What is the NJ state legislature up to?

I am still trying to make sense of it right now too…
NEW JERSEY Back To Map

State Legislative Calendar: The Legislature meets for a term of two years, split into two annual sessions. Each annual session starts the second Tuesday in January and normally lasts the entire year. Bills carry over from the first year into the second year.  The General Assembly and Senate set their own meeting schedules throughout the sessions, meeting for an average of 40 session days per year.

The New Jersey State Legislature convened its 2008-09 Session on January 8, 2008 and reconvened for the second annual session on January 13, 2009.  The two year term is expected to adjourn on January 8, 2010.

State Level Activity:

The Legislature is currently considering the following bills related to smart growth.

Affordable Housing

ACR192Constitutional Amendment Defining Exclusionary Zoning and Banning Affordable Housing Impact Fees:  This proposed constitutional amendment would define “exclusionary zoning” as “land use actions which foster the production of market-rate housing and commercial development to the exclusion of affordable housing for lower income families, the exclusion of zones for multiple-family dwellings, zoning for residential densities which will not permit the production of affordable housing for lower income families, and the adoption by municipalities of timed-growth zoning ordinances which effectively place a moratorium on the construction of housing for a period of time which is not limited by the existence of an emergency.”  This definition would be binding upon the courts, as would legislatively-adopted definitions of what constitutes “discriminatory practices in the exercise of land use powers by municipalities.” This constitutional amendment would also prohibit the imposition of any fees on development for the purpose of funding affordable housing.  Such fees were recently authorized pursuant to P.L.2008, c.46, which was enacted in July 2008 (see November 2008 issue of Smart Growth e-News for details)Status: Referred to Assembly Housing and Local Government Committee on Sep. 22, 2008; Identical resolution Introduced in the Senate and Referred to Senate Community and Urban Affairs Committee on Jan. 13, 2009.

Implications for the Real Estate Industry:
It is generally desirable to have the legislature craft a clear definition of “exclusionary” zoning.  Doing so could simplify the analysis and process for challenging a zoning ordinance as exclusionary.  It could also result in local governments adopting less exclusionary policies and consequentially opening greater opportunities to build affordable housing in New Jersey.  Eliminating affordable housing impact fees is also desirable as it requires the costs of providing affordable housing to be shared more equitably across society, as opposed to only by the developers and purchasers of new housing development.

A3697Amendments to “Fair Housing Act”: This bill offers several amendments to the State’s “Fair Housing Act.”  First, it provides that a municipality’s housing element only needs to provide for the zoning of the present and prospective affordable housing need, not the guarantee of the actual construction of those units. Second, this bill would prohibit the Council on Affordable Housing (COAH) from including as “vacant land” any parcel of real property located in the Highlands preservation area, the Pinelands area, or the coastal area when computing a municipality’s “fair share obligation.”  Third, this bill would repeal two elements of P.L.2008, c.46, which was enacted in July 2008 by (1) authorizing a municipality to transfer up to 50% of its fair share obligation to another municipality through regional contribution agreements; and (2) repealing the non-residential development fee, which imposes a fee of 2.5% on non-residential construction.  The bill would also authorize a municipality to provide age-restricted units of housing to satisfy 50% of its fair share obligation.  Lastly, the bill would exclude the construction or reconstruction of a single – or two – family house occupied as a primary residence from the definition of “new residential construction” used in computing a community’s “Fair Share Obligation.”   Status: Referred to Assembly Housing and Local Government Committee on Feb. 5, 2009; no further action.

Implications for the Real Estate Industry:
Generally speaking, the provisions of A3697 would decrease requirements for local jurisdictions in terms of zoning for and incentivizing the construction of affordable housing.  The bill would probably make it more difficult to build affordable- or moderately-priced housing in many New Jersey municipalities.

