By: Adam J. Faiella and Matthew P. Posada
Three recently introduced bills in the New Jersey State Legislature could hint at an emerging policy shift away from the state’s time-honored respect for “home rule” and towards a more regional approach to land use planning. While the proposed legislation does not eliminate a local municipality’s jurisdiction to consider certain land use applications, the introduction of additional regional planning approaches could lead to a general erosion of home rule. Specifically, the introduction of Senate Bill 3910 would create the “Palisades Cliffs Protection and Planning Act,” aimed at protecting the Gold Coast from high-rise development. Similarly, Senate Bill 3688 would require certain warehouse development projects to seek approval from County planning boards or the State Planning Commission prior to receiving local land use approvals. Those warehouse development opportunities (and any other development opportunities) would diminish further by the enactment of proposed Assembly Bill 5793, which would prohibit municipalities from designating farmland as an area in need of redevelopment or rehabilitation area.
S3688 would provide an opportunity for adjacent towns to object to certain “large warehouse” development projects outside of their jurisdiction. The first draft of the bill required “retail warehousing” projects of “intermunicipal concern” to be considered by a joint intermunicipal board. The joint intermunicipal board would be composed of members of the host municipality and adjacent towns, and would be overseen by the Department of Community Affairs’ newly created “Intermunicipal Impact Advisory Board.” More recently, however, the Senate Budget and Appropriations Committee proposed a more stringent amendment to the bill, removing the use of a joint intermunicipal board and substituting the County planning board or State Planning Commission. Moreover, the amendment expanded the triggering term from “retail warehouse” to “large warehouse.”
A “large warehouse” is vaguely defined as “a large facility that meets the guideline requirements as promulgated by the State Planning Commission, and is designed predominately for receiving and storing goods and materials before they are sold, used, or redistributed.” The committee amendment would require the County planning board or State Planning Commission to conduct a regional impact hearing and render a decision to allow or disallow a host municipality to consider the large warehouse land use application. The administrative officer of a host municipality would be tasked with delivering regional impact notices to clerks of adjoining municipalities prior to the mandated regional impact hearing, as well as providing a regional economic and land use impact report at the developer’s expense. In addition to the added time and expense of another approval that would be imposed by S3688, the vagueness of the definition of what constitutes a “large warehouse” would likely cast a significant cloud of uncertainty over development in New Jersey and could lead to a liberal interpretation of affected warehouses and possible expansion of the affected projects, through future legislation, to include many other types of commercial projects.
Legislators in the General Assembly have also proposed a bill to further usurp home rule. A5793 would amend the Local Redevelopment and Housing Law, N.J.S.A. 40:12A-1, et seq. to specify that farmland cannot be designated as a rehabilitation area or an area in need of redevelopment. The bill would change the definitions of redevelopment and rehabilitation so that any farmland actively devoted to agricultural or horticultural use pursuant to the “Farmland Assessment Act of 1964” could not be used for any development efforts through the LRHL vehicle including warehousing projects. The bill would disable developers indefinitely from redeveloping farmland to satisfy not only the growing demand for e-commerce, but all commercial, industrial, and residential needs. In essence, A5793 would reduce a municipality’s ability to control the responsible development of farmland, even if universally supported by residents, by removing those powers afforded to local governments under the Local Redevelopment and Housing Law. Specifically, a municipality would no longer have the discretion to revitalize farmland regardless of its state of disrepair or underutilization, or provide incentives through payments in lieu of taxes (PILOTs), or issue redevelopment area bonds (RABs), or exercise the powers of condemnation, or create local jobs to spur the economy.
New Jersey land use planning and development generally follows “home rule,” which is the belief that every municipality has a right to govern itself through its own planning board and zoning board of adjustment (or, for some municipalities, a combined land use board). These three bills do not completely eliminate those municipal powers under home rule. Instead, they would have the effect of limiting the stock of land available for development and, in the case of S3910 and S 3688, would add an extra layer of approvals, similar to how certain projects already require approvals from a County planning board and/or a regional body such as the Highlands Council or Pinelands Commission.
The primary argument in favor of home rule is that local residents with the most knowledge of their municipality make the decisions affecting development within that municipality. Indeed, New Jersey courts have held that planning boards and zoning boards of adjustment are granted wide latitude in the exercise of their duties due to their “peculiar knowledge of local conditions,” and that “local officials are thoroughly familiar with their communities’ characteristics and interests and are best suited to make judgments concerning local zoning.” Another rationale for home rule is that zoning and land use decisions primarily affect the municipality in which the development is located.
In contrast, the case for regional planning rests on the notion that development in one municipality necessarily affects other, surrounding municipalities. In fact, some policymakers have noted that those development projects on the border of an adjoining municipality could actually have a greater impact on the adjoining municipality than the municipality in which the development is located. To be sure, the cross-municipality impact of a development project is the main reason behind each of the three pending bills, S3688, S3910, and A5793.
Instead of creating a new layer of land use approvals, S3688 and S3910 could have followed the example of the New Jersey Sports and Exposition Authority (and its predecessor, the New Jersey Meadowlands Council). This state agency is an example of regional planning that replaces home rule. On the positive side, such regional planning takes a comprehensive approach to zoning and land use in an area that extends beyond municipal borders. When done correctly, regional planning can make development more efficient in multiple respects, including traffic circulation and storm water management, especially if the development spans and/or impacts more than one border. Also, regional planning requires applicants to use a uniform set of regulations, whereas each municipality under home rule has its own checklist, application form, and ordinance with different zoning standards. In addition, the reviewing professionals are paid by the state in contrast to municipal land use boards which hire their own professionals, with the developer/applicant being required to reimburse the municipality for each board’s planner, engineer, traffic engineer, landscape architect, and/or attorney in addition to the expense of the developer’s own set of professionals. On the negative side, a regional planning process devoid of any requirement to obtain local approvals strips power away from the host municipality that may support or oppose a proposed development within its borders, and usurps the opportunity to more directly protect local citizens who may be affected the most on a daily basis.
In effect, S3688 and S3910, as proposed, preserve the concept of home rule while injecting a regional review feature into the land use process - in other words, an extra layer of approvals instead of a unitary land use planning agency such as the New Jersey Sports and Exposition Authority. This two-pronged approach is very inefficient; it would no doubt add time and costs to development approvals when New Jersey is already more costly and timely for development than many other states. Developers would also no longer have the same protections afforded by the time limitations imposed on land use boards pursuant to the Municipal Land Use Law. The added time and costs will potentially make projects more difficult to finance, halt some developments, impede the effort to meet affordable housing goals and attain other community benefits, and increase commercial and residential rents for those projects that can somehow survive the onslaught and still get constructed. Moreover, these bills would create financial constraints for municipalities as the additional requirements would delay or even eliminate anticipated tax ratables at a time when many municipalities are struggling with their budgets due to the pandemic, escalating pension obligations, weakened hotel, office, and retail real estate sectors, and the like.
The New Jersey Legislature will need to decide whether the state should move towards a more regional planning approach in addition to the municipal land use process, thereby diluting home rule, or in lieu of the local land use process, thereby eliminating home rule’s stronghold on land use and development. Either way, these three bills, if enacted, could be the first steps towards the erosion of home rule.