More than ever, the development industry needs permit extension legislation to ensure a robust real estate market once the current public health emergency is resolved. Legislation tracking the Permit Extension Act (PEA) of 2008 (PEA) should be implemented. While the severity of the extended economic downturn more than ten years ago made it difficult, if not impossible, for many commercial and residential developers to continue building, the severity of the situation today is more extreme.
Under the terms of the Governor’s Executive Order No. 122, the ability of developers to continue projects, even those that are fully funded and under construction, is not dependent on the circumstances of any single developer, but rather whether the project falls within the relatively narrow scope of projects that may be designated as an “essential construction project.” Some of the projects that qualify to continue under EO 122 may not be able to proceed due to an inability to comply fully with the health/safety requirements enumerated in paragraphs 3 and 4 of the order.
Developers, like all New Jersey citizens, did not do or fail to do anything to end up in the current situation. This shutdown is not a consequence of any individual or collective action or inaction, and is not a circumstance where it is appropriate to shift blame or burdens. Only legislation extending permits and approvals, coincident with the scope of the PEA, will provide the necessary protection to allow development to resume promptly once the threat posed by COVID-19 is resolved.
If developers must seek extensions of expired approvals or permits when they could otherwise be building, firing up the economic engine that is the real estate industry will be delayed, and construction workers and others dependent upon the industry will not get back to work quickly.
There is no reasonable alternative to PEA legislation. The relevant provision of the Municipal Land Use Law, N.J.S.A. 40:55D-21, tolls only local approvals where a developer “ready, willing and able to proceed with” development is “barred or prevented, directly or indirectly, from proceeding with the development otherwise permitted under such approval” by “a directive or order issued by and State agency, political subdivision or court of competent jurisdiction to protect the public health or welfare. This provision must be applied on a case-by-case basis, and does nothing to extend or protect the myriad other permits or approvals that may be required for a single project, including those that require that specified work either commence or be completed within a fixed period of time. Unless a development comprises an “essential construction project,” such work cannot be undertaken. Even if extensions of such permits are available, developers should not be forced to waste precious time and resources chasing down extensions when they could be re-starting construction when permitted to do so.