recognition that municipalities should not be punished for COAH's failure to act, allowing municipalities breathing room to voluntarily comply and be protected from costly litigation."

But he said a legislative solution was preferable.

Fair Share sued COAH last fall after the board deadlocked on a motion to adopt new rules for municipalities. Fair Share alleged that COAH's failure to act violated a Supreme Court order.

The Christie administration argued that the board had not intended to violate the order, noting that by statute the board consists of members who represent different interests with regard to affordable housing.

In September 2013, the Supreme Court struck down COAH's proposed regulations, ruling that they were inconsistent with the Fair Housing Act and the Mount Laurel doctrine the legislation embodied.

The court gave the agency five months - then granted an extension until last November - to develop rules consistent with those that had been used through 1999, when the last regulations expired.

At oral arguments in January, the deputy attorney general acknowledged that COAH had neither met since its October meeting nor scheduled future meetings.

The court said Tuesday that municipalities should develop plans based on methodologies approved by COAH before its last regulations expired.

About 60 municipalities had submitted housing plans and received certification from COAH before the September 2013 court ruling, which invalidated the regulations upon which the towns' plans were based.

An additional 300 municipalities had temporarily won immunity from litigation by submitting resolutions of intent to submit affordable housing plans.

The Supreme Court said these municipalities can seek court declarations that their affordable housing plans are "presumptively valid" and can have no more than five months to prove it.

Courts may provide towns temporary immunity from litigation during this process, LaVecchia wrote.

aseidman@phillynews.com

856-779-3846 @AndrewSeidman