A3714 – Amendments to “Fair Housing Act”: This bill also offers several amendments to the “Fair Housing Act.” Similar to A3697, it would (1) repeal the non-residential development fee, and (2) exclude the construction or reconstruction of a single – or two – family house occupied as a primary residence from the definition of “new residential construction” used in computing a community’s “Fair Share Obligation.”  In addition, it would require the Council on Affordable Housing (COAH) to estimate the prospective need for affordable housing at the State and regional levels solely on the amount of residential growth, prohibiting it from considering non-residential development.  Status: Referred to Assembly Housing and Local Government Committee on Feb. 5, 2009; no further action.

Implications for the Real Estate Industry:
A3714 is designed primarily to remove disincentives for new commercial development in New Jersey.  These disincentives currently consist of impact fees on new commercial development and the fact that the permitting of new commercial development increases a community’s fair share obligation, making it less attractive for local jurisdictions.  While the effort to remove barriers to new commercial development is a good idea, the proposed shift in how fair share obligations are calculated might make it less likely that communities would accept new market rate housing development.

A3738Amendments to “Fair Housing Act.” This bill also offers several amendments to the “Fair Housing Act.”  In contrast to A3697 and A3714, this bill would not abolish the 2.5% non-residential development fee, but rather suspend it until July 1, 2010.  This bill would also suspend affordable housing fair share obligations that are attributable to non-residential development that would be exempt from the fee under this bill and provides a reimbursement mechanism for those developers who have already paid the development fee.  Status: Referred to Assembly Housing and Local Government Committee on Feb. 9, 2009.

S2511 – Prohibits Use of “Build-Out” Approach to Determine Fair Share of Affordable Housing Need in Given Region and Vests Municipalities with Authority to Determine Their Own Fair Share Obligations: This bill would prohibit the use of a “build-out” approach to determining the need for affordable housing at the State and regional levels by the Council on Affordable Housing (COAH).  This bill would also prohibit COAH from determining the fair share obligations for  municipalities, making municipalities responsible to determining this need following COAH’s guidelines. A municipality’s determination would be deemed presumptively valid but subject to modification by the Council through mediation.  Status: Referred to Senate Community and Urban Affairs Committee on Jan. 26, 2009.

Implications for the Real Estate Industry:
Generally speaking, the provisions of S2511 would decrease requirements for local jurisdictions in terms of zoning for and incentivizing the construction of affordable housing.  The bill would probably make it more difficult to build affordable- or moderately-priced housing in many New Jersey municipalities.

ACR192 – Clarification on Constitutional Obligation of Municipalities Regarding Affordable Housing: This concurrent resolution proposes an amendment to the New Jersey Constitution that would require the Legislature to adopt legislation defining what constitutes “exclusionary zoning” under New Jersey law.  Status: Referred to Assembly Housing and Local Government Committee on Sep. 22, 2008; no further action.

SCR113 – Authority for Legislature to Define Limits of Zoning Authority to Bar Exclusionary Zoning: This concurrent resolution proposes an amendment to the New Jersey Constitutional that would grant the legislature the authority to enact laws delineating what municipal land use actions are outside the scope of governmental authority or the “police power.”  The resolution’s proposed ballot statement suggests that this bill is targeted towards curbing exclusionary zoning.  Status: Referred to Senate Community and Urban Affairs Committee on June 23, 2008; no further action.

A3159 – Defining Exclusionary Zoning: This bill amends the “Fair Housing Act,” for the purpose of setting a benchmark for municipalities to follow in meeting the constitutional obligation of providing a realistic opportunity for a fair share of its region’s present and prospective needs for housing for low and moderate income families.  The bill sets forth the following practices that would be deemed outside of the legitimate zoning powers constitutionally delegated to municipalities to regulate land uses: (1)  Zoning in all residential areas within the municipality at a level of density such that a reasonable presumption may be made that no affordable housing units could be produced within such areas at those densities;  (2)  Zoning in all residential areas within the municipality at a minimum lot size such that a reasonable presumption may be made that no affordable housing units could be produced within such areas; (3)  Zoning which prohibits or inhibits the production of multi-family housing;  (4) Zoning which provides for an unreasonably high allocation of commercial or industrial use compared to residential use; (5) Withholding approval of variances concerning housing projects which will contain affordable units solely on the basis of dimensional restrictions, such as set-back, height or frontage requirements, when strict compliance with those requirements is not reasonable or necessary; or (6) Withholding of compensatory zoning benefits, such as density bonuses, from developers constructing inclusionary developments or affordable housing within the municipality. Status: Referred to Senate Community and Urban Affairs Committee on Jun. 23, 2008; no further action.

