Developer Alleges Highlands Members Have Conflict

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.

Affordable Housing Amendments, Permit Extension Act Pass Legislature

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.

Appeals Court: Development Approvals Can’t Be Linked to Open Space Quid Pro Quo

The Appellate Division has ruled that the New Jersey Municipal Land Use Law does not authorize municipalities to demand open space set asides or payments in lieu to support recreational opportunities as a condition of a general development approval. New Jersey Shore Builders Assn. v. Township of Jackson, (N.J. App. Div. June 23, 2008)(approved for publication).

The unanimous appellate panel noted that while open space preservation is a “laudable” goal, the MLUL does not allow for such exactions in the land use approval process. The lone exception is for large, “planned developments” on at least five acres and totalling 100 units or more, for which the MLUL specifically provides for such recreational improvements.

According to the Star Ledger:

The ruling came from cases that builders’ associations brought challenging land use ordinances in Jackson Township in Ocean County and Egg Harbor Township in Atlantic County that required them to set aside land in developments for open space or recreational areas and facilities.

A Superior Court judge shot down the ordinance in Jackson Township as unenforceable last year, and the municipality appealed. Around the same time, another judge upheld Egg Harbor’s ordinance, and the builders’ association appealed.

Yesterday, the Appellate Division said the [MLUL] does not give communities the power to demand such things from developers in the name of preserving open space — a practice they had followed for nearly three decades.

. . . .

The court made a distinction between subdivisions common to New Jersey and planned developments — large-scale housing projects of at least 5 acres and 100 units, such as senior communities. Since the land use law specifically allows for open-space set-asides in the latter, the judges ruled that open-space requirements there are appropriate.

Developers who objected to set-asides, or “exactions” in planning parlance, often were given the option of paying a fee that would go toward building recreational space somewhere else in town or toward purchasing a big-ticket item, such as a fire engine, that a community would not otherwise be able to afford.

The court said yesterday those fees also are illegal if they are not limited to improvements for water, sewer, drainage and streets as provided in the Municipal Land Use Law.

Bill Dressel, the executive director of the League of Municipalities, stated that the ruling “removes a tool used by municipalities to ensure that usable open space and recreation areas are provide to serve the citizens who will be living in the developments.”

The decision will likely be attacked on two fronts: an appeal to the State Supreme Court and potential legislative amendments to the MLUL.

COAH Announces Information Sessions on New Rules

The Council for Affordable Housing has set up information sessions around the state in June and July to educate planners, attorneys, elected officials and members of the public as to the new third round COAH regulations.

The sessions will provide an overview of COAH’s revised third round rules, effective June 2, 2008, and the pending amendments, proposed June 16, 2008.

No registration is required. All sessions are 6 pm – 8 pm

Dates and Locations:

Tuesday, June 24, 2008
Gloucester County Library
389 Wolfert Station Road
Mullica Hill, NJ 08062

Thursday, June 26, 2008
Warren County Technical School
Performing Arts Center
1500 Route 57
Washington, NJ 07882

Tuesday, July 1, 2008
Ocean County Library
Mancini Hall
101 Washington Street
Toms River, NJ 08753

Wednesday, July 9, 2008
Wayne Public Library
461 Valley Road
Wayne, NJ 07470

Monday, July 14, 2008
East Brunswick Public Library
Meeting Rooms 2 and 3
2 Jean Walling Civic Center
East Brunswick, NJ 08816

Monday, July 21, 2008
Atlantic County Library
40 Farragut Avenue
Mays Landing, NJ 08330

COAH will be hosting four all-day seminars for professional planners interested in learning how to prepare a third round plan based on the revised third round rules that became effective on June 2, 2008. The sessions will include information on the new application format required for the submission of municipal petitions for substantive certification.

Please register by sending your name, organization and requested session to COAHmail@dca.state.nj.us.

Registration for each session will be from 8:30 am – 9 am. The session will run from 9 am – 4 pm with a one hour lunch break from 12 pm – 1 pm. Lunch will NOT be provided, but attendees are welcome to bring their own lunch or go out.

Dates and Locations:

Tuesday, July 22, 2008
Monmouth County “Ag Building”
Conference Room
4000 Kozloski Road
Freehold, NJ 07728

Monday, July 28, 2008
Hunterdon County Route 12 Complex
Building #1
Flemington, NJ 08822

Wednesday, July 30, 2008
Burlington County Human Services Building
795 Woodlane Road
Mount Holly, NJ

Monday, August 4, 2008
Meadowlands Environment Center
2 DeKorte Park Plaza
Lyndhurst, NJ

Done Deal on Permit Extensions?

