June 19, 2013 | No Comments
Posted by Steven Gouin
On June 17, 2013, the Federal Emergency Management Agency (“FEMA”) released new base flood elevation maps (“BFEs”) – providing much-needed guidance to homeowners still debating how to address flood-related damage suffered during Superstorm Sandy. The new BFEs substantially revise the advisory base flood elevation maps (“ABFEs”) released by FEMA in December 2012. Most importantly, the new BFEs remove thousands of coastal New Jersey homes from FEMA’s dreaded “V” (or “Velocity”) Flood Zone.
The “V”-Zone is otherwise known as the “Coastal High Hazard Area.” These are areas that are subject to high-velocity wave action from storms or seismic sources. According to FEMA, the hazards in “V”-zones include not only inundation by flood waters, but also the impact of waves and waterborne debris and the effects of severe scour and erosion. By contrast, “A”-Zones are flood hazard areas not within a high hazard area. Though both “A” and “V”-Zones risk flooding, the severity of the flood hazard is less in “A”-Zones primarily because high-velocity wave action is either not present or is less significant than in “V”-zones.
Communities, including many in New Jersey, that participate in FEMA’s National Flood Insurance Program (“NFIP”), must regulate three types of building construction in flood hazard areas (including both “A” and “V”-Zones: (1) new construction, (2) substantial improvements to existing buildings, and (3) repairs of substantially damaged buildings. Any building falling in one of these three categories must be elevated above the “base flood elevation” as determined by FEMA. Under the NFIP, the elevation techniques that may be used depend on whether the building is located in the the “A” or “V”-Zone. Read more
June 18, 2013 | No Comments
Posted by Michael Bruno
The NJ State Assembly recently passed the New Jersey Economic Opportunity Act of 2013. This Act merges five economic development incentives into two distinct programs administered by the NJ Economic Development Authority (EDA). By enhancing “the ability of the state to attract and retain businesses,” this new bill facilitates the creation of thousands of new jobs over the next few years.
The five incentives affected by the Economic Opportunity Act are (1) the Business Retention and Relocation Assistance Grant Program, (2) the Business Employment Incentive Program, (3) the Urban Transit Hub Tax Credit Program, (4) the Grow New Jersey Assistance Program (GROWNJ), and (5) the Economic Development and Growth Grant Program (ERGG). More specifically, GROWNJ and ERGG are being expanded to incorporate the benefits of the above programs into a more streamlined process. The Act provides eligibility for these incentives over a greater geographic area within New Jersey and lowers the thresholds for meeting eligibility requirements. These measures allow for increased business capacity and, in effect, business expansion and job creation. For GROWNJ, the bill also contains a “bonus award tax credit” for those businesses seeking to develop in smart growth areas.
For ERGG, the Economic Opportunity Act designates it as the state’s only redeveloper incentive program. The provisions of the Act attempt to close project financing. One very important change to ERGG will be the addition of “tax credits” to developers of qualified residential projects. Under the existing ERGG law residential developments are effectively shut out from the program as residential developments generate little tax revenue. The proposed ERGG amendments will make available tax credits to address this issue. It remains to be seen if the ERGG will have any practical advantage for developers as it comes with the added cost of prevailing wage obligations. It is also unclear what the final version of the Act will look like, as it has been amended many times and still has to go through the Senate before it is passed for the Governor’s signature. Stay tuned.
June 18, 2013 | No Comments
Posted by Michael Bruno
The State of New Jersey Department of Community Affairs (DCA) has announced procedures for contractors interested in participating in the New Jersey Homeowner Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program. A “Request for Interest” (RFI) was released on June 6, 2013, outlining the steps contractors will have to take in order to be admitted to a Qualified Contractor Pool (QCP).
On June 17, 2013, the DCA released a “Request for Qualifications” (RFQ) that allows contractors to submit their names officially for selection; completion of the RFI Response Form will provide contractors with the most immediate access to the RFQ, but non-completion of the RFI Response Form does not exclude contractors from submitting the RFQ. Following the RFQ, contractors must attend a mandatory pre-response meeting (see Page 4 of PDF in above link).