Implications for the Real Estate Industry:
It is generally desirable to have the legislature craft a clear definition of “exclusionary” zoning.  Doing so could simplify the analysis and process for challenging a zoning ordinance as exclusionary.  It could also result in local government adopting less exclusionary policies and consequentially open up greater opportunities to build affordable housing in New Jersey.

S319 – Use of Excess Affordable Housing Fund for Infrastructure Improvements: This bill would allow a municipality to use any “excess” fee is collects for purposes of funding affordable housing to fund road improvements, drainage improvements, and other general improvements in the municipality relating to development impacts.  “Excess” fees are defined as those that are not needed for purposes of meeting that municipality’s fair share obligations, as determined by the Council on Affordable Housing.  Status: Referred to Senate Community and Urban Affairs Committee on Jan. 8, 2008; no further action.

Implications for the Real Estate Industry:
While S319 would allow communities to reallocate funds intended for direct use in the production of more affordable housing, using these funds for purposes of infrastructure development could also be beneficial for the housing industry as greater infrastructure capacity will make communities more willing to accept new development and is likely to seek exactions from developers for infrastructure development.

A1453 – Affordable Housing in the Highlands Region: This bill would amend the Highlands Act to provide that any reduction made by COAH to the fair share obligation of a municipality located in the Highlands preservation not be transferred to any municipality.  This bill would also require that adjustment to a municipality’s fair share obligation where the calculation of such obligation was made using assumptions that are contrary to the regional master plan adopted by the Highlands Water Protection and Planning Council.  Status: Referred to Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.


Sustainable Development

A3740Limits on Municipal Regulation of Small Wind Energy Systems: This bill would prohibit municipalities from adopting ordinances that unreasonably limit the installation and operation of small wind energy systems or unreasonably hinder the performance of such installations.  Under the proposed bill, the state would also promulgate a model municipal ordinance.  Status: Referred to Assembly Housing and Local Government Committee on Feb. 9, 2009.

S2353 – Solar Roof Installation Warranty Program: This bill establishes a “Solar Roof Installation Warranty Program” to provide warranties to building owners who wish to install solar power equipment on their building roofs but are unable to obtain warranty coverage against damage to roofs that could result from such installations.  To participate, building owners would be required to pay an application fee of $1,000 and demonstrate that their solar power equipment installer does not offer a comprehensive 20-year warranty and that the installation of such equipment is not covered by any other insurance policy.  The maximum amount that could be paid out under the warranty would be capped at $50,000.   The bill appropriates $5 million from the “Global Warming Solutions Fund” to fund the program and provides for refunding mechanisms.  Status: Referred to Senate Economic Growth Committee on Nov. 24, 2008.

A3701 – Requires All New State Buildings to Have Solar or Geothermal Energy Systems, Where “Feasible”: This bill would require newly-constructed State buildings to include, where “feasible,” the installation of renewable energy systems designed to provide all or a portion of the  building’s heating, cooling, or general electrical energy needs from solar and geothermal energy sources.  Status: Referred to Assembly State Government Committee on Feb. 5, 2009; no further action.

