New Jersey Zoning Watch

The Star Ledger is reporting that the Highlands Council has endorsed an agreement with the Department of Community Affairs that allows municipalities which adopt stringent restrictions on development in their communities to obtain reductions to their affordable housing obligations.

According to the Ledger:

Under the agreement, strict environmental constraints like water availability, steep slopes and the proximity of pristine waters would limit the number of affordable housing units in a particular municipality. At the same time, 20 percent of any new residential construction in those communities must be affordable, and projects with affordable housing will receive priority for approvals.

The adoption of the Highland master plan by individual communities before the end of the year, will also allow these communities additional time to submit a housing plan to the Council on Affordable Housing.

Communities that sign on would get an extra year to file their plan for meeting their affordable housing obligation. And the number of affordable housing units they would need to build would be determined through the Highlands Council’s analysis of sustainable development.

Highlands towns that choose not to conform to the regional master plan would have to follow COAH rules like every other town in the state, under the agreement. Those towns must file their affordable housing plan by Dec. 31.

The agreement also notes that there are still 3,000 affordable homes that must be built in the Highlands region as a result of growth that has already taken place.

For the full article, click here.

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Paul Mulshine, a columnist with the Star Ledger, wrote a particularly distressing piece in Tuesday’s paper regarding the plight of one homeowner and her losing battle with the state over burdensome environmental regulatory requirements as a result of enactment of the Highlands Act in 2004.

While it is important to focus on the macro issues of preserving water quality and open space that were the driving force for many regulators and legislators who supported the Act, one must not lose sight of the burden the Act has put upon many property owners who bought property intending for it to be the nest egg for their family and who ended up with a goose egg. Furthermore, funding sufficient to compensate landowners for their losses is not yet available and, given the current economic climate, will not likely be part of the state’s toolkit for some time.

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The New Jersey Supreme Court heard oral argument this week to decide whether the Highlands Act unjustly barred development of a 93-acre lot retroactively without providing out just and proper compensation.

According to the Asbury Park Press:

Landowners OFC, LLC received approval from Washington Township to subdivide the lot to build 26 homes in 1999 — five years before the Highlands Act, which aims to limit development to protect drinking water supplies, became law. But an error in approving a water supply permit by a township official delayed the application, resulting in the project’s final approval missing the development deadline set under the 2004 law.

While the Justices reserved decision, at least two members of the panel seemed sympathetic to the plaintiff’s claims:

Looking at how OFC’s permits were botched and TDRs were not available to them, Associate Justice Barry T. Albin said the totality of failure resulted in “a developer caught into this intricate governmental mess.” Albin earlier, however, said that while the situation may be unequitable, the company’s due process rights were not necessarily violated.

“I don’t care where you lay the blame, you certainly can’t lay it at the foot of the plaintiff because they had nothing to do with it,” added Associate Justice Roberto Rivera-Soto.

For the full article, click here.

For the Appellate Division opinion in OFP, LLC v. State of New Jersey, finding that the plaintiff failed to pursue a hardship waiver and, thus, failed to exhaust its administrative remedies, click here.

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In an effort to encourage municipal buy-in to the Highlands master plan, the Highlands Council has agreed to negotiate extensions of up to one year for a municipality to submit its fair share housing plan under the newly-enacted regulations adopted by the Council on Affordable Housing - so long as the municipality adopts the recommendations contained within the Council’s master plan. However, the Department of Community Affairs has not yet approved the plan, which leaves Highlands municipalities in limbo with three months to the deadline for filing a third round plan.

According to the Daily Record:

The New Jersey Highlands Council on Thursday gave its executive director Eileen Swan the ability to negotiate an agreement with the state Council on Affordable Housing that would give communities that announce their intention to conform to the master plan an additional year to draw up new housing plans to meet their COAH obligations.

For the full article, click here.

However, the Star Ledger is reporting that DCA has not formally approved this agreement.