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.

Senate Version of Permit Extension Act to Include Water Quality Standards

It appears that the Senate version of the Permit Extension Act (S-1919) will become more watered down. Senator Ray Lesniak (D-Union), chairman of the Economic Growth Committee, has indicated that the Senate Committee will consider amendments that place additional limitations on permits validly issued under prior regulations which will require meeting strict water quality and flood hazard controls enacted after those projects were conceived, designed and originally permitted and approved. These amendments would appear to thwart the underlying purpose of the legislation, namely, recognizing that economic conditions have delayed the industry from acting upon valid permits and extending such permits for an additional period of time.

According to the Star Ledger:

Sen. Raymond Lesniak (D-Union), chairman of the Senate Economic Growth Committee, postponed a vote on the bill, saying he wanted to draft amendments requiring projects to meet up-to-date standards for protecting water quality and flood plains.

“The environmentalists would go further,” Lesniak said. “They would like to include all general health and safety issues, and I don’t know how you do that.”

Citing one example of broader safety considerations, Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said chromium standards were toughened last year and building projects that do not meet them should not be allowed to proceed.

Tittel considered yesterday’s delay a victory in that it slowed down a bill he said was being “railroaded” through the Legislature.

Lesniak said that without permit extensions, New Jersey’s economic recovery would be delayed as developers go through the paperwork needed to renew permits that had lapsed.

“We don’t want to wait two to three more years after the economy gets going for our people to get back to work,” Lesniak said.

Alan Steinberg, the regional administrator of the U.S. Environmental Protection Agency, notified lawmakers last week of his concerns the bill could violate federal standards for water quality.

Lesniak said he hopes a revised bill can be sent to Gov. Jon Corzine before lawmakers take their yearly summer recess.

The full article is linked here.

Assembly Passes Affordable Housing Bill

In a vote essentially along party lines, Assembly Speaker Joseph Roberts’s affordable housing reform bill was passed 45-33. The only “no” vote among the Democratic members of the Assembly was Linda Stender (D-Union), who is running for an open seat in the Republican-leaning 7th Congressional District against State Senator Leonard Lance (R-Hunterdon). One of the major overhalls to the Fair Housing Act in this bill is the elimination of Regional Contribution Agreements, or RCAs, which allow suburban and rural towns to transfer their affordable housing obligations to older suburban and urban areas in exchange for a calculated payment. As a result, all communities, with the exception of five regional planning areas, must provide for their fair share of affordable housing within their municipal boundaries.

According to the Star Ledger:

While ending the RCAs, the bill would raise new funds for construction or rehabilitation of affordable homes by charging developers a 2.5 percent fee on the value of commercial buildings they erect. Of the $163 million the state hopes to raise through the levy, $20 million would be set aside annually to replace the money that was provided by the affluent towns. The remainder would go toward providing affordable housing statewide.

Another $109 million in state realty transfer fee revenue, and an estimated $190 million in development fees already raised but not yet spent by municipalities, also would go toward the housing.

The legislation also would create five areas, each with 25 towns, that would work collectively to provide affordable housing in their regions. In four of those areas — the Highlands, the Pinelands, the Meadowlands and Fort Monmouth — they would seek to place as much of 50 percent of their affordable housing near mass transportation. The fifth area, the Atlantic City region, would have no restrictions on where the housing could be placed.

The legislation also would require that 20 percent of state-assisted development projects, such as transit villages, be set aside for affordable units. It would increase the maximum income to qualify for affordable housing from $63,000 to $87,000 for a family of four, and replace every affordable unit lost through redevelopment with another.

The proposal would create a State Housing Commission to develop an annual strategic housing plan, submit annual reports to the Legislature and require regular publication of affordable housing statistics.

For the full article from the Star Ledger, click here.

Legislative Update: Permit Extension Act Lives, But With Changes

Facing substantial opposition from environmental groups (and, apparently, the Governor’s Office and NJDEP), key provisions of the Assembly version of the proposed Permit Extension Act (A-2867) were eliminated. The bill, as modified, will still be a lifeline that allows builders to extend many local and state approvals which are in peril of expiring until the end of 2010 (the original legislative proposal provided an extension until the end of 2012 and included approvals within the Highland and Pinelands regions).