A3616 Preferences for Purchase of New Jersey Manufactured Solar Panels and Wind Turbines for State Projects and State-Funded Projects: This bill would require contracts for purchases of solar panels and wind turbines funded by state appropriations to go to the lowest bidder that has its principal place of business in New Jersey or uses a majority of parts manufactured or produced in the State in assembly of the final product, unless the head of the state department purchasing the equipment determines that it would be inconsistent with the public interest, the cost would be unreasonable, or the products or materials are not produced or manufactured in the State in commercial quantities and of a satisfactory quality.  Status: Referred to Assembly State Government Committee on Jan. 13, 2009; Referred to Assembly Appropriations Committee on Jan. 26, 2009

A1626 – Affordable Housing to be Built to Green Building Standards: This bill would require newly constructed housing that receives credit under the Fair Housing Act to be constructed in accordance with a green building code to be promulgated by the Commissioner of Community Affairs.  Status: Referred to Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.

A3062 – Wind, Solar or Photovoltaic Energy Facilities are Inherently Beneficial Uses: This bill defines the meaning of “inherently beneficial use” for purposes of a zoning use variance as a “use which is universally considered of value to the community because it fundamentally serves the public good and promotes the general welfare.”  This bill would also specifically define a hospital, school, child care center, group home, or facility generating electricity from wind, solar, or photovoltaic energy as an “inherently beneficial use.”  While not entitling a proposal involving an “inherently beneficial use” to a variance, uses defined as such would have a presumption in their favor when seeking a variance on the grounds that the purposes of the Zoning Act or the Educational Facilities Construction and Financing Act would be advanced by the variance to a degree that would substantially outweigh any detriment caused.  Status: Referred to Assembly Telecommunications and Utilities Committee on June 23, 2008; no further action.

Eminent Domain

S2365 – Requires Municipal Referendum Prior to Condemnation of Private Property When Sale or Transfer to Private Entity for Economic Development Purposes Is Contemplated: This bill would require voter approval before any property can be taken pursuant to a redevelopment plan for the purpose of being sold or transferred to a private entity for economic development purposes.  Status: Referred to Senate Community and Urban Affairs Committee on Nov. 24, 2008.

ACR59 – Eminent Domain Only for Essential Public Purposes: This concurrent resolution would amend the New Jersey constitution to limit the use of eminent domain to only the acquisition of property by public corporations for “essential public purposes.” Under the bill, private corporations would no longer be authorized to use eminent domain and “essential public purposes” would be limited to the establishment of utility and transportation corridors, educational facilities, airports, correctional facilities, solid waste handling facilities, landfills, sewage treatment facilities, storm water management facilities, in-patient health facilities, and recreational facilities.   This amendment would specifically prohibit government from acquiring private property for the redevelopment of blighted property, although it would permit government to continue to grant tax exemptions to promote such redevelopment.  Status: Referred to Assembly Commerce and Economic Development Committee on Jan. 8, 2008; no further action.

S79 – No Taking Residential Property by Eminent Domain for Redevelopment or Private Economic Development:  This bill would prevent eminent domain from being used for redevelopment or private economic development to acquire residential property maintained in accordance with applicable housing and construction code standards.  StatusReferred to the Senate Community and Urban Affairs Committee on Jan. 8, 2008; no further action.

S152 – Eminent Domain Compensation: This bill would require additional compensation to be paid to the owners of single-family homes when taken by eminent domain.  This bill would require just compensation to be calculated based on the cost of comparable relocation properties within a 15 mile radius of the property being condemned.  Comparable relocation properties would be properties of a similar lot and house size, with similar improvements, similar natural, governmental, cultural and commercial amenities, and located within a school district having the same or a higher Department of Education district factor group designation.  Status: Referred to the Senate Community and Urban Affairs Committee on Jan. 8, 2008; no further action.

S154 – Moratorium on Eminent Domain Use: This bill would impose a limited moratorium on certain eminent domain actions for two years during which eminent domain could only be used for direct public use.  This bill would also establish a commission to study eminent domain abuses and recommend legislation to reform its use.  Status: Referred to the Senate Community and Urban Affairs Committee on Jan. 8, 2008; no further action.