The DCA established this program to assist with recovery efforts following Superstorm Sandy. Under RREM, up to $150,000 will be made available per affected home for rehabilitation, reconstruction, and/or elevation of the home. Funding for RREM is the result of a $1.83 billion allocation from the U.S. Department of Housing and Urban Development. The nine counties eligible for the RREM Program are Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union. The DCA selected URS Corporation as the Program Manager for RREM along with Secondary Managers Shaw Environmental, Inc., and Gilbane Building Company.
These managing contractors will make selections for the QCP based on submissions of interested contractors’ RFQ forms. Contractors must be listed on the QCP in order to participate in the RREM Program. Once the list is complete, the Program Managers will provide an estimated cost of repair for each home and assign a contractor to one or more projects. The assigned contractor “will be working from a program-approved set of home plans” and must abide by all local, state, and federal laws, guidelines, and regulations.
In addition, RREM is a cost-reimbursement program. Consequently, contractors must fund their work for up to 30 days after an approved draw request. Draw requests will only be accepted at the 33%, 66%, and 100% completion periods of a project. Although the contractor must be in the QCP in order to work with RREM homeowners, the builder will not have a contract with the State of New Jersey, the DCA, or the Program Managers. They will, however, sign a Construction Agreement, “similar to other single-family construction agreements.”
With Many Hurricane Sandy Victims Still Unable to Secure Temporary Housing, Will New Jersey’s Age-Restricted Communities Offer Up Vacant Units?
January 15, 2013 | No Comments
Posted by Steven Gouin
In New Jersey, there is a significant shortage of temporary housing for Hurricane Sandy victims. Currently, about 2,790 households are living in hotel and motel rooms, rented for them by the Federal Emergency Management Agency (“FEMA”), through its “temporary shelter assistance” program (“TSAP”). When the TSAP expires at the end of January, about 1,100 of these households will not be able to secure temporary housing.
Temporary housing options for Sandy victims are limited. According to FEMA, about 70 long-term rental units will become available at Fort Monmouth by the end of the month, to supplement the 45 units that have already been refurbished and rented there. Still, with the TSAP’s January 26th deadline looming, many displaced families are running out of time.
A recent pronouncement by the U.S. Department of Housing and Urban Development (“HUD”) may be of assistance to some of these displaced families – if New Jersey’s over-55 communities take advantage. On November 9, 2012, HUD announced that age-restricted communities may offer vacant units to Hurricane Sandy evacuees even if they do not meet the communities’ strict age requirements. This was the agency’s official interpretation of the U.S. Fair Housing Act (“FHA”), which provides age-restricted communities an exemption from the prohibition against familial status discrimination. On November 27, 2012, the New Jersey Department of Community Affairs (“DCA”) followed suit, announcing in a press release that it would follow HUD’s guidance.
Under this guidance, age-restricted communities may make vacant units available to Sandy evacuees, even those under age 55, without fear of losing their FHA-imposed discrimination exemption. Anyone who has lived in a county that has been declared a federal “disaster area” and who has been designated for individual assistance from FEMA is considered an “evacuee” eligible for this program. The program applies to all age-restricted communities across the country, and applies equally to rental and for-sale units.
But will New Jersey’s age-restricted communities take advantage? Before they do, there are two important legal questions that deserve some consideration and remain unanswered: (1) Will municipalities agree to waive zoning restrictions that define age-restricted communities more restrictively than the FHA, or will a variance be required each time a vacant unit is offered to an “underage” Hurricane Sandy evacuee? (2) Will age-restricted communities be required to amend their governing documents to reflect HUD’s guidance?
With regard to the first question, under the FHA, all age-restricted communities must satisfy the “80/20 rule.” That is, 80% of the units in the community must be occupied solely by persons age 55 and over. In some municipalities, over-55 communities are located in special zoning districts, where the community itself is defined according to even stricter limits. For instance, a municipality could define an age-restricted community as one in which 100% of the units are owned by persons over 55.
In such a case, a variance would technically be required if a vacant unit was made available to an “underage” evacuee. This would necessitate an application to and an approval from the appropriate local land use board.
With regard to the second question, in some cases, a community’s governing documents may define the community as “age-restricted” according to the FHA, with little flexibility. There, it is quite possible that the governing documents (i.e., the community’s master deed and bylaws) must be amended before a vacant unit may be offered to an “underage” evacuee.