Municipal officials and industry advocacy groups have joined together to support this legislation due to the difficulty in the current fiscal environment for developers to obtain financing and the overall downturn in the housing and commercial development markets. According to the Home News Tribune:

A legislative committee voted Thursday for a plan to extend the lives of development permits across the state, a move backers hoped would jump-start the economy over objections from environmental groups.

“We compete for business. … New Jersey has to stay competitive,” stressed Assemblyman Louis Greenwald, D-Camden, a sponsor of the ultimate measure that was created by compromise in the Assembly Environment and Solid Waste Committee.

“This is not en environmental bill,” said Assemblyman Joseph Malone III, R-Burlington. “This is about putting people back to work.”

That Democrat Greenwald and Republican Malone testified together before the committee underscored how lawmakers from both major parties support the idea of allowing builders a window to crank up projects that have been delayed because banks have been stingy about lending money.

“It is less bad,” said the Sierra Club’s Jeff Tittel, who spoke for an alliance of developers and others opposing the measure, after the plan was changed.

In its amended form, the bill offers builders a two-year extension on their permits — down from six — and does not apply to protected areas in the northwest Highlands or the Pine Barrens and other protected patches of New Jersey.

The bill moves to the full Assembly for a vote and the State Senate Economic Growth Committee was scheduled to take up the legislation (S-1919) today (Monday, June 16), but the hearing on the bill was postponed at the last minute. It is uncertain whether it will be on their agenda on June 19.

For the full article, click here.

Assembly Poised to Pass Affordable Housing Compromise Bill

On Monday, June 16, the full Assembly is expected to vote on a revised version of A-500, a wide-ranging affordable housing reform bill, which eliminates widespread use of regional contribution agreements (RCAs). The Assembly Appropriations Committee passed the bill, with amendments, on Thursday. Also on Monday, the Senate Budget and Appropriations Committee will take up similar legislation which is the result of a compromise between Assembly Speaker Joseph Roberts and State Senator Ray Lesniak (D-Union). Click here for Assembly Affordable Housing Bill – Revised

According to Saturday’s Star Ledger:

The Roberts-Lesniak legislation is designed to reshape New Jersey’s 20-year affordable housing effort. It would use $20 million of the $80 million to $120 million the state and municipalities hope to raise through a fee on the new commercial development for affordable housing in urban areas, Lesniak said.

The bills would create five zones: the Meadowlands, Fort Monmouth, the Highlands, the Pinelands and Atlantic City. Towns within four of the zones could transfer no more than 50 percent of the housing they are required to provide to a neighboring town. Only the Atlantic City zone would be permitted to exceed the 50 percent cap because of a large demand for affordable housing in the area.

For the full article, click here.

The Home News Tribune also reported on the legislation, calling the bill “a sweeping overhall to the state’s affordable housing policy.” The Home News article also highlighted other proposed changes:

The bill would also levy a new fee — 2.5 percent — on all nonresidential development to finance housing construction or rehabilitation.

If passed, all state-assisted development projects would have to set aside 20 percent of units for affordable housing; 25 percent of affordable housing units would be set aside as “very low income” for families earning 30 percent of the state’s median household income; and developers including affordable housing in their projects would receive density bonuses, meaning they could construct more units than currently allowed.

For the full article, click here.

Sierra Club Finds Nothing “Smart” In Economic Stimulus Bills

With the Permit Extension Act already under fire despite substantial legislative support, the Sierra Club has begun an assault on the entire Smart Growth Economic Development Coalition’s economic stimulus package, referring to it as the “Dirty Dozen.”

The Builders Association and their allies are releasing a package of bills they call an economic stimulus package. In fact, what the bills would do is overturn environmental laws, undermine good planning, promote sprawl and give tax breaks and public subsidies to wealthy developers at a time when the state of New Jersey is going broke.

This package of bills will put sprawl on steroids and allow for the paving over of half of New Jersey’s open spaces.

The bills in the package are taken from the Department of Community Affairs’ (DCA) Housing Task Force reports, which were written in secret without any input from the public or environmental or citizens’ groups. They include:

1. The Permit Extension Act — This bill would extend all permits for six years and revive those that have expired within the past two years, undermining the ability of the state to implement new environmental regulations, building codes, or local zoning ordinances and indiscriminately promoting building, regardless of whether the project is a good one or a bad one.
. . . .

For the Sierra Club’s critique of all 12 legislative proposals in an Op-Ed entitled “Builders Gone Wild” at the Asbury Park Press website, click here.