NAR’s Policy Position. Generally, NAR takes the position that when government exercises eminent domain power it should do so only when necessary to materially advance a real and substantial public use and should demonstrate that by means of objective evidence.  Where eminent domain is exercised, “just compensation” should include not only the value of the property condemned, but also all other reasonable and necessary costs generated by the condemnation (e.g., costs of legal counsel, temporary housing, and lost business revenue).

Conservation and Open Space Preservation

S1816Authorizes Counties and Municipalities to Acquire Real Property, and to Resell or Lease it with Agricultural Deed Restrictions Attached:  This bill would authorize a county or municipality to acquire real property in fee simple for farmland preservation purposes and then resell or lease the property with an agricultural deed restriction.  Status: Passed by the Senate (40-0) on Nov. 24, 2008; Received in the Assembly without Reference, 2nd Reading on Dec. 8, 2008.

A476 – Governmental Right of First Refusal Regarding Conveyances of Watershed Land, Land Zoned for Recreation and Open Space Purposes, and Large Tracts of Land:  This bill would grant rights of first refusal to purchase, exchange, or lease three categories of property to the Commissioner of Environmental Protection, counties and municipalities.  The first category would be “watershed land,” which is defined as land owned by a county, municipality, or utility authority that is located above or upstream from a terminal water supply reservoir or surface water intake.  The second category would be land zoned by a municipality for recreation, conservation, open space, agriculture, wetland, woodland, or parkland, or for any similar purpose.  The third category would be all contiguous parcels of land owned by a single person or entity that exceed twenty-five acres in a county of the first class or fifty acres in a county of the second class.  The Commissioner of Environmental Protection would have a thirty day period to exercise the option after receiving notice from the property owner.  This would be followed by a thirty day period for the county to exercise its option, and then a thirty day period for any municipality to exercise its option.  Conveyances that fail to comply with the bill’s notice requirements would be voidable.  Status: Referred to Assembly Agriculture and Natural Resources Committee Jan. 8, 2008; no further action.

Implications for the Real Estate Industry:

The rights of first refusal created by A476 would have the potential of delaying the conveyance of land between private parties for up to ninety days.  Where these rights are not exercised, it may still frustrate the purposes of buyers and sellers who may see interest rates move or other circumstances change over a ninety day period.  Furthermore, potential buyers of property affected by these rights might be deterred from investing in due diligence on a property if they cannot be sure of acquiring that property without governmental interference. These rights might also frustrate transactions between related parties or business associates by requiring disclosure of the terms of those deals to state and local government and giving government the ability to frustrate those transactions by exercising its rights of first refusal.

A1665Exemption of Public Safety Buildings from “Highlands Water Protection and Planning Act”: This bill would exempt the construction, expansion or renovation of buildings or other structures used by police departments, fire departments, and volunteer first aid, emergency, ambulance or rescue squads from the “Highlands Water Protection and Planning Act.”  Status: Referred to the Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.

A1689 – State Agencies May Not Force Municipalities to Comply With Highlands Regional Master Plan: This bill would prohibit any State department or agency from requiring, as a condition to any approval or decision concerning the municipality or any person in the municipality, that a municipality in the Highlands Region planning area revise its master plan and regulations to conform to the goals, requirements and provisions of the Highlands regional master plan.  Status: Referred to the Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.