Certainly, the program is designed to aid the victims of Hurricane Sandy, not to impose additional legal responsibility on age-restricted communities. Still, before taking advantage of this opportunity, eligible communities will have to weigh the potential legal ramifications of its actions. The communities would be well-advised to (a) contact local officials to inquire about the need for variance relief and (b) review their governing documents to determine whether an amendment is necessary.
No community is required to provide housing to evacuees younger than 55 – that decision is completely voluntary. But if a community decides to participate, it must make sure not to discriminate on the basis of race, color, religion, sex, national origin, or disability. In fact, any community taking advantage of the program should have a consistent, nondiscriminatory admittance process in place.
Of the program, DCA Commissioner Richard E. Constable, III stated, “We at the Department of Community Affairs are in full support of federal efforts to address the immediate housing needs of those impacted by Hurricane Sandy.” He went on to say, “As housing for storm displaced residents continues to be a concern, we encourage managers and residents of 55 and older communities to welcome people of all ages displaced by this storm.”
Hopefully, the program provides evacuees some much-needed relief, while, at the same time, providing age-restricted communities the opportunity to fill vacant units. Unfortunately, with some very serious legal issues still unresolved, it is unclear whether New Jersey’s age-restricted communities will take advantage of this program. While we certainly need to solve the problem of displaced Sandy victims, it is unclear whether this program is a viable solution.
July 7, 2010 | 5 Comments
Posted by Marc Policastro
What is the impetus behind many Supreme Court decisions? Common sense, equity and a practical approach. On June 22, 2010, the New Jersey Supreme Court rendered a unanimous decision in the Klumpp v. Borough of Avalon case. In Klumpp,the plaintiffs’ home was destroyed as a result of a devastating nor’easter occurring in 1962. Following the storm, the Borough took control of the property to construct protective sand dunes to secure the area. Significantly, the Borough’s taking was without any concomitant compensation to the landowner. Over time, the Borough continued to list the property as privately held on the public land records, and plaintiffs paid real estate taxes on the parcel over a number of years. In turn, the Borough constructed the dunes and then proceeded to adopt laws which (1) restricted access to the property and (2) prohibited residential structures on the seized property. The Court recognized that where a town physically takes property without first bringing a formal condemnation proceeding, property owners are permitted to initiate an inverse condemnation legal action, and to petition the court for just compensation for the taking. Although acknowledging the applicable six-year statute of limitations which applies to inverse condemnation proceedings, the Court determined that the Borough of Avalon had a legal obligation to notify the property owner of the physical taking. Consequently, the Court ruled that in light of the lack of notice to the land owner, the Borough must pay plaintiffs compensation as of 1965, the date the dunes were completed. The Court emphasized that, although the property owners should have had constructive notice of the taking, e.g., from the physical limitations and fencing placed on the property, the owners were required to receive actual notice of the taking. Writing for the Court, Justice LaVecchia pointed to the unjust result in permitting the Borough to both restrict the use of the land and also refuse to pay compensation for the taking. This was an easy one.
June 1, 2010 | 17 Comments
Posted by Marc Policastro
New Jersey’s Fair Housing Act is outdated, unpredictable and ineffective. Not a great combination. In the eyes of most, it has simply failed to achieve its stated purpose. On May 13, 2010, Governor Christie announced a basic road map to revamping the entire affordable housing system in New Jersey. The Governor’s plan would abolish the Council on Affordable Housing (COAH) and attempt to shift more planning control to the local level, and away from the State. Under the new proposal, developments having more than 10 units would be required to set-aside 10 percent of the units as “affordable units”. Developers pursuing projects having between 2 and 10 units would be subject to a required payment into an affordable housing trust. The new framework would repeal the current 2.5% commercial development fee and would also give “special needs” housing priority. Redevelopment of existing housing supplies is to be encouraged and local assessments, as opposed to State-driven housing analyses, should prevail. The real question is simple: Will the new plan contain enough incentives for developers and municipalities to collaborate in a meaningful way and avoid the delay, uncertainty, litigation and inefficiencies which are synonymous with the old COAH system? Governor Christie has painted a broad brushed picture. As always, the proof is in the fine print.
