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In Re Adoption of Highlands Regional Master Plan

421 N.J. Super. 614, 25 A.3d 1172 (App. Div. 2011)

HIGHLANDS ACT — Although the Highlands Act sets a goal of making 4% of lands in the Highlands Region suitable for receiving zones, that is a goal and not a minimum mandate.

Landowners sued to challenge the validity of a regional master plan (RMP) adopted by the New Jersey Highlands Water Protection and Planning Council. The landowners argued that the RMP was invalid because the Council’s transfer of development rights (TDR) program, a required component of the RMP under N.J.S.A. 13:20-8(a) and 13:20-11(a)(6), did not conform with New Jersey’s Highlands Water Protection and Planning Act.

A RMP acts as 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 land in the municipality’s planning area, but may elect to do so voluntarily under N.J.S.A. 13:20-14(f) and 13:20-15(a). Thus, a property is not subject to any constraints on development merely as a result of its designation in a RMP unless the municipality separately imposes restrictions through its zoning ordinance. Therefore, any challenge must first be raised against the validity of the municipality’s zoning ordinance.

The TDR programs allow the transfer of development rights from environmentally sensitive areas to more readily-developable areas. 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).” In return for restricting development on their properties, landowners in sending zones can obtain compensation for lost development potential from purchasers who buy TDR credits in the form of TDR credits. Purchasers are then entitled to build in a receiving zone at a greater density than permitted by the underlying zoning there.

The Appellate Division disagreed with the landowners, holding that the Highlands Act authorized the Council to adopt a TDR program for the Highlands Region even if the program did not strictly conform with the provisions of the State Transfer of Development Rights Act. The TDR program, adopted by the Council as part of the RMP for the Highlands Region, conformed with the provisions of the Highlands Act governing adoption of a TDR program as set out in N.J.S.A. 13:20-13. That the Council identified only 2.79% of the land in the Highlands Region as suitable for receiving zones, and this was less than the 4% goal established under N.J.S.A. 13:20-13(c), did not invalidate the RPM, as the 4% figure was only a goal, and the Council had been delegated by the authority to determine the amount of land in the planning area that would not compromise the integrity of the ecosystem.

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