Other Smart Growth Related Bills

A3632Smart Housing Incentives Act: This bill would adopt incentives to encourage municipalities to make zoning changes that will increase the supply of higher-density, mixed-income housing near jobs and public transportation hubs.  Inspired by Massachusetts’s Chapter 40R program, this bill would offer municipalities financial payments for each new housing units zoned ($1,000) and constructed ($4,000) in a “smart housing zone,” as well as priority preferences for other state funding programs.  “Smart housing zones” are defined according to proximity to public transit facilities, existing high-density mixed-used centers, and brownfield or greyfield sites.  In order to qualify for the incentive  payments, a municipality would have to increase the allowed density in a “smart housing zone” to a sufficient degree above what is currently allowed (> 25%%) and to a level greater than or equal to certain thresholds set forth in the bill (e.g. at least 50 dwelling units per acre in central business districts of urban centers).  Incentive payments would be limited to 500 units per municipality over a five-year period.  The bill would require developers of market-rate housing units in smart housing zones to pay a fee of $4,000 for every “net new zoned”  middle income or market rate unit before a certificate of occupancy can be issued for any such unit.  “Net new zoned units” are defined under the bill as the net increase in the number of permitted units under the smart housing zoning.  These fees would help fund the incentive payments to municipalities.  Under the bill, at least half of the amount of incentive payments received would be required to be used for “green investment,” which is defined as “any municipal expenditure for the purpose of protecting or enhancing the natural environment of the municipality, including but not limited to protection of open space through acquisition, remediation, restoration, or improvement; improvements to parks and other public open spaces; and actions to reduce greenhouse gas emissions through energy efficiency, renewable energy, or other programs that result in a measurable reduction in the emission of greenhouse gases or a measurable reduction in energy demand.”  The remainder of the funds could be used for services and capital expenditures reasonably related to additional residents.  Status: Referred to Assembly Housing and Local Government Committee on Jan. 13, 2009.

Implications for the Real Estate Industry:
A3632 would offer incentives to local governments to allow higher-density development in locations where such development would be more appropriate.  These measures may result in the creation of new housing development that would not otherwise be permitted.  The bill could be improved, however, if the requirement for the $4,000 impact fee was removed and replaced with a more flexible mechanism, as these fees may not be appropriate in some circumstances.

A3696 – Expanded Eligibility Under “Urban Transit Hub Tax Credit Act”: This bill would make the City of Bayonne eligible to receive funding under the “Urban Transit Hub Tax Credit Act” (UTHTCA), which was enacted in January 2008 as a mechanism to catalyze economic development in urban transit hubs.  The current definition of an “eligible municipality” does not encompass Bayonne.  Status: Referred to Assembly Commerce and Economic Development Committee on Feb. 5, 2009; no further action.

A2623Extension of Eligibility To Participate in the Neighborhood Revitalization Tax Credit Program: This bill amends the “Neighborhood Revitalization State Tax Credit Act,” to extend program eligibility to areas that are (a) adjacent to neighborhoods that are currently qualified to participate in the program and (b) share similar socioeconomics characteristics with such eligible neighborhood.  The Neighborhood Revitalization Tax Credit Program is designed to foster the revitalization of areas of New Jersey’s distressed cities by offering business entities that invest in these areas a 100% tax credit against various State taxes.  Status: Passed by the Assembly (68-10-0) on Nov. 17, 2008; Received in the Senate, Referred to Senate Community and Urban Affairs Committee on Nov. 24, 2008.

A3462 – Qualifications for Zoning Enforcement Officers: This bill would establish a certification program for the position of zoning enforcement officer and establish State oversight over zoning enforcement officers.  Under the bill, a person could not be appointed, reappointed, or continue to serve as a zoning enforcement officer, unless that person has been issued a zoning enforcement officer certificate by the Department of Community Affairs.  The bill would empower the commissioner of the Department of Community Affairs to revoke or suspend a zoning enforcement officer, after due notice and a proper hearing, if such zoning enforcement officer engages in dishonest practices, or willful or intentional failure, neglect or refusal to comply with the duties of the zoning enforcement officer under New Jersey law, or for other good cause.  Status: Referred to Assembly Housing and Local Government Committee on Nov. 17, 2008.

A3707 – Study And Design Bus Rapid Transit Demonstration Projects: This bill would require the New Jersey Transit Corporation to study and design bus rapid transit demonstration projects that would work in conjunction with existing light rail and rail services to serve residents throughout the state and report back to the Governor and Legislature within two years with its recommendations regarding bus rapid transit projects.  Status: Referred to Assembly Transportation, Public Works and Independent Authorities Committee on Feb. 5, 2009; no further action.

