New Jersey Eminent Domain Reform: S-1415

On October 7th, 2010, the New Jersey Senate’s Community and Urban Affairs Committee approved S-1451, which would amend the following three statutes:

1. “Local Redevelopment and Housing Law”, P.L.1992, c.79 (C.40A:12A-1 et al.)
2. “Eminent Domain Act of 1971,” P.L.1971, c.361 (C.20:3-1 et seq.)
3. “Relocation Assistance Act,” P.L.1971, c. 362 (C.20:4-1 et seq.).

Several key changes included in this bill are as follows:

  • Municipalities intending to create redevelopment areas must designate the area as either “non condemnation redevelopment area” or “condemnation redevelopment area”.  Non condemnation redevelopment areas could be designated under procedures similar to those contained in current law.  A condemnation redevelopment area could be designated by following new procedures that provide greater notice and other transparency requirements than those contained under current law.
  • Relocation assistance would be increased and rental assistance enhanced.
  • Properties acquired for redevelopment must be valued at no less than the replacement value of the property.
  • No more than 20% of the land mass designated for private ownership of a redevelopment area may be comprised of land that is not blighted.  Current law does not cap the amount of non-blighted property a municipality may include in a redevelopment area.
  • Provisions are included protecting certain farm land from condemnation for redevelopment purposes.
  • Section 13 (amending N.J.S.A. 40A:12A-5) revises the criteria used to determine if an area is blighted.  It adopts criteria that are consistent with the meaning of the term “blight” under the State Constitution, according to the New Jersey Supreme Court decision in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007).  The bill provides that a municipal governing body determination that an area is in need of redevelopment must conclude that:
  • the deterioration or stagnation of the delineated area negatively affects surrounding properties because of a statutory blight criterion;
  • the condition or conditions of blight are the prevailing characteristics of the delineated area;
  • Each non-blighted parcel included within the delineated area is necessary for the effective redevelopment of the area and is an integral part of that area; and
  • there is objective evidence of a statutory blight criterion within the delineated area.
    Several of the blight criteria contained in this section are changed.  The amended bill deletes subsection h., the smart growth basis for blight, from the section.  The amended bill adds a new basis for a blight determination, being contaminated property that has remained vacant or substantially underutilized for at least two years.

While the first point is significant because it establishes procedural requirements that municipalities must follow in order to establish redevelopment areas, these type of changes oftentimes fail to provide additional protection for property owners when it comes to the right to take through eminent domain.

As a property owner who is sensitive toward property ownership rights, I’m fairly certain I would feel little comfort with the fact that section 21 “bestows upon every resident and small business operator displaced because of redevelopment, a right of first refusal to purchase or lease property in the redevelopment area post-development”.  While this is likely an attempt at giving owners a chance at maintaining their business or home in the same area, I’m quite certain this would do little to heal my wounds after losing my property by condemnation.

The most significant aspect of this bill appears to be the 20% limitation of non-blighted property within a redevelopment area.  However, New Jersey should follow the example of other states that require property be evaluated on a parcel by parcel basis within a redevelopment area, which effectively prevents condemnation if the property is not blighted.

Although many sections of this bill do not limit the government’s right to take property under eminent domain, they do provide additional protection to property owners undergoing eminent domain in redevelopment areas.

Here are several links for further reading on the bill:

S-1415 first reprint

S-1415 PDF version

New Jersey State Legislature Bills

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