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Despite the substantial impediments to development in the Highlands imposed upon over half of the acreage in the region as a result of the Highlands Act, environmentalists are not satisfied. Several last minute amendments to the plan proposed by the environmental lobby on the eve of the Highland Council’s public hearing to vote on the Highlands master plan were rejected. As a result, environmental groups have been lobbying Governor Corzine to veto the Highlands master plan.

The latest argument being presented to defeat the current master plan is that the master plan adopted by the Highlands Council does not take into account the new affordable housing rules and legislation (A-500/S-1783), which was signed into law by the Governor on July 17 - the same date the Highlands master plan was voted on by the Council. As a result, environmentalists argue, the Governor must veto the plan so the Council will incorporate the changes to the Fair Housing Act into the plan.

The Star Ledger reports on the perceived incongruities between the plan and A-500 here.

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The Highlands Council, by a vote of 9-5, adopted the regional master plan for the 860,000 acre Highlands, which encompasses portions of Morris, Sussex, Bergen, Passaic, Warren, Somerset and Hunterdon counties. The plan, which is still subject to final approval or veto by the Governor within the next thirty days, places severe limits or outright restricts development on more than half of the 1,250 square miles of land that are within the Highlands boundaries. While the enabling legislation purports to be a watershed protection act, many critics charge that the boundaries for preservation or planning were arbitrarily drawn and that the law is more of an open space protection law than a plan to preserve drinking water for other regions of the state.

During the day-long proceedings on Thursday, many landowners complained that their properties were made worthless by the legislation and the master plan, with no monetary relief in sight from the state, despite provisions in the Act requiring compensation.

According to the Star Ledger:

The plan that won approval included an estimate that it will cost $1.3 billion over the next decade to preserve lands most in need of protection, even as the state’s open-space coffers begin to run dry.

The council also needs millions of dollars to fund a complex transfer-of-development-rights program — intended to funnel money from developers seeking approvals for high-density development elsewhere to Highlands landowners no longer able to develop their land.

Where the money for preservation will come from is an unanswered question, and the other two council members who voted against the plan, Kurt Alstede and Glen Vetrano, cited that issue.

Alstede said many of his friends lost equity because of the Highlands Act, and he termed the Legislature’s failure to supply a funding source for compensation “pitiful.”

“They are told the money will come someday,” he added. “I ask, how long must they wait?”

For the full Star Ledger article, click here.

For the Record’s view of the proceedings, click here.

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The Highlands Council is expected to approve the Highlands master plan today, which severely restricts development in over 80 percent of the 800,000 acres within the seven counties encompassing the Highlands region. There is substantial opposition to the plan from both ends of the spectrum, with environmentalists charging that the plan is too watered down while builders, farmers and property owners claim that the Highlands Act and the plan unduly limit their ability to develop their property and have destroyed their land values.

The Daily Record provides a comprehensive review of the plan here.

The Star Ledger outlines the issues in a question and answer format here.

Star Ledger columnist Paul Mulshine provides his take on the Highlands master plan here.

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In many controversial development applications, particularly when the arguments against the merits of the project are not going so well, objectors lob claims of conflicts of interests at industry professionals and local officials, hoping the smear tactic will influence the decision making process.

This is not one of those cases.

Here, a developer who is interested in building 48 single family homes on a 400 acre tract in the “preservation area” of the Highlands in Montville has alleged that two Highlands Council members have impermissible conflicts of interest due to their holding paid positions with environmental advocacy groups.

According to the Star Ledger:

Developer Anthony Pio Costa is asking the state ethics commission to investigate whether it is a conflict of interest for two paid leaders of environmental groups to serve on the Highlands Council.

In a letter dated June 17, Pio Costa singles out council members Tracy Carluccio, deputy director for the Delaware Riverkeeper Network, and Tim Dillingham, executive director of the American Littoral Society.

“They are members of advocacy groups,” Pio Costa said in a phone interview. “They’re already predis posed to keep everything as green as possible. They’re not going to give you an unbiased look.”

For more on this story, read the Star Ledger article here.