A1633 – Transit Villages Act: This bill seeks to promote pedestrian friendly, mixed-use development near current and planned transit stops.  Under the bill, municipalities would be authorized to adopt a transit village element to their master plan and adopt zoning to implement such a plan.  Participating municipalities would then submit these plans to the Office of Smart Growth and Commissioner of Transportation for an approval that would make private development in the area designated as a transit village eligible for a 4% tax credit and other development incentives, and allow the municipality to utilize bond financing programs and access state funding streams to fund infrastructure or subsidize development.  Status: Referred to Assembly Transportation, Public Works and Independent Authorities Committee on Jan. 8, 2008.

A440 – Abolition of Time of Decision Rule: This bill would require that development applications submitted to municipalities be reviewed according to the regulations in effect on the date of application rather than on the date of decision, unless the interim modifications to the regulations are necessary for the protection of health and public safety.  As such, it would override the “time of decision rule” currently in effect.  Status: Referred to Assembly Housing and Local Government Committee on Jan. 8, 2008; no further action.

Implications for the Real Estate Industry:

A440 would provide greater certainty and protections to developers against the risk of regulatory changes intervening to stop planned development.  While adequate safeguards would be in place to protect against development that would be a nuisance to a community, developers would be protected against reactive and capricious modification of zoning ordinances.
A796 – Timed-Growth Ordinances: This bill would enable municipalities to adopt “timed-growth ordinances” to pace development according to infrastructure capacity.  Before adopting a timed-growth ordinance, a municipality would have to adopt a master plan and capital improvement plan. Time-growth ordinances would also have to include geographic delineation of districts where development would be restricted, the infrastructure required to upgrade such districts, and the quantity of development allowed over time in such districts.  Municipalities would have to give developers the option to accelerate development by paying preset fees to cover associated infrastructure improvements.  Pending plans to develop affordable housing would not be affected by a timed-growth ordinance, nor would the development of one or two family homes on a single lot.  Status: Referred to Assembly Housing and Local Government Committee on Jan. 8, 2008; no further action.

Implications for the Real Estate Industry:

While growth phasing programs such as the ones that would be enabled by this legislation can help communities ensure that development does not run ahead of necessary infrastructure improvements and direct growth into areas most appropriately suited for new development, these programs can also result in increased land prices that have an exclusionary effect and force development to “leap frog” into surrounding communities where infrastructure capacity may be even less suited for new development.
A1544 – Authorize Conditioning of Development Approval on Levels of Service in Transportation  Infrastructure: This bill would authorize municipalities to adopt a circulation plan sub-element in the municipal master plan.  Based on that circulation plan sub-element, a municipality that determines that its transportation system would be inadequate to accommodate additional development would be authorized to impose a development moratorium and deny further development applications or defer consideration of those applications according to specified standards.  Status: Referred to Assembly Housing and Local Government Committee on Jan. 8, 2008.

Implications for the Real Estate Industry:

While communities can legitimately consider the capacity of transportation systems in decisions as to whether to allow additional development, they should be required to work towards resolving those inadequacies.  A policy as would be established by A1544 of allowing municipalities to impose moratoria on development on the basis of their own judgment about the adequacy of transportation systems could easily be exploited by communities as a means of preventing all growth.  Such a policy of no growth is not sustainable in the long-term and would likely lead to development being pushed further into the countryside away from existing infrastructure and jobs.

