Thursday, October 8, 2009

Hate development surprises? Read this.

"Does your project development due diligence checklist include a review of resolutions passed by the Council on Affordable Housing ("COAH")? If not, your project might be at risk, and you may not discover it until you are ready to start construction."

That's the alarm-bell opening paragraph in a bulletin sent by the Gibbons law firm to clients in New Jersey--especially those who have projects in the state's Highlands region.

The alert, authored by attorneys Douglas J. Janacek and Michael Miceli, both of the firm's Real Property & Environment practice, goes on to explain:

"Last year, Governor Corzine signed an Executive Order, which required the Highlands Council to cooperate with COAH, the Department of Environmental Protection, and the Department of Community Affairs to, among other things, ensure that municipalities in the Highlands maximize affordable housing opportunities while preserving critical environmental resources, including scarce land, water, and sewer resources, by dedicating those resources on a priority basis to the production of affordable housing.

"In response, the Highlands Council and COAH entered into a Memorandum of Understanding ("MOU") to "develop a cooperative planning process that will enable each agency to carry out their respective" responsibilities. Regarding the preservation of scarce resources, the MOU required COAH to issue a "scarce resource order" for all Highlands municipalities under COAH's jurisdiction.

"Outside the rubric of formal rulemaking (and thus, subject to little if any public scrutiny), COAH adopted a resolution implementing a scarce resource restraint on the 51 Highlands municipalities under its jurisdiction (since then, COAH has lifted the restraint on 12 Highlands municipalities that submitted third round housing element and fair share plans; it extended the deadline to submit for certification for the remaining municipalities, but kept the restraint in place for them). The restraint, which impacts developments in the Planning Area and Preservation Area of the Highlands, reserves scarce resources that may be essential to fulfill a municipality's fair share obligation. It applies to municipal actions associated with development approvals, water allocation, and wastewater allocation.

"What does that mean to you? Essentially, in the affected Highlands municipalities, the restraint becomes an unfulfilled condition precedent to any development approval or construction activity unless the application is exempt or is formally granted a waiver."

Interested in reading more? You'll find the entire IN-SITES newsletter article here.

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