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In a frenetic day of wheeling and dealing on the $32+ billion State Budget, two key bills that we have been closely tracking received approval from both houses of the legislature, sending them to Governor Corzine’s desk with the expectation that both will be signed in short order.

Affordable Housing Policy Reform

A-500/S-1783, which amends portions of the Fair Housing Act, the Local Redevelopment and Housing Law and the Administrative Procedure Act, provides significant changes to New Jersey’s approach to affordable housing requirements. Central to the bill is the elimination of Regional Contribution Agreements (RCAs) except in specific regional planning areas such as the Highlands, Pinelands, Ft. Monmouth, Meadowlands and Atlantic City region. If a municipality outside of these regional planning areas has received COAH or court approval to proceed with a RCA, they may do so. If it has not received final approval, it must make provision for constructing its fair share obligation within its borders.

The legislation anticipates that the elimination of RCAs will be counterbalanced by a new statewide 2.5 percent development fee which will be imposed on “all” non-residential development (with some exceptions such as non-residential development within a designated transit village area, structured parking facilities, etc.) including expansion of existing facilities. Under the provisions of the bill, the development fee must be paid prior to the issuance of a Certificate of Occupancy. The legislation contemplates payment under protest and the ability to challenge the assessment of the “equalized assessed value” which is the basis for imposition of the fee. This legislation effectively eliminates the requirement under current COAH regulations that a non-residential developer provide an affordable unit for every 16 jobs purportedly created and pre-empts any current municipal development fee ordinances.

Municipalities that petition COAH for substantive certification of a housing plan can create dedicated escrow funds for the revenues generated from new non-residential construction which must be spent on meeting that municipalities affordable housing needs within a four-year period. Those municipalities that have not applied for substantive certification must send the fees collected to a statewide Affordable Housing Trust Fund, which will be administered by DCA for the creation of affordable housing throughout the state.

The legislation also requires state agencies, when preparing rule proposals, to include a “Housing Affordability Impact Analysis” and “Smart Growth Development Impact Analysis” to force regulatory agencies to focus on whether proposed regulations will have an impact on the affordability or availability of housing.

Other amendments include requiring the replacement of affordable housing on a 1:1 basis when a redeveloper eliminates existing affordable housing in constructing or assembling a redevelopment project and mandates that the comparable housing be located in or in close proximity to the redevelopment; mandating a 20 percent affordable housing component in designated transit village and urban transit hub areas while eliminating the 2.5 percent non-residential development fee for such projects; and mandatory inclusionary development requirements for property that is rezoned from commercial or industrial to residential. The legislation also encourages that financial incentives, including density bonuses, be incorporated into a municipality’s fair share/housing plan.

Permit Extension Act

A-2867/S-1919 provides for the tolling of many types of development permits and government approvals from January 1, 2007 to July 1, 2010. Under no circumstances will approvals tolled under this legislation exend further than six months past the July 1, 2010 extension period. Notable exceptions that are not tolled by this Act include approvals for development in “environmentally sensitive areas” and flood hazard area permits, unless a project has already commenced.

We will be providing a more comprehensive overview of the final versions of these legislative proposals once they are signed into law by Governor Corzine.

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It appears that a compromise has been reached on the proposed Permit Extension Act. The Senate version of the bill, S-1919, in its current form, will extend most development permits to December 31, 2010. It will also revive permits that expired subsequent to January 1, 2007. The Smart Growth Coalition originally was looking for a backward reach to 2006. The Assembly version, A-2867, as amended earlier this month, allowed for only a limited resuscitation clause to January 1, 2008.

The Senate version also eliminates any extension of Flood Hazard Area permits (unless work has already commenced on a portion of an approved project) - a provision that had not been in the Assembly bill. Any Stream Encroachment or Flood Hazard Area permit that has expired or will expire will not be extended by the Senate version.

The current Assembly version has been amended to mirror the Senate bill.

To read the Star Ledger article regarding the Act’s status, click here.

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