Areas under the Highlands Act may get compensation

NEWTON — The Skylands Group of the Sierra Club heard — and saw — a presentation on the Transfer of Development Rights (TDR) program, which was instituted as part of the Highlands Water Protection and Planning Act.

The Transfer of Development Rights program is designed to enable the property owners to recoup some of the value that they have lost because of the restriction put into place when Governor James McGreevey signed the Highland Act into law in 2004.

It allows a community to use market forces to encourage the transfer of development potential from areas that the community wants to preserve (called sending zones) to areas that are more appropriate to accommodate increased growth (called receiving zones).

Landowners in the sending zones receive compensation for restricting development on their property. As a market-based system, payment for this lost development potential comes from purchasers who buy credits representing the lost development potential in the sending zones.

The credits then entitle the purchaser to build in a receiving zone at a density greater than that permitted in the underlying zoning.

The TDR program is being considered by property owners in Byram Township. Township Councilman Scott Olson commented, “Here in Byram, we have some of the most pristine and environmentally sensitive areas within the Highlands, and TDR provides one of the best tools available for land preservation, by purchasing development rights from a landowner and shifting that development to an appropriate location...The benefit to the property owner is that the actual land remains theirs; it does not become public.”

Speaking and illustrating her remarks with PowerPoint slides was Margaret Nordstrom, the Deputy Executive Director of the New Jersey Highlands Water Protection and Planning Council (Highlands Council), which was also established by the Highlands Act and functions within the New Jersey Department of Environmental Protection.

Nordstrom was appointed to the Council in June 2012; prior to that she served for 12 years on the Morris County Board of Chosen Freeholders.

The New Jersey Highlands is defined as a 1,343 square mile area in the northwest part of the state.

The region stretches from Phillipsburg in the southwest to Ringwood in the northeast, and lies within portions of seven counties (Hunterdon, Somerset, Sussex, Warren, Morris, Passaic, and Bergen) and includes 88 municipalities.

This region has about 15 percent of the state’s population; however, it provides drinking water to half of the state.

The Highlands Act was developed to protect the region’s water resources, both from pollution and from depletion.

Under the Highlands Act, economic development is restricted within significant portions of the Highlands region in the interests of environmental protection. Such restrictions inevitably reduce the value of the real estate so affected. It is the role of the Highlands Council to act as matchmaker, that is, to bring together property owners in the sending zones and developers in the receiving zones.

The Council also provides planning expertise, grant funding, and fiscal analysis to municipalities seeking designation as receiving zones. The program has been under way for only a few months.

Already several municipalities, mostly in Passaic County, have requested designation as receiving zones. These are looking to take advantage of opportunities to revitalize their aging commercial districts.

Receiving zones may be anywhere within the state of New Jersey; they do not need to be in the Highlands region.

However, many municipalities within the seven counties of the Highlands region stand to benefit from development opportunities made available by the Transfer of Development Rights program.