Attorneys for the New Jersey Builders Association and the New Jersey Business and Industry Association have filed a notice of appeal to challenge a set of land use rules finalized on Gov. Phil Murphy’s last day.
They feel the rules will saddle towns, residents and developers throughout the state with added costs and regulatory burdens.
Both groups emphasized that the filing with the state’s Appellate Division of Superior Court is not a challenge against the current Sherrill administration, but against the state Department of Environmental Protection Resilient Environment and Landscape (REAL) Rules under Murphy.
The groups also added that they fully support Sherrill’s regulatory reform agenda and the prioritization of making housing more affordable — saying the last-minute Murphy-era rule goes directly against both missions.
Among the many requirements of the 1,000-plus-page rule was a provision that new homes constructed in expanded flood-risk areas be raised 4 feet higher than the current FEMA-base flood elevations. The rules also will apply to homes undergoing renovations that add 50% more than the home’s value.
Potential arguments on the appeal include:
- NJDEP’s adoption of the NJPACT REAL Rules violates the separation-of-powers and non-delegation principles of the New Jersey constitution;
- NJDEP exceeded its statutory authority in adopting the NJPACT REAL Rules;
- The NJPACT REAL Rules are arbitrary, capricious and unreasonable;
- NJDEP failed to comply with the requirements of the Administrative Procedure Act;
- The NJPACT REAL Rules effect a taking of private property without just compensation in violation of the U.S. and N.J. constitutions;
- The NJPACT REAL Rules violate the due process and equal protection guarantees of the U.S. and N.J. constitutions;
- The NJPACT REAL Rules unlawfully conflict with other applicable federal and state statutes and regulatory schemes governing housing, land use and development.
NJBIA Deputy Chief Government Affairs Officer Ray Cantor broke it down this way. “In addition to this being the next strike against affordability in New Jersey, the rule was drafted without meaningful stakeholder collaboration or any credible economic analysis,” he said. “It was fundamentally flawed, and its provisions were too numerous and complicated to be merged into one regulatory framework.”
Cantor noted the timing, too.
“Adding insult to injury, the Murphy administration left New Jersey on its very last day with a set of rules that will greatly increase the costs of housing in coastal and river communities, increase flood insurance costs, or require flood insurance in areas that have never flooded and may never flood,” he said. “Property values will also be lowered in some cases — all while impacting the state’s affordable housing goals.”
Builders Association CEO Jeff Kolakowski obviously agreed. “NJBA strongly supports climate resilience and environmental protection, but those goals must be pursued in a way that is legally sound, economically responsible and compatible with New Jersey’s urgent need for housing,” he said. “The 1,000-plus page REAL rule goes far beyond sea level rise resilience and is laden with DEP wish list items that do little to nothing to improve resiliency. They are inconsistent with the state’s economic growth strategy, redevelopment goals, state plan and overall housing strategy.”
In addition to strong opposition from NJBIA and NJBA over the past 20 months, the PACT rules were also opposed by more than 130 mayors, multiple municipal and county associations, and the New Jersey Business Coalition, none of whom are part of the legal filing. The challenge also appears to have some support from a key legislator. State Senate President Nick Scutari has sponsored a bipartisan resolution, stating the DEP’s Protecting Against Climate Threats (PACT) rules are inconsistent with legislative intent.
While it will have no bearing on the decision, Kolakowski noted the REAL Rules go against the goals of the new administration.
“Gov. Sherrill has made affordability, ‘Getting to Yes’ permitting, and government efficiency top priorities,” he said. “Her administration should not have to inherit the unintended consequences of a rushed rule adopted in the final few hours of the previous administration. The prescriptive and stringent standards of the rule ultimately hurt our state’s ability to adapt to climate change as communities will suffer from a lack of investment and flexibility in how to meet this challenge.
“Further, this rule was adopted at the worst possible time — right in the middle of implementing New Jersey’s landmark Fourth Round affordable housing framework. Changing the regulatory rules of the game now will create confusion for municipalities, developers, and the courts, and risks derailing the real progress that has finally been made toward addressing our state’s housing shortage,” he said.
NJBA and NJBIA are represented by the firm of Giordano, Halleran & Ciesla.
