Highlands Act Withstands Another Round of Legal Attacks

by: Anthony F. Della Pelle
26 Aug 2011

New Jersey appellate courts, in a series of published and unpublished opinions, recently addressed a variety of issues raised by the adoption of the Highlands Regional Master Plan (RMP) as required by the Highlands Water Protection and Planning Act (the Highlands Act), N.J.S.A. 13:20-1 to -35.  The Council, on July 17, 2008, adopted the RMP for the Highlands Region, which became effective on September 5, 2008, upon its acceptance by the Governor.  Generally, the opinions affirmed the validity of the Highlands RMP, held that the Highlands Act Transfer Development Rights Program did not have to conform with the State Transfer of Development Rights Act (State TDR Act), N.J.S.A. 40:55D-137 to -163, and explained the applicability of the Fair Housing Act (FHA), N.J.S.A. 52:27D-301 to -329.19, and COAH obligations, with the mandate to preserve land established in the Highlands Act following Governor Corzine’s adoption of Executive Order 114 in September 2008.

Stated simply, the RMP acts an overlay that is only enforceable when a municipality adopts the RMP’s standards into its own land use ordinances.  A municipality is not required to conform its master plan to the RMP with respect to the parts of the municipality in the planning area, but may elect to do so voluntarily per N.J.S.A. 13:20-14(f) and N.J.S.A. 13:20-15(a).  Thus, a property is not subject to a constraint on development as a result of its designation in the RMP unless the municipality has imposed some restriction upon the property through its zoning ordinance, and not as a direct result of the Council’s adoption of the RMP, and any challenge must first be raised against the validity of the municipality’s zoning ordinance.

TDR programs allow the transfer of development rights from environmentally sensitive areas to more readily-developable areas.  These TDR programs permit “a public agency to use market forces to encourage the transfer of development potential from areas the agency wants to preserve (sending zones) to areas that are more appropriate for growth (receiving zones).” OFP, L.L.C. v. State, 395 N.J. Super. 571, 588-89 (App. Div. 2007), aff’d o.b., 197 N.J. 418 (2008).  Landowners in sending zones can obtain compensation for lost development potential from purchasers who buy TDR credits in the form of TDR credits for restricting development on their properties. Purchasers are then entitled to build in a receiving zone at a greater density than permitted by the underlying zoning.

The Appellate Division’s opinion in In re Highlands Master Plan, __ N.J. Super. __ (App. Div. August 15, 2011), may be found here.

The Appellate Division’s opinion in In re Highlands Master Plan, Executive Order 114, __ N.J. Super. __ (App. Div. August 15, 2011), may be found here.

The Appellate Division’s opinion in Bocina Homes Corp. v. Jon Corzine, A-1046-08 (App. Div. August 15, 2011), may be found here.

The Appellate Division’s opinion in Toll Brothers, Inc, v. Jon Corzine, A-0923-08 (App. Div. August 15, 2011), may be found here.

The Appellate Division’s opinion in In re Adoption of Module 3 Housing Element and Fair Share Plan Instructions by the Executive Director of the Highlands Council, A-6430-08 (App. Div. August 15, 2011), may be found here.

For more discussion on the Highlands Act, please see the following blog posts:

United States Supreme Court Declines to Hear New Jersey Highlands Act Case

New Jersey Assembly Passes Bill Creating Receiving Zones for Development Rights Under Highlands Act

Highlands Act Upheld

NJ Supreme Court upholds Highlands Act

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

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