The latest proposed rule as part of DEP’s ongoing Protecting Against Climate Threats (PACT) Resilient Environments and Landscapes (REAL) program is currently expected to be adopted early this summer. The proposed rules are vast in scope and warrant attention by all owners, landlords, property managers, lenders, and insurers of properties near any tidal water body as well as anyone planning to develop, expand, or redevelop those sites.

The proposed rule is controversial in both its breadth and its severity impacting existing and proposed development near all tidal water bodies. Despite the broad impacts of the proposed rules, DEP has chosen to move forward without any meaningful dialogue or input from any of the affected stakeholders. Given the severity of the known problems the rule will create, county and local governments have requested that the Legislature and the Governor’s Office intervene to stop the proposed rule. However, as of this publication, DEP is moving ahead to adopt the proposed rules this summer.

New Elevation Requirements in Tidal Areas

The most publicized aspect of the proposed rules involves new severe restrictions on development along all of New Jersey’s tidal water bodies covering a large percentage of New Jersey’s population centers, including the Hudson River waterfront, the Atlantic coast, and along the Delaware River up through Trenton. Those restrictions require that sites be elevated five feet above the mean high tide elevation and an additional restriction to address a new “Inundation Risk Zone” of elevations that could be subject to flooding in extreme events. As a result, development will be severely restricted, in many instances relatively far from any tidal water. The new elevation requirements are based on a specific Rutgers University study predicting only a 17% chance of sea elevation rise of five feet by 2100. That vastly conservative basis for DEP’s proposed elevation requirements is expected to be the basis of a challenge to the rules. 

Limits on Rebuilding and Improvements

The proposed rule requires compliance with the new elevation requirements if there is “substantial improvement” to a structure. “Substantial improvement” is tied to “50% of the structure’s market value.” Thus, damage to a structure requiring a “substantial improvement” would preclude rebuilding at current elevations. It is easy to imagine circumstances under which the new elevation requirements could not be met. Hence, assumptions in lending documents, insurance and lease agreements relating to the ability to continue operations can be upended. 

Further, the proposed language leaves open whether the proposed new elevation requirements would be triggered by improvements unrelated to either damage from flooding or from expansion of the structure. On their face, the proposed rules would mandate that the structure be elevated for any “substantial improvement.” 

Other Changes Proposed

While the rule was proposed with a focus on addressing sea level rise, the proposal also includes a laundry list of changes unrelated to sea level rise. Changes are scheduled to over a dozen regulatory programs, including changes far afield of impacts from sea level changes, ranging from freshwater wetlands to forestry programs to the regulation of large chemical facilities.