June 1, 2010 | 6 Comments
Posted by Michael Bruno
On May 19, 2010, the New Jersey Supreme Court in Iron Mountain Information Management, Inc. v. The City of Newark refused to expand to tenants, even those tenants with heightened property rights such as a right of first refusal, the right to notice that the Local Redevelopment and Housing Law affords to certain property owners. The Supreme Court held that a long term tenancy, with a limited right of first refusal, does not have a protected interest in the property that is equivalent to the building owner’s interest in the property that is subject to a potential blight designation. The Court confirmed that in the blight designation context, the Local Redevelopment and Housing Law limits the right to notice to “owners of record and those whose names are listed on the tax assessor’s records.” As noted in my earlier blogs this month, May has been a boom month for redevelopment as we are finally starting to see a more balanced approach by the Court’s in limiting the power of objectors to redevelopment designations. Municipalities must remain diligent and thorough in designating an area in need of redevelopment. However, the Suburban, Powerhouse and Iron Mountain cases, all decided in May of 2010, are all good news for the redevelopment community.
May 28, 2010 | 23 Comments
Posted by Michael Bruno
In what continues to be a very good month for redevelopment, on May 17, 2010 the Appellate Division decided Powerhouse Arts District Neighborhood Association Redevelopment, et al v. City Council of the City of Jersey City and rejected the arguments of the plaintiff neighborhood association group challenging the City’s amendments to the redevelopment plan for a downtown portion of Jersey City. The Court also rejected the association’s argument that the area was not blighted and was improperly included within the redevelopment area years earlier. The Court found that under the redevelopment plan provisions of the Local Redevelopment and Housing Law the “municipality’s adoption of a zoning ordinance or, as here, a redevelopment plan, is a discretionary decision of broader application” than that of a redevelopment designation. The Court found that because the municipalities action was discretionary such decisions should be reviewed under the “arbitrary or capricious” standard rather than the more strict “substantial evidence” standard. The Supreme Court under the Gallenthin case previously held that proper standard of review for redevelopment designations under the Local Redevelopment and Housing Law is the more strict standard of whether the municipal action is based upon “substantial evidence” in the record. Although redevelopment plan amendment and redevelopment designation powers are found in different sections of the The Local Redevelopment and Housing Law, given the series of decisions since the Gallenthin case was decided, there was significant concern that the Court would find that the more restrictive “substantial evidence” standard of review applied to redevelopment plan amendments. The Powerhouse case is a critical victory for redevelopers and serves to confirm that municipalities have broad discretion to amend redevelopment plans.
May 25, 2010 | 2 Comments
Posted by Michael Bruno
On May 6, 2010 the Appellate Division in Suburban Jewelers, Inc et al v. City of South Plainfield upheld the City Of Plainfield’s redevelopment designation of a portion of its central business district. Of the over thirty cases that have reviewed, discussed or cited the Gallenthin case since Gallenthin was decided in the summer of 2007, this is the first Appellate Division case that upholds a municipalities redevelopment designation against a challenge and provides a much anticipated blueprint going forward. The Court outlines the City’s determination study and provides good commentary on the study required in connection with whether an area qualifies in need of redevelopment under the law. The Court pays particular note to the specific conditions cited in the City Planner’s needs report for each property within the area and that those conditions were the result of adequate investigation. Post Gallenthin, this case is a must read for any municipality considering a redevelopment designation or for any redeveloper undertaking due diligence in connection with an existing redevelopment project.
May 7, 2010 | 3 Comments
Posted by Marc Policastro
On April 22, 2010 Governor Christie signed into law S-921, which is intended to smooth the way for zoning approvals involving solar panels. The new law specifically exempts solar panels in the calculation of “impervious coverage” as defined under the Municipal Land Use Law. Similarly, solar panels are not to be considered in determining agricultural impervious cover and shall not be determined to be an impervious “surface” in a Highlands district. The law distinguishes between the “base or foundation” of the panel and the elevated portion of the panel itself. The latter is exempt from impervious calculations. Impervious cover regulations are intended to regulate the use of surface materials which, theoretically, affect water absorption rates, aesthetics and ground water runoff flow. Solar panels are devices that capture and convert solar radiation to produce power. New Jersey is positioning itself to be a national leader in solar installation and solar productivity. To review a complete copy of S-921 click here http://www.njleg.state.nj.us/2010/Bills/AL10/4_.PDFkeep looking »