Sometimes a landowner receives a notice in the mail saying the town is studying whether their property is part of an "area in need of redevelopment." The phrase can sound alarming, but the designation can cut both ways for owners of vacant land. Understanding the process is the first step.
The Legal Framework
New Jersey's Local Redevelopment and Housing Law (N.J.S.A. 40A:12A-1 et seq.) lets a municipality's governing body designate an area in need of redevelopment, with the planning board investigating and making a recommendation. To qualify, an area must meet at least one of the statutory criteria in N.J.S.A. 40A:12A-5. Examples include dilapidated or substandard buildings and certain land that has remained vacant or unimproved for a long time.
How the Process Works
The governing body adopts a resolution authorizing the planning board to conduct a preliminary investigation. The planning board prepares a map and study, then holds a public hearing with published notice and mailed notice to owners in the study area. After the hearing, the board recommends whether to designate all or part of the area, and the governing body decides. Owners are notified of the determination.
Condemnation vs. Non-Condemnation
The initial resolution must state whether the area is proposed as a condemnation or non-condemnation redevelopment area. In a condemnation area, the municipality may use eminent domain to carry out the plan, and owners receive notice of a 45-day period to challenge the designation. A non-condemnation area does not carry eminent domain authority.
The Redevelopment Plan
After designation, the governing body adopts a redevelopment plan by ordinance. Once adopted, the plan functions as the zoning for the area. It may allow different uses, densities or building standards than the underlying zone. Municipalities may also select a designated redeveloper and use tools such as long-term tax abatements or payment-in-lieu-of-taxes (PILOT) agreements.
What It Means for Buyers and Sellers
A designation can open the door to uses the old zoning did not allow, which may interest developers. It can also mean that a designated redeveloper, rather than any buyer, is the practical path to building. Sellers should disclose any designation or pending study, and buyers should read the redevelopment plan before making an offer. Owners who receive a notice should talk with a land use attorney about their rights and the deadlines involved.
This article is general educational information, not legal, tax, or engineering advice. Rules vary by municipality and change over time, so confirm details with the appropriate local officials and your own professionals.