A791 – Historic Property Reinvestment Act: This bill establishes tax credits for homeowners and businesses for the cost of rehabilitating historic properties.  Under the proposed bill, homeowners would be able to take credits for 25% of the outlay in rehabilitating a historic property where rehabilitation expenses equal or exceed 50% of the equalized assessed value of the structure.  Homeowner credits would be capped at $25,000 per property during a ten-year period and homeowners seeking to utilize them could spend no more than 50% of the cost of rehabilitation on the interior and would have to occupy the home as a principal residence for twelve consecutive months.  Businesses that spend more on rehabilitation expenses than the adjusted basis of the structure for federal income tax purposes would also be able to deduct 25% of their outlays.  The bill provides that taxpayers may sell unused credits by means of a program to be established by the State.  To qualify for these credits, the subject property must be listed on the National Register of Historic Places or the New Jersey Register of Historic Places, designated as an historic resource of significance to the Pinelands, or by a municipal government as approved by the State Historic Preservation Officer.  Properties not individually listed under the foregoing registers but located in an identified historic district would also be eligible for the tax credit if certified as contributing to the district’s historic significance.  The bill provides for annual limits on the cumulative amount of tax credits (e.g. $15 million in 2008) and provides that 33% of the tax credits approved in each year must be granted to homeowners.  Status: Referred to Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.

A1552 – Incentives to Establish Transfer of Development Rights (TDR) Programs: This bill would provide incentives for municipalities to establish receiving zones for TDR programs.  The incentives include allowing municipalities that establish such receiving zones to impose impact fees on TDR development of up to $30,000 per dwelling unit where sending zones are in the Highlands Region or the Pinelands Area, or $15,000 per dwelling unit when the sending zones are located elsewhere.  Municipalities that establish receiving zones would also be entitled to priority status for State capital or infrastructure programs and other financial incentives.  Status: Referred to Assembly Environment and Solid Waste Committee on Jan. 8, 2008; no further action.

Implications for the Real Estate Industry:
While a well-designed TDR program can help a community preserve valuable environmental resources and help compensate property owners for the lost development value that results from the downzoning in a sending zone, TDR programs are quite complicated and expensive to administer.

Local Activity:

Clinton Township: Conservation Purchase. Clinton Township recently agreed to buy a 292-acre tract of land for preservation from a developer in in Hunterdon County.  Residents in support of the purchase saw it as an opportunity to protect the county’s rural character.  Builders and other residents opposed the purchase on the ground that the land purchased could have provided up to 1,000 houses for commuters near Route 78 and increased tax revenues.  After years of legal battles, the town agreed to buy the property from Pulte Homes for $7.1 million. Of the 292 acres, about 260 will remain undeveloped as preservation land.  The remaining 30 plus acres of street frontage will be available for possible municipal use to satisfy affordable housing needs.  (Source:  Hunterdon County Democrat, “Clinton Township agrees to preserve swath of land in danger of development,” 01/25/2009).

Cranford: Conservation Plan. Using a Smart Growth Planning Assistance grant, the Cranford Environmental Commission prepared a 26-page Conservation Plan element to be include in the municipal Master Plan that is currently in draft form.  The Conservation Plan will address existing natural resources in Cranford and establish goals and objectives for the preservation, conservation and use of Cranford’s resources. The Conservation Plan will be presented as part of the Master Plan in early 2009.  (Source:  NJ.com, “Cranford Environmental Commission releases report for 2008,” 01/29/2009).

Hammonton.  Funds for a Comprehensive Plan. In 2007, Hammonton received a $50,000 Smart Growth Grant from the New Jersey Department of Community Affairs.  It recently received an additional $50,000 in the form of a New Jersey Department of Transportation Mobility and Community Form Grant.  Main Street Hammonton Executive Director Cassie Iacovelli says those funds will be used in an effort to create a comprehensive plan, with MainStreet Hammonton overseeing the process.  Some of the funds will be used to hire consulting services for transportation planning, urban design and land-use planning, which Iacovelli hopes will lead to the town’s adoption of a form-based code for downtown Hammonton.  (Source:  The Hammonton News, “Grant used to help map town’s future,” 01/28/2009).

Spotswood:  Public Input Sought for Vision Plan. Spotswood officials held a community meeting in February to gain public input for the town’s Community Vision Plan.  When completed, the plan will serve as a guide for future development.  The plan will be funded by a state Department of Community Affairs grant and has the full support of Mayor Thomas Barlow.  Further community meetings are planned for spring of 2009.  (Source:  The Sentinel, “Public invited to help plan for future of Spotswood,” 01/22/2009).
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